HomeMy WebLinkAbout143-10 RESOLUTIONRESOLUTION NO. 143-10
A RESOLUTION APPROVING A 2011 EMPLOYEE BENEFITS PACKAGE
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
the 2011 employee benefits package as recommended in the staff memorandum attached as
Exhibit "A."
PASSED and APPROVED this 3`1 day of August, 2010.
APPROVED: ATTEST:
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By:
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SONDRA E. SMITH, City Clerk/Treasurer
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CITY COUNCIL AGENDA MEMO
To: Mayor Lioneld Jordan and City Council members
Thru: Paul Becker, Director of Finance and Internal Services
From: Missy Leflar, Human Resource Director°
Date: July 15, 2010
Subject: Employee benefits renewals
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENT CORRESPONDENCE
PROPOSAL:
It is proposed that the City Council renew the City's employee benefits for 2011, as more fully described below.
The proposal is made in order for the employee benefits enrollment process to proceed on time, and so that City
employees may retain what a recent employee survey showed they consider the most positive aspect of their
employment with the City: their benefits. Employee benefits are an extremely important positive in an
environment where economic times have caused raises to cease.
Due to the City's Benefits Brokers' negotiations with our insurance companies, last year the City's costs for
employee benefits remained the same (including the health insurance rates, against a background of 8% - 10%
increases nationally). This year the City's Benefits Brokers negotiated on the City's behalf again, resulting in
the costs being the same except for one item becoming slightly less expensive and another item becoming a
little more expensive:
1. Less expensive: It is proposed that the City change from one insurance company to another which would
result in less expensive City paid life insurance and City paid long term disability insurance products. The
change would be from Reliance Standard Life Insurance Company to The Standard Life Company for the above
two City paid products (as well as the employee paid short term disability product). The life insurance price
would change from 18 cents per $1,000 in coverage to 15 cents per $1,000 in coverage (annual savings of
$15,962). The long term disability price would change from 31 cents per $100 of coverage to 28 cents per
$100 of coverage (annual savings of $8,794). Not only would the City's cost be less expensive, there would be
an enhanced life insurance benefit of up to $50,000 for uniformed police and fire department employees who
die in the line of duty due to an accident. No one should lose any coverage he/she presently has because the
new company would take over the coverage already approved by the old company. The contract would be up
for renewal in three years. We have already switched these companies on another product. Last year the City
switched from Reliance to The Standard for its employee paid life insurance, resulting in less expense for the
employees and better customer service for City staff. The transition went very smoothly. The contract from the
first switch to The Standard would come up for renewal concurrently with this proposed switch to The Standard
for the additional products.
2. More expensive: There is a proposed increase of 2% in the Blue Cross health insurance premiums. This is
against a background of Blue Cross having paid out substantially more in City employee claims than it collected
in premiums for the past twelve months. In addition, it is common knowledge that Health Care Reform is a
separate driver of premiums increasing due to carriers being required to cover more individuals for more
illnesses without having dollar caps on coverage any more. Blue Cross has helped City employees by agreeing
to raise the age of insurable City employee dependents to "under age 26" effective October 1St of this year, even
THE CITY OF FAYETTEVILLE, ARKANSAS
though Health Care Reform doesn't require them to do so until January. They also agreed to keep on coverage
any employee children who already had coverage but would have lost coverage due to having a 25th birthday
prior to October 1st although they were not yet legally required to do this either. Staff considers an increase of
only 2% to be very fortunate for the City, under the circumstances.
The entire proposed 2011 employee benefits package would be the same as in 2010 (but for the change in
carriers described above and the Blue Cross 2% increase) and would 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.
• The Standard Life Company for employee paid life, City paid life, City paid long term disability, and
employee paid short term disability.
• ACE -USA Accidental Death and Dismemberment (both City paid and employee paid).
• Flexible Spending Accounts for dependent care reimbursement and health care reimbursement.
• Delta Trust & Banking Corp. Health Savings Accounts.
• Retirement Plans.
• The Fayetteville School District partners 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 or $25 per month for the employee's entire family.
• The City also offers an Employee Assistant Program through Ozark Guidance Center which makes
counseling more readily available for employees and their spouses who may be in need.
• City employees are also eligible to join the UARK Federal Credit Union financial institution.
• Sam's Club offers City employees a $10 Gift Certificate with their memberships.
Of the above, the City would financially contribute to: Health insurance, City paid life insurance, City paid
long term disability insurance, City paid accidental death & dismemberment insurance, 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.
RECOMMENDATION:
Staff recommends that Council approve the above described renewal of employee benefits and change from
Reliance Standard Life Insurance to The Standard Life Company.
Staff further recommends approval of the Administration's proposal for the City to pay the 2% increase in
health insurance premiums. (Please see attached chart for dollar amount analysis.)
BUDGET IMPACT:
These planned items are being budgeted for in the City's 2011 budget, subject to Council approval of the above.
City staff and staff from the City's Benefits Broker are available to answer any questions you may have.
Missy Leflar
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
8/3/2010
City Council Meeting Date
Agenda Items Only
Human Resources
Division
Action Required:
Finance & Internal Services
Department
Staff recommends approval of the 2011 employee benefits renewals.
$3,694,800 (2011 Estimate)
Cost of this request
XXXX.XXXX.51XX.XX
Account Number
N/A
Project Number
Budgeted Item
X
Category / Project Budget
Personnel Services
Program Category / Project Name
Citywide
Funds Used to Date Program / Project Category Name
Remaining Balance
Budget Adjustment Attached
14_
Fina and Internal Services Director
Chie S
Date
Original Contract Date:
7-/1 to Original Contract Number:
Date
Citywide
Fund Name
0 Previous Ordinance or Resolution #
•7_ I I - zoo
Date
Date
yor
/v
Received in City 07-16-10P03:00 R C V D
Clerk's Office
Received in
Mayor's Office
Comments:
Revised January 15, 2009
RESOLUTION NO.
A RESOLUTION APPROVING A 2011 EMPLOYEE BENEFITS PACKAGE
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
the 2011 employee benefits package as recommended in the staff memorandum attached as
Exhibit "A."
PASSED and APPROVED this 3rd day of August, 2010.
APPROVED: ATTEST:
By: By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
2010 Monthly
Blue Cross
ity's Health:Savings Account
ontnb" tions"
Family
Individual
$645.48
$244.59
$380.83
$144.31
$552.30
$226.17
$354.25
$134.23
2011 Monthly:
Subject to Council
Approval
adition;
ployer'"Po
$93.18
$18.42
$26.58
$10.08
$156.66
$70.80
ployee ;Portion
:ity's Health Savings Account Monthly Contribution
Family
$658.39
$565.21
$93.18
Individual
$249.48
$231.06
$18.42
ighxDeducti
Family
$388.45
$361.87
$26.58
$156.66
Individual
$147.20
$137.12
$10.08
$70.80