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Home My WebLink About169-09 RESOLUTIONRESOLUTION NO. 169-09 A RESOLUTION APPROVING RENEWAL OF BLUE CROSS/BLUE SHIELD HEALTH INSURANCE; DELTA DENTAL INSURANCE; RELIANCE STANDARD CITY -PAID LIFE INSURANCE AND DISABILITY PLANS; COBRA & SECTION 125 CAFETERIA PLAN ADMINISTRATION, AND FLEXIBLE SPENDING ACCOUNTS WITH DATAPATH; HSA ACCOUNT ADMINISTRATION WITH DELTA TRUST & BANKING CORP.; AND ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGE WITH ACE - USA FOR PLAN YEAR 2010; AND ADOPTING STAFF RECOMMENDATIONS FOR APPORTIONMENT OF COSTS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves renewing Blue Cross/Blue Shield health insurance; Delta Dental insurance; Reliance Standard city -paid life insurance and disability plans; COBRA & Section 125 Cafeteria Plan administration and Flexible Spending Accounts with Datapath; HSA account administration with Delta Trust & Banking Corp.; and Accidental Death And Dismemberment coverage with ACE - USA for plan year 2010. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby approves staffs recommendations that in 2010 the City pay for half of the aggregate dollar increase in City health insurance costs (apportioned per the Staff agenda memo), pay for all of the increase in costs for the City paid life insurance, pay the same as in 2009 for the City paid Iong term disability and the employee Health Savings Accounts, approve a change in the employee paid life insurance carrier, approve the addition of an employee paid long term care insurance product to the City's benefits offerings, and approve a status quo continuation of all other employee benefits offerings. PASSED and APPROVED this dth day of August, 2009. APPROVED: By: TO LD JO ' 1. N, Mayor ATTEST: 1C1)44,f(ILSOlr ' SMITH, City erk/TreasKn�',,,,�� °emooa s ° eWn� FAY ETT EV1LLE ..;;-90h�RkAN�pJ?: ��11611ii1111j1 City of Fayetteville Staff Review Form City Council Agenda Items and Contracts, Leases or Agreements City Council Meeting Date Agenda Items Only Missy Lefler, HR Dept. Manager Human Resources Submitted By Division Action Required: Human Resources Department Staff reqeust approval to renew City paid employee benefits for 2010. All are the same except for the City's portion of the health insurance and the City Paid Life and Long Term Disability. Due to health insurance costs increasing, Staff also requests council approval on a reallocation of employer/employee portions of the health insurance as a 50/50 split between the City and the employees. Please refer to the attached memo. Figures available by Agenda Session Cost of this request Account Number Project Number Figures available by Agenda Session Category / Project Budget $ Personnel Services Program Category / Project Name Citywide Funds Used to Date Program / Project Category Name Citywide Remaining Balance Fund Name Budgeted Item X Budget Adjustment Attached artment irector City Attorney Finance and Internal Services Director ie ayo 1 -Da 4_1e Dat -.oS Date Previous Ordinance or Resolution # Original Contract Date: Original Contract Number: Received in City Clerk's Office Received in Mayor's Office Comments: Revised January 15, 2009 ev A: R 1: A t'9 5 A CITY COUNCIL AGENDA MEMO For August 4, 2009 Council Meeting TO: Mayor Lioneld Jordan and the City Council THRU: Don Marr, Chief of Staff FROM: Missy Leflar, Human Resource Department Manager Krista Laningham, Benefits Administrator DATE: July 17, 2009 SUBJECT: Approval of City paid employee benefits for 2010 RECOMMENDATION: Staff recommends approval of the proposed City paid employee benefits for 2010. Specifically, Council approval is requested for renewal of the City's Blue Cross health insurance plan, Delta Dental insurance plan, and Reliance Standard city paid life insurance, long term disability, and short term disability plan services, DataPath Flexible Spending Account/Summary Plan Description/COBRA Administration plan services. Of these proposed City paid renewals the Blue Cross health insurance, Reliance Standard City paid life insurance, and Reliance City paid long term disability insurance will be experiencing rate increases as more fully explained below. Due to the increase of the Blue Cross health insurance rates, Council approval is requested for a concurrent change in the employer/employee contributions to the health insurance and the same employer contributions to the health savings accounts as in 2009. Please note: The benefits that are paid by employees and completely voluntary on their part are discussed below for informational purposes only, as these do not require Council approval. Changes in coverage: There will be one change in offered coverage for the 2010 employee benefits package. The City will likely add employee paid long term care insurance as a voluntary insurance product. BACKGROUND: The entire 2010 employee benefits package will consist of: • Blue Cross Blue Shield health insurance (both traditional and high deductible). • Delta Dental dental insurance. • Starmount/Always Care vision insurance. • Colonial supplemental medical insurance for cancer, critical illness, and accidents. • Reliance insurance for City paid life and City paid long term disability. • A new employee paid life insurance company (To Be Determined: Brokers are still taking bids) • Reliance insurance for Short Term Disability. • ACE -USA Accidental Death and Dismemberment. • A likely new offering of employee paid long term care insurance (To Be Determined: Brokers are still 1 in discussions with long term care insurance companies). • Flexible Spending Accounts for dependent care reimbursement and health care reimbursement. • Delta Trust & Banking Corp. Health Savings Accounts. • Retirement Plans. • In addition, Sam's Club is continuing to offer City employees a discount on its memberships. • The School District is currently partnering with the City in offering City employees (who are eligible for regular benefits) memberships to the Fayetteville Public Schools Fitness Center at a cost of $15 per month to the employee for an individual membership and $25 per month for a family membership. This is currently handled by payroll deduction for the employee's convenience. Of the above, the City would fmancially contribute to: Health insurance, life insurance, long term disability insurance, accidental death & dismemberment, health savings accounts and the retirement plan. In addition, the City would continue to utilize the services of Datapath to provide its expertise at administering the legally required Section 125 Summary Plan Description and COBRA Administration services, as well as its Flexible Spending Accounts. DISCUSSION: Health Insurance: The City's Benefits Brokers' took competitive bids from six different health insurance companies. Three of the insurance companies (Mercy Health Plans, Aetna, and Principal) declined to bid on the City's health insurance. The other three health insurance companies (Blue Cross, Qual Choice of Arkansas, United Healthcare) issued bids for the City's health insurance. As you can see by the attached Stephens Insurance bid chart, the Blue Cross premium came in with the lowest rate of the three health insurance companies. The 2010 Blue Cross rate includes an increase of 7.5% when compared to the 2009 premiums. Although the Blue Cross rates will go up 7.5% across the board, changing to Qual Choice would have cost the City 27.23% more for the Traditional Plan and 6.55% more for the High Deductible Plan. Changing to United Healthcare would have cost the City 21.39% more for the Traditional Plan and 45.07% more for the High Deductible Plan. The differences between the 2009 rates and 2010 rates are itemized in the attached table. The total monthly premium went up 7.5% for all plans offered. Approximately 2% of the increase is attributed to a new federal law that was passed called the Mental Health Parity Act. This Act will require health insurance companies to pay more for mental health related medical costs. Approximately 5% of the increase is attributed to Blue Cross paying approximately half a million dollars more for employee health care bills than it took in from employee health insurance premiums. Staff recommends that the City follow its past tradition of splitting the cost of health insurance increases 50/50 with the employees. The City's contribution to the health insurance premium will increase to $226.16 for Individual Traditional coverage and $522.30 for Family Traditional coverage. The employee portion to the health insurance premium will increase to $18.43 for Individual Traditional coverage and $93.18 for Family Traditional coverage. Staff recommends that the City's contribution to the High Deductible Health plan and employee Health Savings Account remain the same, while making a change to the employee premium. With regards to the employee premium for the High Deductible Health plan, historically the City has paid the full amount of the premium. Staff recommends that the City increase the employee portion of the premium to $10.07 for Individual coverage and $26.57 for Family coverage (the City's portion of the premium would remain the same). Health savings accounts: Staff recommends that the City's contributions to employee health savings accounts 2 remain the same as in 2010. This is an integral part of the overall High Deductible health insurance plan. Dental insurance: The City's Benefits Brokers' took competitive bids from three different dental insurance companies. They received bids from Delta Dental, Met Life and Guardian. The 2010 Delta Dental rate includes an increase of 4% when compared to the 2009 premiums. Changing to Met Life would have cost the City's employees 8.6% more for their dental insurance. The bid from Guardian also came in at an increase of 4%, the same as Delta Dental. There seems no logical reason to change to the Guardian for no advantage especially when the disruption of people's dentists not being in a new Guardian network is considered Life insurance: The City's Benefits Brokers are working on getting the quotes from Reliance Standard Life Insurance company for increases in the costs of City paid life insurance and City paid long term disability. Those quotes are unfortunately not available at the time of submitting this agenda item to the Clerk. However, they are fully expected to be available by the time of the agenda session and will be handed out to Council as a supplemental handout. Annual Enrollment: Pending Council approval, the proposed enrollment schedule is for employees to be sent their benefits packets in September, have the educational meetings in September, and — for those wishing to make benefits changes - have one on one meetings with the HR Benefits Administrator throughout October. BUDGET IMPACT: These planned items will be or are being budgeted for in the City's 2010 budget. Staff is available to answer any questions you may have. 3 RESOLUTION NO. A RESOLUTION APPROVING RENEWAL OF BLUE CROSS/BLUE SHIELD HEALTH INSURANCE, DELTA DENTAL INSURANCE, RELIANCE STANDARD CITY PAID LIFE INSURANCE AND RELIANCE STANDARD CITY PAID LONG TERM DISABILITY INSURANCE; ADOPTING STAFF RECOMMENDATIONS FOR APPORTIONMENT OF COSTS FOR THE RENEWED PRODUCTS; APPROVING THE SELECTION OF A NEW EMPLOYEE PAID LIFE INSURANCE CARRIER; APPROVING ADDING AN EMPLOYEE PAID LONG TERM CARE PRODUCT TO EMPLOYEE BENEFITS OFFERINGS; AND APPROVING THE STATUS QUO CONTINUATION OF ALL OTHER BENEFITS OFFERINGS AND BENEFITS ADMINISTRATIVE SERVICES. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves renewing Blue Cross/Blue Shield health insurance, Delta Dental insurance, and Reliance Standard City paid life insurance and Reliance Standard long term disability insurance. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby approves staffs recommendations that in 2010 the City pay for half of the aggregate dollar increase in City health insurance costs (apportioned per the Staff agenda memo), pay for all of the increase in costs for the Reliance Standard City paid life insurance, and pay the same as in 2009 for the Reliance Standard City paid long term disability and the employee Health Savings Accounts. Section 3. That the City Council of the City of Fayetteville, Arkansas hereby approves a change in the employee paid life insurance carrier. Section 4. That the City Council of the City of Fayetteville, Arkansas hereby approves the addition of an employee paid long term care insurance product to the City's benefits offerings. Section 5. That the City Council of the City of Fayetteville, Arkansas hereby approves a status quo continuation of all other employee benefits offerings. Section 6. That the City Council of the City of Fayetteville, Arkansas hereby approves status quo continuation of the benefits administrative services of Delta Trust & Banking Corp. for Health Savings Account administration, and Datapath for the City's COBRA administration, Section 125 Cafeteria Plan administration, and Flexible Spending Account administration. PASSED AND APPROVED this 4th day of August, 2009. APPROVED: ATTEST: By: By: LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer 2009 Monthly Health Insurance Rates .,.,max. a.a :;ae?': re dG". . ....°.°.°.°.°.°.a.,..&.,.,.-.... 3.i i .. ...e .. °..°.°.°.°.... ......... ,9, . <.e.<[. a .... °.°.°"«°q.-R.d.,.a.°.d.° a E[ '°RPtB.d,°:ea°8°:::;.,.,,. mma,eeee�P., ................... °,.... °, 6.,,°.°<a.°...E.E .eE.<F E EEt ttr <tt1 >$. . .. 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E ,_e3a;.B•°a¢Ef:E. 3 itIit Family $6,357.48 $2,307,765.24 $6,627.60 Tip I '.4 Individual $2,611.56 $430,907.40 $2,713.92 Family $600.45 $529.79 N/A $70.66 Individual $227.53 $217.63 N/A $9.90 Family $6,131.04 $465,959.04 $6,131.04 Qda'-'•�a- Pa.. fir' °i-'8. >t G& 5bi Individual $2,460.48 $123,024.00 $2,460.48 Family $510.92 $354.26 $156.66 $0.00 Individual $205.04 $134.24 $70.80 $0.00 Proposed 2010 Monthly Health Insurance Rates 5 �� 3 .tl8° ...B ill B 9 tl:..A< eee88°BABGdRCG"GE °.°.°.°.°.°..°e d e.e 8....... B . a .:; .-» 9°.°°... , ea.66°.°.°.°.¢.°e¢DeBePBB.tlB"C"B6IAIBE *f:veE:RAl. .>.>.,...a.E.> >.> .. .a a,E?":2.Se�egEafaebmm:€:er:e!de < .,.°.°..-..:.. ...i " 3 3v°.°.° ..-. ...m �.°. 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S.C.E eE a:a , , CE; �.[ FE:..n.:.:....:.....:.....:....:..-E.:.. �S 3 itIit Family $6,357.48 $2,307,765.24 $6,627.60 Tip I '.4 Individual $2,611.56 $430,907.40 $2,713.92 Family $645.48 $552.30 N/A $93.18 Individual $244.58 $226.16 N/A $18.42 Family $6,131.04 $465,959.04 $6,131.04 i.!01800P}}MLp[[ Individual $2,460.48 $123,024.00 $2,460.48 Family $537.49 $354.26 $156.66 $26.57 Individual $215.11 $134.24 $70.80 $10.07 * Employer Portion is the insurance company's charges * The Employer HSA contribution is the amount the employer deposits into the employee's Health Savings Account (HSA) . Note: The Delta Dental insurance is presently bundled to the health insurance, meaning that in addition to the above, the employee (regardless of health plan selected) would also pay $72.22 for family coverage and $21.36 for individual coverage each month in 2010. This is an increase of 4% from the 2009 rates. Comparison of annual costs to City* Y::Bae�Beve�e I P :. „ F 4"' g484�4e§9idgB§ A § a a er' '` 1(t10 1di; f'� ».' 8 t` Agk -,,,,,,, 1 pI y 'a a 6 �yttt�y0�S 3° Y¢I0e�8IId8apdepC lr1{l:. I= dmg 88Ai�g@E Q6fi?�' P r to lif 4 4:4:::. ". + $ E , P p ° q* ar P'r Fir<�.:I �ttl 3 itIit Family $6,357.48 $2,307,765.24 $6,627.60 $2,405,818.80 Individual $2,611.56 $430,907.40 $2,713.92 $447,796.80 6eedii§ ? E? i?gg diPgeg`ia,¢m@�" i°��tl ;Rag¢edFp{i� EEdE Family $6,131.04 $465,959.04 $6,131.04 $465,959.04 Individual $2,460.48 $123,024.00 $2,460.48 $123,024.00 N/A $3,327,655.68 N/A $3,442,598.64 *Based on July, 2009 City employee health insurance enrollments and the above tables. fIaJ - a- se_47„444.,. 7--11-a q City Council Meeting August 4t' Benefits Memo Addendum: • The figures that go on the Staff Review Form for the 2010 employee benefits are: $3,849,781 (Cost of this Request) and, again, $3,849,781 (Category/Project Budget). These figures were not available at the time of submitting the Agenda Item on August 14th. • , Staff is asking Council to approve the continuation of employee benefits "as is" except for: • Adding a new employee paid product (Long Term Care) as a choice for employees; • Changing the company for employee paid life insurance to a company with better service and a less, expensive price; • An increase in cost for the City paid life insurance (approximately two cents more per $1,000 in coverage); • Splitting the dollar increase in health insurance costs with employees 50/50, approving the allocation per the chart attached to the main memo.