HomeMy WebLinkAbout62-09 RESOLUTIONRESOLUTION NO, 62-09
A RESOLUTION TO EXPRESS THE CITY COUNCIL'S
OPPOSITION TO HOUSE BILL 1891 WHICH WOULD
REMOVE THE CITY COUNCIL'S POWER TO SELECT THE
BEST HEALTH CARE INSURANCE COVERAGE FOR CITY
EMPLOYEES
WHEREAS, House Bill 1891 would remove the City Council's power to select the
health care insurer and health care coverage for city employees by requiring all Arkansas cities'
and county's health insurance employee coverage to be dictated by the State and Public School
Life and Health Insurance Board; and
WHEREAS, through competitive bidding the City of Fayetteville has been able to secure
excellent health insurance benefits through Blue Cross at a cost that would be over 2.8 million
dollars less this year than current premium rates for the existing State and Public School Health
Insurance; and
WHEREAS, the Fayetteville City Council can now select components to our health plan
such as our Wellness Benefit which provides regular physicals, flu shots and other preventative
measures at no cost to employees which eventually leads to healthier employees and reduced
medical costs; and
WHEREAS, under HB 1891 all power and control of the City's employees' health
insurance plan components and options would go to the State and Public School Life and Health
Insurance Board in Little Rock.
NOW, THEREFORE, 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 expresses
its opposition to House Bill 1891 which would remove the City Council's power to select the
best health care insurance coverage for city employees.
PASSED and APPROVED this 17'' day of March, 2009. ,� •'Y°°° p
c ;FAYETTEVILLE•
APPROVED: ATTEST:
By:
B
Y�
SON RA E. SMITH, City Clerk/Treasurer
AGENDA REQUEST
FOR: COUNCIL MEETING OF MARCH 17, 2009
FROM:
MAYOR LIONELD JORDAN
ORDINANCE OR RESOLUTION TITLE AND SUBJECT:
r2f6s
311/07
001 -0I
OP-POSTf,,00
A Resolution To Express The City Council's Opposition To House Bill 1891 Which
Would Remove The City Council's Power To Select The Best Health Care Insurance
Coverage For City Employees
APPROVED FOR AGENDA:
Kit William
City Attorney (as to form)
,I W -0q
Date
RESOLUTION NO.
A RESOLUTION TO EXPRESS THE CITY COUNCIL'S
OPPOSITION TO HOUSE BILL 1891 WHICH WOULD
REMOVE THE CITY COUNCIL'S POWER TO SELECT
THE BEST HEALTH CARE INSURANCE COVERAGE
FOR CITY EMPLOYEES
WHEREAS, House Bill 1891 would remove the City Council's power to select the
health care insurer and health care coverage for city employees by requiring all Arkansas cities'
and county's health insurance employee coverage to be dictated by the State and Public School
Life and Health Insurance Board; and
WHEREAS, through competitive bidding the City of Fayetteville has been able to secure
excellent health insurance benefits through Blue Cross at a cost that would be about a quarter of
million dollars less this year than current premium rates for the existing State and Public School
Health Insurance: and
WHEREAS, the Fayetteville City Council can now select components to our health plan
such as our Wellness Benefit which provides regular physicals, flu shots and other preventative
measures at no cost to employees which eventually leads to healthier employees and reduced
medical costs; and
WHEREAS, under HB 1891 all power and control of the City's employees' health
insurance plan components and options would go to the State and Public School Life and Health
Insurance Board in Little Rock.
NOW, THEREFORE, 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 expresses
its opposition to House Bill 1891 which would remove the City Council's power to select the
best health care insurance coverage for city employees.
PASSED and APPROVED this 17`h day of March, 2009.
APPROVED:
By:
ATTEST:
By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
•
Tye evl e
ApKAN5A5
CITY COUNCIL AGENDA MEMO
TO: Mayor Lioneld Jordan and the City Council
THRU: Don Marr, Chief of Staff
FROM: Missy Leflar, Human Resources Department Manager ./f e
DATE: March 10, 2009
City Council Meeting March 17, 2009
SUBJECT: Proposed State statute that would force the City of Fayetteville to participate in a more expensive
State mandated health insurance program.
Recommendation
Staff recommends that the City Council pass a Resolution taking a formal position against House Bill 1891, attached.
House Bill 1891 would force the City of Fayetteville to change its health insurance from the less expensive Blue
Cross insurance that is well liked by the employees. The City would be forced to change to a more expensive State
mandated health insurance program and would have lost its right to choose its health insurance from the competitive
marketplace.
Merit employee retirees would be excluded from participation except to the limited extent allowed by present federal
laws (where the retired merit employee could participate for up to 18 months as long as the employee pays the entire
expense). In sharp contrast, uniformed employee retirees would be allowed to participate for the rest of their lives,
with the City paying part of their health insurance expenses (an expense not presently borne by the City's budget).
This would clearly constitute unfair, preferential treatment of uniformed employees over merit employees. It would
also be an unfunded mandate by the State to the City.
Background
The City presently participates in a Blue Cross Blue Shield health insurance program for its employees. The City
had this program in place for many years. It switched to another carrier for one year (during 2007) and employees
were very upset. After careful research by a City medical benefits committee comprised of employees, and after
gathering feedback from employees at large, the City switched back over to Blue Cross. Many employees have
expressed thanks that the City has returned to Blue Cross as its health insurance carrier.
Discussion
It was unfortunate that in the switch between carriers, some employees experienced problems, i.e. a scheduled
surgery wouldn't be covered by the new carrier the same as the former carrier would, ongoing conditions such as
diabetes or pregnancy would be handled differently by the different carriers, and some people had to change their
physicians to someone in the new network. Many of our employees experienced inconvenient, stressful issues
associated with the changing of carriers. However, now that the City has been with Blue Cross two consecutive
years, this has settled down. It can be very hard on employees to switch carriers, particularly when they are happy
with the carrier that they have. It would not be in the employees' best interests to be forced to switch to another new
carrier, with a network that may or may not include the employees' present physicians.
Part of the reason the health insurance committee selected Blue Cross is that it has such a significant network in
Northwest Arkansas. This is not true of all insurance carriers. It is unclear to what extent the two networks offered
by the proposed insurance would overlap with -the Blue Cross network. This is just one example of why it is better for
the City to be able to take competitive bids for health insurance from the marketplace, and make a decision based on
the best interests of its employees. The State mandated program would take away all City choices with regard to
health insurance.
Regarding the coverage itself, the propose mandated health insurance does appear to have comparable coverage.
However, it requires more pre-certifications for a greater number of medical procedures (i.e., the employee must
obtain written pre-approval from the carrier before a medical procedure will be covered). The mandated health plan
coverage does have the advantages of having co-pays and. lower deductibles, as well as there being no lifetime
maximum for coverage for in-network services. However, these advantages come at a tangible increase in cost.
Budget Impact
If the City, hypothetically, were to have participated in this State mandated health plan for 2009, the added expense
is calculated to be $237,136.22. This additional cost would have to be borne by the City's taxpayer money or the
employees, or a combination of both.
Another additional, recurring cost - not previously borne by the City - would be that of the City paying a portion of
uniformed employee retirees' health insurance for the rest of their lives. Note that under the State LOPFI program,
uniformed employees may retire after 28 years of service, regardless of age, so a relatively young person could
retire after working 28 years for the City and have a portion of their health insurance paid for the rest of their life.
It is financially advantageous to the City to be able to take competitive bids for health insurance, to help keep costs
down. As long as the City employees stand alone as a group, their premiums won't go up based on other Cities' and
School Districts' use of the insurance. The City's health insurance premiums did not go up for 2009. The City has
been proactive in promoting a Wellness Program for its employees, to help keep costs down. The City should not be
forced into a larger group of insureds, over whose activities it has no influence or control.
If the proposed legislation is passed, the City would simply have to passively wait to be told each year from the State
how much more money it was going to have to pay for health insurance. The City would be called upon to pay an
unfunded mandate by contributing payments to uniformed employee retirees for life. Under the present system, the
City can take competitive bids from carriers in the marketplace and the City does not have to pay for uniformed
employee retirees' health insurance for life.
Conclusion
The City will save money on premiums, the employees will save money on premiums, and the employees will be
saved the stress and inconvenience of a change in insurance carriers if the City retains its free choice as to its health
insurance. It would be one thing if the City were given a choice to participate in the state program; however, this
would be an unfunded, mandated, expensive change that would be run by a State board with no municipal
representation on that board.
3
4
5
6
7
W
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
Stricken language would be deleted from and underlined language would be added to the law as it existed
prior to this session of the General Assembly.
State of Arkansas
87th General Assembly A Bill
Regular Session, 2009 HOUSE BILL 1891
By: Representative Nickels
For An Act To Be Entitled
AN ACT TO ESTABLISH A UNIFIED HEALTH CARE BENEFIT
PROGRAM FOR ALL PUBLICLY FUNDED EMPLOYEES AND
RETIRED EMPLOYEES; AND FOR OTHER PURPOSES,
Subtitle
TO ESTABLISH A UNIFIED HEALTH CARE
BENEFIT PROGRAM FOR ALL PUBLICLY FUNDED
EMPLOYEES AND RETIRED EMPLOYEES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
SECTION 1. Arkansas Code § 21-5-401 is amended to read as follows:
21-5-401. Legislative intent.
It is the purpose of this subchapter to:
(1) Create a single board to select health insurance and life
insurance plan coverages for state and publie seheel publicly funded
employees and retirees;
(2) Develop self-funded health programs to enhance the ability
to control premiums and utilize managed 'care capabilities if feasible and in
the best interest of plan members; and
(3) Enable a single board to:
(A) Set and manage policies for the health insurance and
life insurance programs of etate and publ ^ sehee' publicly funded employees;
(B) Work in a concerted effort toward a common goal of
parity between publ e seheel and A#A#p publicly funded employee and retiree
insurance programs;
(C) Improve the quality of health care services under the
I1 1 03-04-2009 08:31 DLP244
1
2
3
4
5
6
7
W
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
Stricken language would be deleted from and underlined language would be added to the law as it existed
prior to this session of the General Assembly.
State of Arkansas
87th General Assembly A Bill
Regular Session, 2009 HOUSE BILL 1891
By: Representative Nickels
For An Act To Be Entitled
AN ACT TO ESTABLISH A UNIFIED HEALTH CARE BENEFIT
PROGRAM FOR ALL PUBLICLY FUNDED EMPLOYEES AND
RETIRED EMPLOYEES; AND FOR OTHER PURPOSES,
Subtitle
TO ESTABLISH A UNIFIED HEALTH CARE
BENEFIT PROGRAM FOR ALL PUBLICLY FUNDED
EMPLOYEES AND RETIRED EMPLOYEES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
SECTION 1. Arkansas Code § 21-5-401 is amended to read as follows:
21-5-401. Legislative intent.
It is the purpose of this subchapter to:
(1) Create a single board to select health insurance and life
insurance plan coverages for state and publie seheel publicly funded
employees and retirees;
(2) Develop self-funded health programs to enhance the ability
to control premiums and utilize managed 'care capabilities if feasible and in
the best interest of plan members; and
(3) Enable a single board to:
(A) Set and manage policies for the health insurance and
life insurance programs of etate and publ ^ sehee' publicly funded employees;
(B) Work in a concerted effort toward a common goal of
parity between publ e seheel and A#A#p publicly funded employee and retiree
insurance programs;
(C) Improve the quality of health care services under the
I1 1 03-04-2009 08:31 DLP244