HomeMy WebLinkAbout145-11 RESOLUTIONRESOLUTION NO. 145-11
A RESOLUTION APPROVING A 2012 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 2012 employee benefits package as recommended in the staff memorandum attached as
Exhibit "A".
PASSED and APPROVED this 16th day of August, 2011.
APPROVED: ATTEST:
B
BY: ovaita}
SONDRA E. SMITH, City Clerk/Treasurer
a�ve..eville
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENT CORRESPONDENCE
www.accessfayetteville•org
CITY COUNCIL AGENDA MEMO
To: Mayor Lioneld Jordan and City Council members
Thru: Don Marr, Chief of Staff
From: Missy Leflar, Human Resource Director
Date: July 29, 2011
Subject: Employee benefits renewals
PROPOSAL:
It is proposed that the City Council renew the City's employee benefits for 2012, as more fully described
below. The proposal is made now in order for the employee benefits enrollment process to proceed on time, and so
that City employees may retain what many 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.
There are four City paid benefits contracts coming up for renewal for 2012. Three of them are for the same
price as the City currently pays. Staff recommends renewal of these three contracts. The first is with Datapath
Administrative Services for administration of the legally required Section 125 Summary Plan Description and
COBRA Administration services, as well as administration of the employee Flexible Spending Accounts (medical
reimbursement and dependent care reimbursement). The second is with Delta Bank & Trust for the administration
of employee Health Savings Accounts. The third is with Ace USA for group Accidental Death & Dismemberment
insurance ($25,000 coverage in the event an employee dies in an accident or loses a limb).
The fourth City paid benefit contract coming for renewal for 2012 is the health insurance. The City's
current health insurance carrier, Blue Cross, has proposed an increase of 7.75% which would increase the City's
total expenditures for employee health insurance by $ 307,185.24 City staff thus looked into less expensive
alternatives, with the guidance of the City's Benefits Brokers, and it ultimately came down to three choices:
A. Continue with the present Blue Cross coverage at a greatly increased expense of $307,185.24 to the
City and to the employees, with whom such an expensive burden would likely have to be shared;
B. Change to a different Blue Cross coverage that would significantly increase the out of pocket
deductible expense for employees, at an increase less than Choice "A" above but still enough of an
increase the burden might need to be shared by employees;
C. Change to United Health Care coverage for comparable coverage to the current Blue Cross plan with
the same out of pocket deductible expense for employees that they currently have, at significantly less
of an increased expense than either Choice "A" or Choice "B", above.
Staff recommends that Council approve Choice "C", the United Health Care plan. Staff further
recommends that Council approve Choice "C" with the City absorbing the costs of the increase, which would be
$52,458.48 (which is $254,726.76 less expensive than remaining with the current Blue Cross plan). Although the
City has historically split insurance increases with employees 50/50, this has occurred in the context of employees
also receiving raises, cost of living increases, etc. Employees are not currently receiving raises and have not since
THE CITY OF FAYETTEVILLE, ARKANSAS
2009. (Some employees who did not receive their 2009 raises, due to lack of funding occurring that year, are just
now receiving them.) When an increase in payroll deductions for insurance occurs against a backdrop of flat
wages, it obviously cuts an employee's home pay.
Please refer to the attached tables setting out the details of Choices "A", "B" and "C". Please note that the
City currently offers two plans, a "Traditional" (PPO) plan and a "High Deductible" (HDHP) plan. Employees
elect to participate in one or the other. This choice would continue under proposed Choice "C". The dollar
amounts provided in this memo refer to the total cost of the Traditional and High Deductible plans combined.
Council may wish to know that Choice "C", the United Health Care plan, has some differences between it
and the current plan, which include the following items that help explain the less expensive cost:
■ It has different pharmacy coverage for employees in the High Deductible plan. Under the present High
Deductible plan employees pay all pharmacy costs until the high deductible is met ($3,000 for an
individual, $6,000 for a family), then the plan covers prescriptions 100%. Under the Choice "C" High
Deductible plan employees pay all pharmacy costs until the high deductible is met, then pay co -pays of
$10/$35/$60 on prescriptions for the next $1,000, then the plan pays 100%.
• The deductible accumulators are different on the Traditional plan. Under the present Traditional plan, non -
covered expenses go toward one deductible, period. Under the "Choice C" Traditional plan, in -network
expenses go toward the in -network deductible, while out -of -network expenses go toward the out -of -
network deductible.
• For those with coverage on the Traditional plan, there is a higher "co-insurance maximum" dollar amount
that has to be paid by employees for in —network medical services. For those on the High Deductible plans,
it has a co-insurance maximum where there wasn't any before but it's applicable to limited situations. As
you know, a "co-insurance maximum" is the dollar amount at which the plan pays 100% of medical
expenses. It stops the employee's financial loss.
The three month carry over provision that the Traditional Plan had is discontinued. This means that a new
deductible will always begin for each calendar year.
• There will no longer be an out -of -network wellness benefit.
However, there are some plan enhancements which include:
■ There will be a monetary incentive by the insurance company (in the form of gift certificates) for
employees who participate in certain wellness activities. By participating in the designated wellness
activities, employees (and covered spouses) can receive a gift cards which they may select from over 350
national retailers. The gift certificate amounts are for up to $175 per employee (and up to $175 per covered
spouse for family coverage).
• The ambulance coverage is improved. Ambulance services will not have a maximum. Currently there is a
maximum of $1,000 for a ground ambulance and $5,000 for air ambulance services. However these services are
much more costly and often employees have had hundreds of dollars of ambulance expenses that were not covered
by insurance. Under UHC ambulance services will be paid just like other medical expenses with no annual
maximum.
2
THE CITY OF FAYETTEVILLE, ARKANSAS
■ The prescription drug mail order system is enhanced. It will cover more than just maintenance drugs.
• Diabetic supplies will be more favorably covered. Diabetic test strips will be paid under the pharmacy plan,
which means a cost of $10, $30 or $50 (under the Traditional Plan) rather than being applied to the deductible.
• Periodic vision exams will be covered. This coverage will be available every 2 years and will be paid just like other
medical expenses
SUMMARY OF STAFF RECOMMENDATIONS:
Staff recommends that Council approve renewal of the Datapath. Delta Trust, and Ace USA contracts, so
that these same services will continue at no increased cost to the City.
Staff further recommends that the Council approve Choice "C", the United Health Care health insurance
plan, with the City absorbing the cost increase due to employee wages remaining flat.
BUDGET IMPACT:
These planned items are being budgeted for in the City's 2012 budget, subject to Council approval of the
above.
City staff and staff from the City's Benefits Broker, Stephens, Inc., are available to answer any questions
you may have.
"Cu ARENT PU$' "PL C"
UHC -City Takes 100% of Inc
PPO
IUI
Individual
Family
Employee
$18.42
$93.18
City
$232.52
$571.80
Total
$250.94
$664.98
Total Annual City Costs
Current
100% inc to City
Individual- 173
$
479,680.56
$
482,711.52
Family -386
$
2,618,052.72
$
2,648,577.60
TOTAL
$
3,097,733.28
$
3,131,289.12
Cost Difference
$ 33,555.84
Current Monthly:Rate
UHC -City Takes 100% of Inc
HDHP
Individual
Family
Individual
Family
Employee
lo Os
26.51
$10.08
$26.58
City
$137.12
•361.87'•
••••
$143.65
$380.79
Total
7.20`:
38
5
$153.73
$407.37
City HSA Contribution
8
$70.80
$156.66
$.
8.00`
$224.53
$564.03
Total Annual City Costs
Current
100% inc to City
Individual- 50
$
124,752.00
$
128,670.00
Family- 60
$
410,675.76
$
425,660.40
TOTAL
$
535,427.76
$
554,330.40
Cost Difference
Total Cost Difference
$ 18,902.64
$ 52,458.48
fy $1
Existing Plan - 7.75% Inc omen Pim
?LAIbIAA.
Total Annual City Costs
Current Monthly Rate
BCBS-City Takes 100% of Inc
PPO
Individual
Family
Individual
Family
Employee
$18.42
$93.18
$18.42
$93.18
City
$231.06
$565.21
$250.39
$616.24
Total
$249.48
$658.39
$268.81
$709.42
Total Annual City Costs
Current Monthly Rate
Current
HDHP
100% inc to City
Individual- 173
$
479,680.56
$
519,809.64
Family -386
$
2,618,052.72
$
2,854,423.68
TOTAL
$
3,097,733.28
$
3,374,233.32
Cost Difference
$ 276,500.04
Total Annual City Costs
Current Monthly Rate
BCBS-City Takes 100% of Inc
HDHP
Individual
Family
Individual
Family
Employee
$10.08
$26.58
$10.08
$26.58
City
$137.12
$361.87
$148.53
$391.97
Total
$147.20
$388.45
$158.61
$418.55
City HSA Contribution
$70.80
$156.66
$70.80
$156.66
$218.00
$545.11
$229.41
$575.21
Total Annual City Costs
Current
100% inc to City
Individual- 50
$
124,752.00
$
131,598.00
F mily„6
$
410,675.76
$
434,514.96
TOTAL
$
535,427.76
$
566,112.96
Cost Difference
Total Cost Difference
$ 30,685.20
$ 307,185.24
City of Fayetteville
Medical Renewal - Effective Date January 1, 2012
CuEt'V thyiNA',
BENEFITS / COST
Plan Design
PCP Office Visit
Specialist Office Visit
Inpatient Hospital
Emergency Room
Urgent Care
Ambulance
Annual Deductible - IND
Annual Deductible - FAM
Coinsurance
Annual Coinsurance Max - IND
Annual Coinsurance Max - FAM
Rx Drug Copays
Mail Order Rx
Medical Lifetime Max Per Person
Wellness Benefits
3 Month Carryover Provision
Monthly Rates
Employee Only
Family
Estimated Monthly Premium
Estimated Annual Premium
Estimated from Current
Employee Only
Family
Annualized
Monthly H.S.A. Contributions
Employee
Family
Annualized
Total Employer Cost of Plan
Combined Plan Totals
PPO
173
386
92.5%
85.8%
Arkansas Blue Cross Blue Shield
Current Benefits
PPO - HDHP
In Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
$1,000/trip ground
Non Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
$1,000/trip ground
$5,000/year air $5,000/year air
$500
2 x Individual Aggregate
80%/20% 60%/40%
$1,000 $4,000
$2,000 $8,000
$10/$30/$50 Participating Pharmacies
Maintenance Drugs Only
Unlimited
No Ded No Ded
100% 80%
Yes
Current Renewal
$249.48 $268.81
$658.39 $709.42
$297,298.58 $320,340.25
$3,567,582.96 $3,844,083.00
7.75%
$39,923.04 $43,016.32
$218,050.87 $234 951.39
$257,973.90 $277,967.71
$3,095,686.85 $3,335,612.53
$3,095,686.85 $3,335,612.53
HDHP
50
66
93%
93%
$70.80
$156.66
In Network
Ded 8, Coins
Ded & Coins
Ded &Coins
Ded & Coins
Ded & Coins
$1,000/trip ground
$5,000/year air
$3;000
$6,000
100%0%
$0
Non Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
$1,000/trip ground
$5,000/trip air
$6,000
$12,000
80%/20%
Unlimited
Unlimited
Ded & Coins None
Does Not Apply
Unlimited
No Ded No Ded
100% 80%
Not Allowed
Current
$147.20
$388.45
$32,997.70
$395,972.40
$6,844.80
$23,843.06
$30,687.86
$368,254.33
Renewal
$158.61
$418.55
$35,554.80
$426,657.60
7.75%
$7,375.37
$25,690.60
$33,065.96
$396,791.57
Monthly H.S.A. Contributions bv City
$3,540.00 $3,540.00
$10,339.56
$13,879.56
$166,554.72
$534,809.05
$10,339.56
$13,879.56
$166,554.72
$563,346.29
'PIAN c_'I
Option #1
Option #2
United Healthcare
Choice Plus
9AKP Traditional TPF -P HDHP w EmbeddedDoductibie
In Network
Ded & Coins
Ded & Coins
Ded &Coins
Ded & Coins
Ded & Coins
80%After Ded 80% After Ded
No Limit by Ground or Air
$500 $1,000
2 x Individual Aggregate
80%/20% 60%/40%
$2,000 $3,000
$3,000 $6,000
$10/$30/$50 Participating Pharmacies
Included
Unlimited
No Ded
100% Not Covered
Non Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
0
$250.94
$664.98
$300,094.90
$3,601,138.80
0.94%
$40,156.67
$220 233.40
$260,390.07
$3,124,680.84
$3,124,680.84
In Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Non Network
Ded & Coins
Ded & Coins
Ded 8, Coins
Ded & Coins
Ded & Coins
100% After Ded 100% After Ded
No Limit by Ground or Air
$3,000 $5,000
2 x Individual Aggregate
100%/0% 80%/20%
$1,000 $1,000
$2,000 $2,000
$10/$35/$60 Participating Pharmacies
Included
Unlimited
No Ded
100% Not Covered
Not Allowed
$153.73
$407.37'
$34,572.92
$414,875.04
4.77%
$7,148.45
$25,004.37
$32,152.82
$385,833.79
Monthly H.S.A. Contributions bv City
$3,540.00
$10,339.56
$13,879.56
$166,554.72
$552,388.51
Current PPO & HDHP
$3,630,495.90
This is not intended to be a complete summary of benefits. Please refer to the benefit summary for any limitations or exclusions.
Renewal PPO & HDHP
$3,898,958.82
PPO & HDHP
$3,677,069.34
This benefit includes Simply Engaged program.
Stephens
Stephens insurance
.L4
City of Fayetteville
Medical Renewal - Effective Date January 1, 2012
'v' LACI`.
mea
BENEFITS / COST
Plan Design
PCP Office Visit
Specialist Office Visit
Inpatient Hospital
Emergency Room
Urgent Care
Ambulance
Annual Deductible - IND
Annual Deductible - FAM
Coinsurance
Annual Coinsurance Max - IND
Annual Coinsurance Max - FAM
Rx Drug Copays
Mail Order Rx
Medical Lifetime Max Per Person
Wellness Benefits
3 Month Carryover Provision
Monthly Rates
Employee Only
Family
Estimated Monthly Premium
Estimated Annual Premium
Estimated from Current
Employee Only
Family
Annualized
Monthly H.S.A. Contributions
Employee
Family
Annualized
Total Employer Cost of Plan
Combined Plan Totals
PPO
173
386
92.5%
85.8%
Arkansas Blue Cross BlueShield
PPO
Current Benefits
In Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
31,000/trip ground
Non Network
Ded & Coins
Ded & Coins
Ded &Coins
Ded & Coins
Ded & Coins
$1,000/trip ground
$5,000/year air $5,000/year air
$500
2 x Individual Aggregate
80%/20% 60%/40%
$1,000 $4,000
$2,000 $8;000
$10/$30/$50 Participating Pharmacies
Maintenance Drugs Only
Unlimited
No Ded - No Ded
100% 80%
Yes
Current
$249.48
$658.39
Renewal
$268.81
$709.42
$297,298.58 $320,340.25
$3,567,582.96 53,844,083.00
$39,923.04
$218,050.87
$257,973.90
$3,095,686.85
$3,095,686.85
$43,016.32
$234,951.39
$277,967.71
$3,335,612.53
53,335,612.53
HDHP
50
66
93%
93%
$70.80
$156.66
HDHP
In Network Non Network
Ded & Coins Ded & Coins
Ded & Coins Ded & Coins
Ded & Coins Ded & Coins
Ded & Coins Ded & Coins
Ded & Coins Ded & Coins
$1,000/trip ground $1,000/trip ground
$5,000/year air $5,000/trip air
$3,000 $6,000
36,000 312,000
100%0% 80%/20%
$0 Unlimited
$0 Unlimited
Ded & Coins None
Does Not Apply
Unlimited
No Ded No Ded
100% '80%
Not Allowed
Current Renewal
$147.20 $158.61
$388.45 $418.55
$32,997,70
$395,972.40
$35,554.80
$426,657.60
$6,844.80 $7,375.37
$23,843.06 $25,690.60
530,687.86 $33,065.96
$368,254.33 $396,791.57
Monthly H.S.A. Contributions by City
$3,540.00
510 339.56
$13,879.56
$166,554.72
$3,540.00
$10,339.56
$13,879.56
$166,554.72
$534,809.05 $563,346.29
Current PPO & HDHP
03,530,455.95
Renewal PPO & HDHP
33,890,050.02
This is not intended to be a complete summary of benefits. Please refer to the benefit summary for any limitations or exclusions.
Non -Gran fathered Plans with Standard Formulary
In Network
Ded 8, Coins
Ded & Coins
Ded & Coins
Non Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins Ded & Coins
Ded & Coins Ded & Coins
$1,000/trip ground $1,000/trip ground
$5,000/trip air $5,000/trip air
$750
2 x Individual Aggregate
80%/20% 60%/40%
$1,000 $4,000
$2,000 $8,000
510/330/$50 Participating Pharmacies
Maintenance Drugs Only.:
Unlimited
No Ded No Ded
PPACA Wellness
Yes
$264.08
$696.93
6314,700.82
$3,776,409.84
542,259.40
$230,814.85
$273,074.25
$3,276,891.06
53,276,891.06
In Network
r'. Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
$1,000/trip ground
Non Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
$1,000/trip ground
$5,000/trip air $5,000/trip air
$1,000
2 x Individual Aggregate
80%/20% 60%/40%
$1,000 $4,000
$2,000 $8,000
$10/$30/$50 Participating Pharmacies
Maintenance Drugs Only
Unlimited
No Ded.. No Ded
PPACA Wellness
Yes
$255.05
$673.09
5303,936.39
$3,647,236.68
$40,814.38
$222,919.33
$263,733.71
$3,164,804.49
$3,164,804.49
Option 3 - HDHP H.S.A. 613
In Network
:'.Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
$1,000/trip ground
$5,000/year air
$4,000
$8,000
100%0%
$0
$0
Ded & Coins
Does Not Apply
Unlimited
No Ded ''. No Ded
PPACA Wellness
Yes
Non Network
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins
Ded & Coins.
$1,000/trip ground
$5,000/trip air
$8,000
$16,000
80%/20%
Unlimited
Unlimited
None
$151.84
$400.68
$34,036.88
$408,442.56
$7,060.56
624.593,74
$31,654.30
$295,124.86
Monthly H.S.A. Contributions by City
$3,540.00
310,339.56
$13,879.56
$166,554.72
$461,679.58
Option 1 & HDHP
53,840,237.30
Option 2 & HDHP
03,725,150.77
Option 2 PPO & Option 3 HDHP
33,626,484.07
Stephens
Stephens Insurance. t.t.0
Missy Leflar
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
8/16/2011
City Council Meeting Date
Agenda Items Only
Human Resources
Division
Action Required:
Chief of Staff
Department
Staff requests that Council approve the renewal of the following benefits and benefits services at no increased cost:
Datapath Administrative Services (COBRA and FSA), Delta Trust Bank (HSA), and Ace USA (AD&D). Staff further
requests that Council conserve City monetary resources by approving a change to United Health Care for employee
health insurance. While this change would save money, there would still be a $52,458.48 increase in 2012 annual
premiums which staff requests the City absorb in this time of flat employee wages.
3,685,619.52
Cost of this request
XXXX.XXXX.51 XX.XX
Account Number
N/A
Project Number
Budgeted Item
Health Insurance
Category / Project Budget
Citywide
Program Category / Project Name
Citywide
Funds Used to Date Program / Project Category Name
General Fund
Remaining Balance Fund Name
Budget Adjustment Attached
-a—ll
Date
Date
--P,k , g-2- 1(
Finance and Internal Services Director Date
Date
274)0
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
RESOLUTION NO.
A RESOLUTION APPROVING A 2012 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 2012 employee benefits package as recommended in the staff memorandum attached as
Exhibit "A".
PASSED and APPROVED this 16th day of August, 2011.
APPROVED: ATTEST:
By: By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
RESOLUTION NO.
A RESOLUTION APPR • VING A 2012 EMPLOYEE : NEFITS PACKAGE
BE IT RESOLVED B THE CITY C UNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Councilof the City • f Fayetteville, Arkansas hereby approves
the 2011 employee benefits package as ecomme ded in the staff memorandum attached as
Exhibit "A".
PASSED and APPROVED this 16`° d of August, 2011.
APPROVED: ATT T:
By:
By:
LIONELD JORDAN, Mayor SO 1 RA E. SMITH, City Clerk/Treasurer