Loading...
HomeMy WebLinkAbout181-13 RESOLUTIONRESOLUTION NO. 181-13 A RESOLUTION APPROVING A 2014 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 2014 employee benefits package as recommended in the staff memorandum attached as Exhibit "A". PASSED and APPROVED this 20th day of August, 2013. APPROVED: IC ATTEST: By: h"'-" S SONDRA E. SMITH, City Clerk/Treasurer 'R �...... .1- . .� s RRY- EV111 LEE: .. T:0T'1 F "t� 0- ave t re;1i .Lyj vi le ARKANSAS CITY COUNCIL AGENDA MEMO PROPOSAL: THE CITY OF FAYETTEVILLE, ARKANSAS HUMAN RESOURCES DIVISION 113 West Mountain Fayetteville, AR 72701 P (479) 575-8278 F (479) 718-7698 It is proposed that the City Council renew the City's employee benefits for 2014, 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. There are three (3) City paid benefits contracts coming up for renewal for 2014. One is for health insurance. The other two are for City paid life insurance and City paid long term disability insurance. These are the three contracts requiring Council approval. In addition, there are three employee paid benefits contract matters not requiring Council approval, since the employees pay for these benefits rather than the City. Just for Council's information, one is the Delta Dental insurance renewal. The two others are with a company known as "The Standard" for employee paid Short Term Disability and employee paid life insurance. CITY PAID LIFE AND DISABILITY INSURANCE In addition to providing quality employee paid life and employee paid short term disability insurance for the City (accompanied by excellent customer service), "The Standard" has been providing good City paid life insurance and city paid Long Tern Disability insurance. These City paid products provide a one and a half times the base pay life insurance coverage, as well as income protection related to situations where a person becomes disabled from working for over six months. Please note that it is advantageous to the employees for the same company to handle both the employee paid Short Term Disability and City paid Long Term Disability, because that way the same company already has the person's medical records in the event the disability extends into a Long Term disability situation. The transition between the two thereby becomes very seamless with little or no gaps in benefit checks arriving. The City's benefits broker, Gallagher Benefits Services, recommends renewal with this company after competitively bidding the products and responding to the Administration's and Human Resources' inquiries. The price will go up due to these products being utilized (payouts of death benefits and disability benefits), but that evidences employee need for the products. Please refer to the attached price comparison chart. Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain - Fayetteville, AR 72701 THE CITY OF FAYETTEVILLE, ARKANSAS The third City paid benefit contract coming for renewal for 2013 is the health insurance. For the last several years the City's health insurance companies have consistently paid out far more in claims than they have collected in premiums, resulting in annual losses to them of well over a million dollars each year. Against this background the City's Benefits Broker, Gallagher Benefits Services, Inc., solicited competitive bids from Arkansas Blue Cross Blue Shield and United Health Care. Other bids were not solicited due to the other major companies refusing to bid last year due to the City's high utilization rate. HISTORY The City has experience with both insurance companies. It has a long history of having insurance with Blue Cross for the majority of the last 50+ years. United Health Care is the City's current health insurance carrier. The City has carried two types of plans with each company: PPO (Traditional) insurance and HDHP (High Deductible insurance, which is less expensive) from which employees make a choice. The City switched from Blue Cross to United Health Care as of January 1, 2012 for financial reasons. The coverage and networks are not identical but have been, generally speaking, comparable. Gallagher Benefits Services, the City's benefits broker, advises the Administration that the City's premiums increases are currently primarily driven by two things: The City's past history of excellent negotiating, which has kept it's insurance premiums artificially low (up until last year and this year)2; and High utilization of benefits by employees and employee spouses in the PPO (Traditional) Plan. The utilization rate for 2012 was 128%. This means that for every dollar paid in insurance premiums, the insurance company paid out $1.28. As we all know, you can't run a household budget that way, with more spending than you've got income. The same holds true with health insurance premiums. The income (what we pay in premiums) simply has to go up to meet the expenditures. COMPETITIVE BIDDING The Blue Cross plan has the advantage for employees of having one deductible to be met (regardless of whether the employee's medical expenses are incurred in -network or out -of -network. In addition, Blue Cross offered a High Deductible plan with three advantages to employees: First, there is no higher, separate deductible for the pharmacy benefit that employees have to reach before prescriptions are covered; Second, under Blue Cross' family High Deductible plan, once an individual reaches his/her individual deductible, that person's coverage begins (whereas with United Health Care the entire family deductible must first be met for any one person's coverage to being); and 1 There is anecdotal information from some individual employees that their physicians do not care for having to participate in the United Health Care network. There have never been any such comments from employees with regard to their physicians' attitudes toward being in the Blue Cross network. 2 Please see attached spreadsheet with Arkansas Municipal League Benefits Survey and NOARK Benefits Survey, as well as prior spreadsheet comparing City's premiums with other government and quasi -government NWA and Central Arkansas employers. Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain - Fayetteville, AR 727 THE CITY OF FAYETTEVILLE, ARKANSAS ■ Third, under the Blue Cross High Deductible plan the coverage pays at 100% after the deductible is met (with United Health Care the plan pays 80% after the deductible is met. INCREASE IN EMPLOYEE CONTRIBUTIONS Even with the best possible bids, the increase in premiums is such that the Administration has determined that there will have to be an increase in not only the dollars the City expends, but the dollars the employees have to expend as well. Even though the City will be paying more dollars per employee for health insurance, employee contributions will also be paying more dollars per employee. The employee will also be contributing a larger percentage overall to the PPO (Traditional) Plan and roughly the same percentage but a higher overall contribution to the HDHP (High Deductible) plan. This will bring the City more in line on the PPO with other Northwest Arkansas government and quasi -government employers while ensuring the HDHP (High Deductible) coverage remains affordable. The City's new contribution will be: ■ 80% of total plan cost for individual PPO (Traditional) coverage; ■ 65% of total plan cost for family PPO (Traditional) coverage; ■ 95% of total plan cost for both the individual and family HDHP (High Deductible) coverage. The Administration's goal is to achieve balance between taking care of its employees and being fiscally responsible. It is hoped that the City's 95% contribution toward the HDHP (High Deductible) premium will cause most employees to be able to find it quite affordable —especially when compared with health insurance plans offered elsewhere in the marketplace. This is an effort to take care of employees. That said, the more expensive PPO (Traditional) plan will still be offered to those who desire it, although the employee who wishes that plan will have to assume more of the financial responsibility for carrying it. This is an effort to be good financial stewards of City resources, as well as be more realistic in offering what comparable employers offer in today's job marketplace. WHAT REMAINS THE SAME Since employees will be shouldering more of the financial burden for the PPO (Traditional) Plan, it was thought best to keep deductibles and stop losses the same, as well as the City's contributions into Health Savings Accounts for employees on the High Deductible plan. WELLNESS EFFORT INCENTIVES Last year the City decided to try a premium structure designed to provide incentives for employees to take responsibility for their own healthy practices. These efforts were met with mixed success. On the positive side, at least seven employees gave up tobacco in order to get the tobacco free health insurance premium, several lost weight, and many began pro -active efforts at exercising (including using the free City gym). On the negative side, there seemed to be as much negative feedback as positive feedback on the City's efforts to encourage employees toward healthier lifestyles. Although many people were excited about the Wellness opportunities, many others expressed much negativity. It was a mixed result. The City had planned on enlisting the aid of a professional Wellness Vendor to make improvements to our internally developed, grass roots Wellness Program. It was hoped that more employees would be reached 3 Please refer to the attached spreadsheet comparing the City of Fayetteville's health insurance premiums with those of other NWA and Central Arkansas government and quasi -government employers. Telecommunications Device for the Deaf TDD (479) 521-1316 113 Vest Mountain -Fayetteville, AR 727 THE CITY OF FAYETTEVILLE, ARKANSAS and that there would be more positive results. However, with the dramatic increase in the costs of the health insurance, the Administration determined that the new financial environment precluded the possibility of paying a Wellness Vendor. There will no longer be a Wellness Discount or Tobacco Premium for the health insurance in 2014. The City will continue to offer, for interested employees, Wellness opportunities such as free use of the City Gym, monthly on site Wellness education meetings, free annual health screenings, and other wellness related opportunities that are on site and/or free. This will be offered as an employee benefit in the same sense that the City currently offers an Employee Assistance Program (a certain number free counseling sessions at Ozark Guidance for those in short term stressful situations) or membership eligibility for the U-ark Credit Union or Fayetteville Public Schools exercise facility. Instead of a wellness premium, the incentives to participate will be a) improvement in one's health; and b) eligibility for participants to receive awards for active participation. The City's wellness efforts will be focused on reduction of tobacco use for plan participant smokers, and weight loss & nutrition for plan participants. SUMMARY OF STAFF RECOMMENDATIONS: Staff recommends that Council approve renewal of City paid Life and Disability insurance contracts, as well as approve the new contract with Blue Cross Blue Shield at the proposed City/Employee Contribution levels outlined in the memo and the insurance offerings as described above. BUDGET IMPACT: These planned insurance/benefit items are being budgeted for in the City's 2014 budget. The 2013 total health insurance premiums cost is $4,289,300 for employee and City contributions combined. In 2014 such total health insurance premiums will cost $5,890,900 (an increase of over 1.6 million dollars). If it is presumed that the plan enrollments stay roughly the same they currently are, it is estimated that the City will spend over $500,000 in additional insurance costs for 2014. City staff and staff from the City's Benefits Broker, Gallagher Benefits Services, Inc., will be available at the City Council Agenda Session and City Council meeting to answer any questions the City Council may have. Telecommunications Device for the Deaf TDD (479) 521-1316 113 VVest Mountain -Fayetteville, AR 727 City of Fayetteville Staff Review Form City Council Agenda Items and Contracts, Leases or Agreements 8/20/2013 City Council Meeting Date Agenda Items Only Missy Leflar Human Resources Chief of Staff Submitted By Division Department $ 4,125,600 $ - Citywide Cost of this request Category / Project Budget Program Category / Project Name xxxx.xxxx.51 xx.xx $ - Citywide Account Number Funds Used to Date Program / Project Category Name N/A $ - Citywide Project Number Remaining Balance Fund Name Budgeted Item Budget Adjustment Attached _ '�� / 7t`V(( ✓ (F-Z -/3 Previous Ordinance or Resolution # Diree/tor Date Original Contract Date: Original Contract Number: Date Finance and Internal Services Director Date -6 -J3 Date 6 xy ate ENTERED Received in City c _ Clerk's Office e�i Received in EN ERE0 Mayor's Office ( 3 Revised January 15, 2009 RESOLUTION NO. A RESOLUTION APPROVING A 2014 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 2014 employee benefits package as recommended in the staff memorandum attached as Exhibit "A". PASSED and APPROVED this 201h day of August, 2013. APPROVED: IN LIONELD JORDAN, Mayor ATTEST: SONDRA E. SMITH, City Clerk/Treasurer The Standard Insurance Company CITY PAID LIFE INSURANCE Benefit Amount 1.5 times an Reductions 65 35% 70 60% 75 80% 80 Sion Included of Premium Included ated Life Benefit Included salary, to a maximum of $175,000 lCurrent lRenewal ife rate per $1,000 $0.11 $0.13 ,D&D Rate per $1,000 $0.04 $0.04 otal Volume for 695 employees $46,840,650.00 :ate Guarantee 2 years CITY PAID LONG TERM DISABILITY INSURANCE Definition of Disability Own Occupation - 24 months Duration of Benefits ADEA Elimination Period 180 Days Max. Monthly Benefit $6,000 Min. Monthly Benefit $50 Integration Full Family Mental Illness/Substance Abuse Li 24 months Rehabilitation Services Included Survivor Income Included Pre-existing three/twelve Participation Requirement Current enrollment Rate_ Guarantee 2 years n d�k A $ Rates Current Renewal $0.28 $0.35 Estimated Monthly Premium $7,300.85 $9,647.55 A , CurFent';2Q3 Wealth Insurance Premiums, ,Q7 Total Premium Employer Contribution (%) Employer Contribution ($) Employee Contribution (%j Employee Contribution {$) Insured Status Plan Used Notes Entity Benton County $465.00 100% $465.00 0% $0.00 Self -Insured PPO Little Rock $397.80 100% $397.80 0% $0.00 Fully Insured POS Only has POS North Little Rock $410.69 100% $410.69 0% $0.00 Fully Insured Regular POS Has regular POS and Enhanced POS. Premium includes Medical, COBRA, dental, vision, and life premiums; they're bundled Fayetteville $281.40 88% $247.72 12% $33.68 Fully Insured APO Has both PPO and HDHP Rogers $375.13 86% $324.25 14% $50.88 Fully Insured PPO Medical, Dental, and Prescriptions are bundled Bentonville $282.61 86% $243.03 14% $39.58 Fully Insured PPO Only has PPO Fort Smith $402.78 83% $335.78 17% $67.00 Self -Insured PPO Washington County $349.56 79% $275.00 21% $74.56 Self -Insured PPO Only has PPO University of Arkansas $363:52 73% $264.43 27% $99.09 Fully Insured Point of Service Has Classic Plan and Point of Service Plan. Springdale $416.79 70% $291.75 30% $125.03 Fully Insured PPO Only has the Traditional PPO Plan; Rate plan includes dental, and life insurance Siloam Springs $126.24 68% $86.24 32% $40.00 Self -Insured PPO Has a low deductible and high deductible plan. Numbers are for the low deductible Fayetteville Public Schools $469.68 52% $242.98 48% $226.70 Self -Insured Gold - POS Gold plan is equivalent to point of service. Bronze is equivalent to HDHP. Silver is a mix of two Employee+.Family. ,. Total Premium Employer Contribution (%) . Employer Contribution ($) Employee Contribution (%) Employee Contribution ($) Insured Status Plan Used Notes Entity Bentonville $758.45 86% $652.19 14% $106.26 Fully Insured PPO Only has PPO Rogers $850.90 84% $712.18 16% $138.72 Fully Insured PPO Medical, Dental, and Prescriptions are combined Fayetteville $745.70 82% $612.07 18% $133.63 Fully Insured PPO Has both PPO and HDHP North Little Rock $927.81 75% $695.86 25% $231.95 Fully Insured POS Has regular POS and Enhanced POS. Premium includes Medical, COBRA, dental, vision, and life premiums; they're bundled University of Arkansas $1,151.06 74% $852.23 26% $298.83 Fully Insured POS Has Classic Plan and Point of Service Plan Springdale $1,147.78 70% $803.45 30% $344.33 Fully Insured PPO Only has the Traditional PPO Plan; Rate plan includes dental, and life insurance Fort Smith $1,103.62 68% $753.60 32% $350.02 Self -Insured PPO Benton County $755.00 62% $465.00 38% $290.00 Self -Insured Little Rock $1,094.38 61% $669.80 39% $424.58 Fully Insured POS Only has POS Siloam Springs $345.54 42% $145.54 58% $200.00 Self -Insured PPO Has a low deductible and high deductible plan. Numbers are for the low deductible Washington County $755.16 36% $275.00 64% $480.16 Self -Insured PPO Only has PPO Fayetteville Public Schools $1,538.32 33% $508.36 67% $1,029.96 Self -Insured Gold - POS lGold plan is equivalent to point of service. Bronze is equivalent to HDHP. Silver is a mix of two NOARK 2012 Benefits Survey Highlights Health Insurance Section 55 Northwest Arkansas Employers EMPLOYEE ONLY COVERAGE ♦ Average Deductible: $895 (Fayetteville's $1,000) ♦ Average total employee only premium: $405.61 (Fayetteville's $281.40) ♦ Average employee share of premium: 19.4% (Fayetteville's 12%) FAMILY COVERAGE (DEFINED SAME AS FAYETTEVILLE) ♦ Average Deductible: $1,844 (Fayetteville's $2,000) ♦ Average total family premium: $955.64 (Fayetteville's $745.70) ♦ Average employee share of premium: 32.6% (Fayetteville's 18% Arkansas Municipal League 2012 Compensation and Benefits Survey 26 Arkansas Cities Average employer contribution employee only health insurance 91 % (Fayetteville's 88%) Average employer contribution family health insurance: 57% (Fayetteville's 82%) Average TOTAL monthly family premium in dollars: $717.00 (Fayetteville's $745.70) Fayetteville's 2013 insurance rates were a 22 % increase from the year before. However, Fayetteville's 2013 insurance rates are still lower than many private sector employers and are similar to other Arkansas City employers. .This would tend to support the City's Benefits Broker's assertion that when compared to other employers Fayetteville's pre-2013 health Insurance prices were unusually low - and now are "catching up" to what are more normal marketplace prices. The Citys Benefits Broker is Gallagher Benefits Services They have nationwide expertise in employee benefits matters and serve many employers in our region and beyond. 1/1/2013- 12/31/20B 1/1/2014- 12/31/2014 at Current Contribution Level New rates at New Contribution Level 2013 Total 2013 Monthly 2013 Monthly 204 moral 4prih i . 2013 El Rate Tier Monthly Employee Employer mpo� Prerruums Contribution'F Contribution Cost Share /o r t 1 o Sin le $281.40 $33.68 $247.72 11.97% $386.93 $77.39 $309.54 20.00% Family $745.70 $133.64 $612.06 17.92% 1 $1,025.34 $358.87 $666.47 35.00% 1/1/2013- 12/31/2013 at Current Contribution Level 1/1/2014- 12/31/2014 New rates at New Contribution Level 2013 Total 2013 Monthly2013 Monthly 2Q14 s-o .."1C�ti.t1 rr y2013 EmployeeRate Tier Monthly Employee Employer ('�� oW$t Share /o Premiums Contribution" Contribution dt 3a ff r � Q _ 5tn le $150.07 $8.28 $141.79 5.52% $204.11 $10.21 $193.90 5.00% $70.80 $264.70 jFarruily 1 $397.67 1 $21.80 $375.87 1 5.48% 1 $540.86 $27.04 $513.82 5.00% $156.66 1 $670.48 2013 Contribution rates shown are for employees hired prior to 11112013. Employees hired after that date are already paying higher percentages of 18% for individual coverage (either plan) and 24% or family cowra a (either lan). Note: Per IRS rules, to be eligible for a Health Savings Account an employee must only be covered by their High Deductible insurance coverage. The money may only be spent on qualified medical expenses not covered by insurance, such as medical or prescription payments made due to the deductible not yet being met. In addition to the employer making contributions, employees are free to also contribute to their Health Savings Account with pre-tax dollar deducted from payroll. ,40 W�,k W,�)WA(P Missy Leflar Submitted By City of Fayetteville Item Review Form 2013-0166 Legistar File Number NA City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item Action Required: Chief of Staff Department The Mayor's signature is needed on this health and dental paperwork, in follow up to the City Council's approval of the 2014 health insurance in August. I(Council approval was not required on the Dental renewal since it's 100% employee paid, so the Administration approved that in August as well.) Does this item have a cost? NO Cost of this request Category or Project Budget Account Number Funds Used to Date $0.00 Project Number Remaining Balance Budgeted Item? Budget Adjustment Attached? Program or Project Name Program or Project Category Fund Name Previous Ordinance or Resolution # 181-13 Original Contract Number: Comments: The Blue Cross paperwork was only recently received, and is time sensitive, thank you. ?*// I //- ?-/:E 7 V20130812 l THE CITY OF FAYETTEVILLE, ARKANSAS MM ARKANSAS MEMO To: Mayor Lioneld Jordan Thru: Don Marr, Chief of Staff From: Missy Leflar, Human Resource Director Date: November 5, 2013 Subject: Blue Cross & Delta Dental paperwork HUMAN RESOURCES DIVISION 113 West Mountain Fayetteville, AR 72701 P (479) S75-8278 F (479) 718-7698 Please sign the attached two documents so that I may send them to the insurance companies, thank you. One is the Blue Cross paperwork in follow up of the Council's August approval of the 2014 Blue Cross insurance. I have carefully reviewed it and made all necessary corrections for accuracy. The other document is a formal amendment to the dental insurance, formalizing what the Administration already agreed to: Dropping an extra network benefit that employees weren't using anyway, in order to keep their dental insurance prices from increasing as much. You'll recall that the dental insurance was approved by the Administration, since 100% employee paid insurance products do not require Council approval. Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain - Fayetteville, AR 72701 Delta Dental Plan of Arkansas, Inc. Amendment to Fully Insured Agreement City of Fayetteville Group Number 1941 The above contract is amended as follows: ■ Basic Restorative Services coinsurance is changing from 90% MPA to 80% MPA when using a Delta Dental PPO Provider. ■ Major Restorative Services coinsurance is changing from 60% MPA to 50% MPA when using a Delta Dental PPO Provider. ■ Child Orthodontic Services coinsurance is changing from 60% MPA to 50% MPA when using a Delta Dental PPO Provider. This Amendment shall become effective on January 1, 2014. CITY OF AYET VILLE ,r-- L!o cad 7o0 n!, MAYOR, Name and Tit Date Amendment to City of Fayetteville Contract Date: July 22, 2013 Form No —1941 DELTA DENTAL PLAN OF ARKANSAS, INC. �' ' Chief Executive Officer Name and Title July 22, 201 Date EMPLOYER APPLICATION Arkansas B1ueCross B1ueShield Aa Independent licensee of the Blue Cross and Blue Shield Association (APPLICATION by: CITY OF FAYETTEVILLE (hereinafter called "Policyholder") for a Group Policy covering the employees of the Policyholder and the eligible dependents of such employees. The Policyholder intends hereby to establish and maintain an employee benefit plan (the "Plan") for the Policyholder's employees and eligible dependents, to contribute to the cost of the Plan, and to actively promote the Plan to the Policyholder's employees. Legal Name of Business: CITY OF FAYETTEVILLE D/B/A: CITY OF FAYETTEVILLE Street Address. 113 West Mountain City, State, Zip: Fayetteville , AR , 72701 County: Washington Mailing Address: (if different from Street) ATTN HR 113 W MOUNTAIN City, State, Zip: Fayetteville , AR , 72701 Telephone #: 479-575-8298 Fax #: 479-718-7698 .......... Fed. Tax I.D #: 71-6018462 Exec. Contact: Lioneld Jordan Group Administrator: Missy Leflar �E-Mail: mleflar@fayetteville-AR.gov Primary SIC Code: 9199 SIC Description: General Government, NEC Business Type: Government Entity Agent: Agent's Lic #: Agent's Company: Agent's Tax Id: The Policyholder, as Plan Administrator, assumes responsibility for the accuracy of information presented to Arkansas Blue Cross and Blue Shield ("ABCBS"), including all information on the employment status and eligibility of individuals to be covered under the Plan, as well as medical information provided with respect to each such individual. The Policyholder agrees that if misrepresentations are made in any of the information provided for rating or in this Group Application or any of the materials submitted with it, including, but not limited to, individual applications and medical information, then ABCBS may cancel or rescind this Group Policy. The Policyholder further agrees that if misrepresentations or false or misleading information is presented in filing of any claims hereunder ("improper claims"), ABCBS may cancel or rescind the coverage of any individual involved in presenting such a claim. Further, ABCBS may cancel or rescind the entire Group Policy if the Policyholder or any representative of the Policyholder knew or should have known of the improper claims, or if the Policyholder's action or inaction contributed to presentation of improper claims. The Policyholder hereby appoints the Board of Directors ("Board") of Arkansas Blue Cross and Blue Shield ("ABCBS"), as its proxy to act on its behalf at all meetings of members of ABCBS. This appointment shall include such persons as the Board may designate by resolution to act on its behalf. This proxy gives the Board, or its designee, full power to vote for the Policyholder on all matters that may be voted upon at any meeting. The annual meeting of Members is held each year at the home office of ABCBS located at 601 S. Gaines Street, Little Rock, Arkansas, on the third Monday of March, at 1:00 p.m. If the third Monday of March is a legal holiday, then the meeting will be at the same time and place on the next day after, which is not a legal holiday. A special meeting may be called upon notice mailed not less than ten (10) or more than sixty (60) days prior to such meeting. This proxy, unless revoked, shall remain in effect during the Policyholder's membership in ABCBS. The Policyholder may revoke this proxy in writing by advising ABCBS, attention Legal Division, of such at least five (5) days prior to any meeting. The Policyholder may also revoke its proxy by attending and voting in person at any Member's meeting. 10-102GRPAPP R12/13 !BENEFIT SELECTION PREFERRED PROVIDER ORGANIZATION (PPO) REQUESTED EFFECTIVE DATE, PENDING APPROVAL IS: 1/1/2014 Waiting Period Note: Effective Date is first of the month following the Waiting Period. Is Waiting Period for Initial Enrollment Waived? No Date of Open Enrollment September Date of Additional Open Enrollment October If a month is not specified the Group's Open Enrollment will be the month prior to the Group's renewal date. ., Class . Class Description Waiting Period lContribution i; I' Group Health 1 Month Employee 80 % Dependent 65 % Note: The Employer must pay a minimum of 50% of the Employee premium. This Policy may be terminated by the company if the Policyholder fails to contribute the percentage of Employees' premium specified above. Maximum Dependent Age 26 Mandated Mental Health Parity: Yes Please Indicate whether a HRA, or mechanisms utilized to reduce the employee's portion of health plan costs, is either in place or planned to be purchased. No Rates offered for this plan are contingent on assertions submitted by the insurance applicant (or its agent) that there is no HRA or other funding mechanism in place, nor intent to purchase such an arrangement. Upon evidence to the contrary, the group health plan is subject to Deductible: $1000 �- Deductible Carryover: Yes Family Deductible _._ 2 ............ Basis: Accumulated Coinsurance: 1111111 809/o/60% True Out -Of -Pocket Max$3000 True Out -Of -Pocket Max Family: $6000 Out -of -Network Calendar Year Coinsurance Max: $4000 ._. _ Lifetime Maxtmum: Unlimited Preventive Health Services (PPACA required) — Prescription Drug Rider Plan: $10/ $30/$50 Standard Formulary Mail Order Drug - 2x Copay (90 days) - Based on actuarial review, this drug benefit option is creditable to the standard Medicare Part D prescription coverage. PPO Optional Benefits: I Inpatient Copay - None - Copayment - Declined IM nity - Elected Blue Card Supplemental Accidental j Arkansas Mandated Offer Benefit Riders: You Must Elect or Reject Each Rider: Mammography -Reject Substance Abuse -Reject Psychiatric Condition - Reject TMJ* - Reject Hearing Aid -Elect 'Rejection of the TMJ Benefit Rider means covered benefits provided to Covered Persons will not include temporomandibular Joint disorders (TMJ) or craniomandibular disorders. Term Life and AD&D through USAble Life is not Provided 10-102GRPAPP R12/13 �- --... _ RATES - PPO XXX - 1 - j— -- _ �. j FTwo Tier Composite [Total Premium I) Employee $386.93 Family �� $1025.34 If there is an agent or broker involved in this coverage transaction they may receive compensation from Arkansas Blue Cross and Blue Shield, or one of its affiliates, for his or her services related to the placement of this coverage. Any such compensation is included in the premium paid by the covered person. For more information on the compensation !involved in this transaction, please direct your inquiry to the agent or broker. Grandfather Status - Our records indicate that your health plan is not grandfathered. Please confirm if you agree with the grandfathered status as indicated above. _Yes, I agree with the status as shown No, I disagree with the status as shown because 10-102GRPAPP R12/13 Drug Coverage: Standard Formulary - Subject to Deductible Based on actuarial review, this drug benefit option is creditable to the standard Medicare Part D prescription coverage. Arkansas Mandated Offer Benefit Riders: You Must Elect or Reject Each Rider: Mammography -,Reject (Substance Abuse - Reject Psychiatric Condition - Reject ,TMJ* - Reject `Rejection of the TMJ Benefit Rider means covered benefits provided to Covered Persons will not include temporomandibular Joint disorders (TMJ) or craniomandibular disorders. Term Life and AD&D through USAble Life is not Provided 10-102GRPAPP R12/13 RATES - HSA 613 -1 Two Tier Composite Total Premium Employee $204.11 Family $540.86 If there is an agent or broker involved in this coverage transaction they may receive compensation from Arkansas Blue Cross and Blue Shield, or one of its affiliates, for his or her services related to the placement of this coverage. Any such compensation is included in the premium paid by the covered person. For more information on the compensation involved in this transaction, please direct your inquiry to the agent or broker. Grandfather Status - Our records indicate that your health plan is not grandfathered. Please confirm if you agree with the grandfathered status as indicated above. Yes, I agree with the status as shown No, I disagree with the status as shown because 10-102GRPAPP R12/13 Group health plans for employers with 20 or more employees on more than 50% of the business days in the previous calendar year are subject to Cobra. Employers are required to provide qualified beneficiaries an election period during which the beneficiary can elect to continue coverage under the guidelines. We offer the services of a vendor, "Ceridian" to assist you in administering Cobra (no additional cost). Both full time and part time employees are counted to determine if a plan is subject to Cobra. Each part-time employee counts as a fraction of an employee, with the fraction equal to the number of hours worked divided by the number of hours used to determine full time status.' (Yes_X_) (No_) As an employer, are you currently obligated by law to comply with COBRA? (Yes_) (No_X_) Do you want to use the services of Ceridian? (Yes_) (No_X_) If yes, are you currently contracting directly with Ceridian? 1 COBRA Handbook 2009, ¶4.03[E][2]; 26 CFR §54.4980B-2 Q/A 5(e). 2 42 CFR §411.170. Medical Loss Ratio - The determination of Large and Small Groups is based upon the average number of employees employed by the employer on business days during the proceeding calendar year. The Public Health Services Act §2791(e) provides (1) The term "large employer" means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 101 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year. (2) The term "small employer" means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year. policyholder is a _X_ large employer small employer (check one). In the event federal or state law requires the Company to rebate a portion of an annual premium payment, Company will pay the Policyholder the total rebate applicable to the Policy, and Policyholder shall use the amount of the rebate that is proportionate to the total amount of premium paid by all Employees under the policy for the benefit of Employees in one of the following ways, at the option of the Policyholder: 1. For all Employees covered under any option offered under the policyholder's group health plan at the time the rebate is received by the policyholder, to reduce the Employees' portion of premium for the subsequent policy year; 2. For Employees covered, at the time the rebate is received by the policyholder, under the group health plan option for. which the Company is providing a rebate, to reduce the Employees' portion of premium for the subsequent policy year; 3. A cash refund to Employees enrolled in the group health plan option, at the time the rebate is received by the policyholder, for which the Company is providing a rebate; and 4. The reduction in future premium or the cash refund provided under paragraphs 1, 2 or 3 of this section may, at the option of the policyholder, be: divided evenly among such Employees; divided based on each Employee's actual contributions to premium; or apportioned in a manner that reasonably reflects each Employee's contributions to premium. 5. The portion of a rebate based upon former Employees' contributions to premium must be aggregated and used for the benefit of current Employees in the group health plan in any manner permitted by this section. Policyholder will indemnify the Company in the event the Company suffers any fines, penalties or expenses, including reasonable attorney's fees, due to the Policyholder's failure to carry out its obligations under this Section L of the 10-102GRPAPP R12/13 1EMPLOYEE INFORMATION Under the Medicare Secondary Payer Rules, it is the Employer's responsibility to annually inform Arkansas Blue Cross of proper employee counts for the purpose of determining payment priority between Medicare and Arkansas Blue Cross. Arkansas Blue Cross is required to furnish these counts to the Centers for Medicare and Medicaid Services.. CMS.. - Full -Time ;; means an etive em loy.ee with a.minimum.of.30-hrs/week &-48-weeks/year SP.t�TQJal Full -Time Employees enrolling (including those satisfying their waiting period within 3 (� N I C7✓v . months after the effective..date Full -Time Employees waiving (including those satisfying their waiting period within 3 ( FN �A months after .the effective. date): `(� C� _ CBRAContinuees_ Enrollin : �.-t"ar '=� �:::.._._� T uTo .4 IN'Sum S . ortx" � �® N 0- [Total Enrollin .and -Waiving:b New Full-time employees who will Not satisfy the Waiting period prior to the effective Pf ..art Time/Seasonal/T.em ora - ..Em igyees..:... f of [Total Iof Ern lo. ees: ...... .. ...... _ ........ .... ��. Minimum Number of Insured Employees. To meet large group enrollment guidelines a group must have at least fifty- one full-time enrolled employees. Groups whose enrollment subsequently drops below fifty-one enrolled must be rated as a small group upon renewal. Minimum Participation Requirements. Employees covered through other comprehensive major medical -type coverage may be waived from the eligibility count. 75% of all eligible employees without waivers must be insured, and no less than 25% of the full-time employees must enroll. This Policy may be terminated by the Company if the number of insured Employees falls below the minimum Inumber of insured Employees specified above or if the percentage of eligible Employees of the Policyholder icovered b. _the .Policy ..be.comes.less..than the, ercenta e_of Em to ee participation. s ecified.above. Special Grou Considerations Form#.23-21.56 Descri tion Hearinq:Aid„_Rider _Special Group Considerations Form#23-2444, Description Statutory Insured 10-102GRPAPP R12/13 This Application is made and delivered in the State of Arkansas and is governed by the laws of Arkansas and the United States of America. This Application is incorporated in and made a part of the Group Policy and Benefit Certificate. I hereby apply for the above referenced coverage and agree the group insurance, subject to the terms and conditions of the policies applied for, will take effect as of the next available effective date after approval, provided this application is approved and the premium is received by the home office of Arkansas Blue Cross and Blue Shield. I also understand 1 Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in connection with an application for insurance is guilty of a crime and may be . ___ subiect to fines_ and confinement in prison. ___ . 1. Policyholders' n Signed at � 2V l �' �rk' this day of Novak 20B (City, State) [full legal name of Policyholder] By:' Authoriz d Si ature MAY_og' Title or Position Lfone�� Toraa� Printed Name 2. Agent I hereby certify that all of the information contained in this employer application is correct to the best of my knowledge, and I know nothing unfavorable about this firm or any individual proposed for coverage (except as noted on the employee'. applications). I have complied with the underwriting rules and regulations and have explained in detail the coverage to the member firm and its employees including the preexisting condition limitations and the qualifications of the effective date provisions. I understand that Arkansas Blue Cross and Blue Shield will have no liability until this application has been approved and the premium is received. Agent 11 Signature Insurance License # / Agency Fed. Tax ID # 10-102GRPAPP R12/13 Zaylltville LETTER OF UNDERSTANDING THE CITY OF FAYETTEVILLE, ARKANSAS HUMAN RESOURCES DIVISION 113 West Mountain Fayetteville, AR 72701 P (479) 575-8278 F (479) 718-7698 The purpose of this Letter of Understanding is to reflect the following understandings between the City of Fayetteville and Arkansas Blue Cross Blue Shield concerning 2014 health insurance coverage for City of Fayetteville employees: 1. The City of Fayetteville does not insure temporary employees. Temporary positions are formally advertised as such and the resultant new hires are designated as Temporary from the beginning of their employment. A temporary position (as opposed to a "regular" position) is filled with the expectation that the position will have an end date no greater than eighteen months after the start date. It is possible some Temporary employees may work for longer than 48 weeks but they shall in no event work longer than 18 months. 2. The City of Fayetteville has an additional closed class consisting of one part time person, Eldon Roberts. Eldon is the sole remaining member of a closed class of part time insureds who were grandfathered in as insureds a few years ago when the City ceased offering insurance to part time employees. The City has not offered and does not offer insurance to any other part time employees since the creation of this closed class. 3. The City's policy governing the definitions of regular, temporary, full time, and part time employees is attached. The City only offers insurance to regular, full time employees. Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain -Fayetteville, AR 72701 Ic1 Work Status Categories Page 1 of 5 CITY OF FAYETTEVILLE, ARKANSAS POLICY AND PROCEDURE Subject: Work Status Categories Policy Number: HR-08 Original Policy Date: December 26, 2011 Effective Date of New/Revised Policy: December 26, 2011 Revision Dates: Custodian: (Division) Human Resources Mayor's Signature and Date_ V L v HR-08.0 PURPOSE: The intent of this policy is to clarify the City's definitions of "Full Time", "Part Time", and "Temporary" with regard to City jobs, so that it is understood how paid leave, insurance benefits, and other benefits of employment apply to a given position. The policy also describes the procedures to be used for changing a position from one category to another. HR-08.1 POLICY: A. REGULAR FULL TIME POSITIONS: A regular full time position is defined as a non -temporary position for which hours matching one of the full time categories, as described below, are normally scheduled. Full time positions will be eligible for employee insurance and retirement benefits. There are four permitted classifications of full time positions. A position may not be moved around among those categories (or the part time or temporary categories) unless the required written approvals are first obtained using a Personnel Action form: 1. Full time 40+: A position classified as "full time 40+" is a position for which 40 or more work hours per week are scheduled. Paid leave is accrued at 100% of current rates as described in the leave policies. The majority of City full time positions will fall under this category. 2. Full time 36: A position classified as "full time 36" is a position for which 36 work hours per week are scheduled. Paid leave is accrued at 90% of current rates as described in the leave policies. HR-08 Work Status Categories Page 2of5 3. Full time 32: A position classified as "full time 32" is a position for which 32 work hours per week are scheduled. Paid leave is accrued at 80% of current rates as described in the leave policies. 4. Full time 7(k): A position classified as "full time 7(k)" only applies to uniformed Fire and Police Department positions to which Fair Labor Standards Act Section 207(k) applies a fourteen day "look back period" for purposes of calculating overtime. It is therefore a category defined by the City as a position for which 80+ hours are worked within a two week payroll period, although it's possible that during some individual weeks a person might work fewer than 40 hours. Paid leave is accrued at 100% of current rates for Fire or Police uniformed positions as described in the leave policies. The majority of uniformed positions will fall in this category. Those that don't will fall under one of the other full time categories, most commonly the "full time 40+" category. B. REGULAR PART TIME POSITIONS: A regular part time position is defined as a non -temporary position for which hours matching one of the part time categories, as described below, are normally scheduled. Part time positions will not be eligible for employee insurance or retirement benefits. Regular part time positions are eligible for accruing and utilizing paid leave the same as regular full time positions, only at a reduced percentage of the regular full time accrual rates. There are three permitted classifications of part time positions. A position may not be moved around among those three categories (or among the full time or temporary categories) unless the required. written approvals are first obtained using a Personnel Action form. 1. Part time 30: A position classified as "part time 30" is a position for which 30 work hours per week are scheduled. Paid leave is accrued at 75% of the current rates. Note: Due to this threshold being so close to the "Full Time 32" category (which is entitled to certain benefits at City expense), it is extremely important that the employee's supervisor not permit an employee in a position assigned to this category to cross the line of working more than 30 hours. It is the employee's supervisor's responsibility to prevent this from occurring. It is likewise the employee's responsibility to never knowingly work more than 30 hours in a workweek. 2. Part time 20: A position classified as "part time 20" is a position for which 20 work hours per week are scheduled. Paid leave is accrued at 50% of the current rates. 3. Part time 10: A position classified as "part time 10" is a position for which 10 work hours per week are scheduled. Paid leave is accrued at 25% of the current rates. C. TEMPORARY POSITIONS: HR-08 Work Status Categories Page 3 of 5 A temporary position (as opposed to a "regular" position) is one in which the position is filled with the expectation that the position will have an end date no greater than eighteen months after the start date. Temporary positions offer no benefits. When an employee leaves a temporary position, the employee may not be re -hired by the City into any temporary position for at least 90 calendar days, with two exceptions: 1. if a temporary employee successfully posts for another temporary position that is either higher paying or in another Department/Division, then that temporary employee's "18 month time limit" as a temporary employee shall start over from day one in the new position. However, this shall only be allowed one time per person. fM 2. A Parks Department temporary summer employee shall be eligible to post for and be hired into a Parks Department Temporary Site Supervisor position without limitations and vice versa. NOTE: Managers should not create temporary positions solely as an attempt to avoid providing employees with benefits or for the purpose of avoiding the constraints of allotted budgeted positions. Any manager that violates this rule will be subject to a disciplinary action. D. COMBINING POSITIONS: The combination of non -benefit eligible positions to create a benefits eligible position will require, in addition to the approvals outlined in the "procedure" section, the approval of the City Council. The combination of any two positions into one position will always require the approvals outlined in the "procedure" section, below. E. ONE OCCUPANT OF TWO DIFFERENT CITY POSITIONS: Due to budget considerations relating to the costs of benefits and overtime, one person may not occupy two positions (either part time or full time) at the same time. The sole exception to the above rule is that a person may occupy two part time temporary positions at the same time if they are seasonal (related to summer only employment), are anticipated to last fewer than four months in overlap, and so as long as the Department head signs a memo that is filed in that individual's personnel file in which the Department head agrees to be accountable for ensuring that no overtime results. F. NON -EMPLOYEES: HR-08 Work Status Categories Page 4 of 5 The following are not employees of the City: Vendors, independent contractors, volunteers, student volunteers serving in unpaid internships, and students providing services through a university's work-study program. G. TERM EMPLOYEES: On rare occasion, such as where a grant funded project supplies money to hire an employee for only the life of that project or through a particular date, the City may hire an employee with a specific end date (or "term") of employment anticipated and agreed upon at the time of hiring. Such employees are still in an "employment at will" arrangement and may quit or be terminated at any time during the employment arrangement without it being considered a breach of contract. Such term employees will receive the same benefits, accruals, etc. as other employees falling within their same full time, part time, regular, and/or temporary status. The only thing different about a term employee is that his/her anticipated end date is known at the time of hiring. No one should consider himself/herself to be a "term employee" unless there is a specific discussion and written documentation approved by the City Attorney's office and HR concerning that designation that occurs at the onset of his/her employment. Such documentation should be placed in the person's personnel records. HR-08.2 PROCEDURE: CHANGING WORK STATUS CATEGORIES: It should be noted that it is the position that is categorized as "full time", "part time", or "temporary", not the individual within the position. Thus, when an individual is hired or promoted. into a position, the individual should not enter the position with the expectation that he/she (or the supervisor) can change the category of "full time", "part time", or "temporary" at will according to their individual preferences. Further, if there is an FLSA exempt occupant of a position at the time a position is re -categorized to greater or fewer work hours, the occupant's exempt salary will be pro -rated up or down accordingly. When a position is changed to a different category, the City budget is affected, as is co- worker workload, and there can be employee benefit considerations as well (such as COBRA deadlines that must be met). Therefore, positions should not be changed to a different work status category lightly and may only be re -categorized when: 1. It can be shown to be in the best interests of the City; and 2. Written approval is obtained by: a. Completing a Personnel Action form that gets written approval from that area's Division Head, Department Head, Human Resources, the Budget Director, the Finance Director, and the Chief of Staff. The PA form should contain an explanation of why the re -categorization is in the best interests of the City; and and Work Status Categories Page 5 of 5 b. Completing a Position Control form that likewise gets the required written approvals AND notifying Human Resources when the approvals have been made so that any benefits and payroll changes can be processed; c. In the event that an FTE (Full Time Equivalent) headcount increase would result, City Council approval must also be obtained since the City Council would have already approved that year's budget with that year's FTE headcount.