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Home My WebLink About147-16 RESOLUTION113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 147-16 File Number: 2016-0344 2017 EMPLOYEE BENEFITS PACKAGE: A RESOLUTION TO APPROVE THE 2017 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 2017 employee benefits package as recommended in the staff memorandum attached to this Resolution. PASSED and APPROVED on 8/2/2016 �N% %11111r11E1rr r R K C, IT Attest: �` rrr ,gyp [�' � �,��►► Sondra E. Smith, City Clerk Treasurer Page 1 Printed on 813116 '�- - City of Fayetteville Arkansas 113 West Mountain Street / 1 Fayetteville, AR 72701 (479) 575-8323 Text File File Number: 2016-0344 Agenda Date: 8/2/2016 Version: 1 Status: Agenda Ready In Control: City Council Meeting File Type: Resolution Agenda Number: A. 8 2017 EMPLOYEE BENEFITS PACKAGE: A RESOLUTION TO APPROVE THE 2017 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 2017 employee benefits package as recommended in the staff memorandum attached to this Resolution. City of Fayetteville, Arkansas Page 1 Printed on 8/3/2016 Brenda Reed Submitted By City of Fayetteville Staff Review Form 2016-0344 Legistar File ID 8/2/2016 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 7/14/2016 Human Resources/ Chief of Staff Submitted Date Division / Department Action Recommendation: Staff recommends that Council approve the proposed 2017 employee benefits renewals, as discussed in the memo. xxxx.xxxx.51xx.xx Account Number N/A Project Number Budgeted Item? Yes Budget Impact: Citywide Fund N/A Project Title Current Budget $ 5,045,552.00 Funds Obligated $ - Current Balance 1 Does item have a cost? Yes Item Cost Budget Adjustment Attached? No Budget Adjustment Remaining Budget FT 5.04 a,552.ocl V20140710 Previous Ordinance or Resolution # Original Contract Number: Approval Date: Comments: CITY OF 'flevi1e ARKANSAS MEETING OF AUGUST 2, 2016 TO: Mayor and City Council THRU: Don Marr, Chief of Staff FROM: Brenda Reed, HR Director DATE: July 26, 2016 CITY COUNCIL AGENDA MEMO SUBJECT: Employee Benefits Renewals for 2017 RECOMMENDATION: Staff recommends Council approve renewal of employee benefits for 2017 as outlined below and in the attached spreadsheets. DISCUSSION: Staff and Gallagher Benefit Services, the City's benefits broker, have reviewed annual renewals for employee insurance plans. Employee benefit renewals are brought forward now to ensure the annual open enrollment may proceed according to schedule. Health Insurance The City's claims history for the 12 month look back period, (6/1/2015-5/31/2016), reflects a 98.2% utilization rate of claims paid versus premium paid. Maintaining a utilization rate below 100% has helped keep the premium increase for 2017 at a low 5.6%. Asa benchmark comparison, the national medical and pharmacy annual trend factor is 8%. The City's benefits broker states that 4.1% of our 5.6% renewal increase is driven by Health Care Reform fee requirements. Staff recommends the 5.6% increase dollar amount be shared between the City and City employees with the same premium cost sharing allocation percentages as 2016. Please refer to the attached spreadsheets for details. Due to the low premium increase and the inherent disruption to employees anytime their health insurance coverage changes, Staff and the broker recommend renewing with Blue Cross Blue Shield rather than taking competitive bids for health insurance for 2017. Flexible Spending Accounts Staff recommends American Fidelity replace DataPath as the administrator for Flexible Spending Accounts with no cost for fees and services. Health Savings Accounts Staff recommends First Security Bank continue as the administrator of Health Savings Accounts. Mailing Address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 ,'6197:1:7!1 Staff recommends WageWorks replace DataPath for COBRA/Statutory Insured administration with a cost savings of $0.25 PEPM. City Paid Life and LTD Benefits Staff recommends replacing The Standard with One America to provide City Paid Life Insurance and Long Term Disability insurance for employees with a cost savings of $24,834.72. Employee Paid Dental Insurance Currently dental insurance is provided through Delta Dental. Delta Dental has offered a renewal for 2017 with no premium increase. Staff recommends renewing with Delta Dental. Employee Paid Vision Insurance Currently vision insurance is provided through Superior Vision. Staff recommends renewing with Superior Vision with a minimal premium increase of 4% with a rate guarantee of 4 years. Voluntary Employee Paid Benefits Staff recommends replacing The Standard with One America for optional, employee paid Short Term Disability coverage and Employee Paid Life Insurance. There will be no increase in rates for these two products for 2017. Supplemental Benefits Paid by Employees Staff recommends offering additional supplemental benefits to employees through American Fidelity. Disability Income Insurance Accident Only Insurance Cancer Insurance Critical Illness Insurance Life Insurance AF Term Life Insurance AF Permanent Life Insurance BUDGET/STAFF IMPACT: These planned insurance/benefit items are being budgeted for in the City's 2017 budget. Attachments: • 2016 & 2017 Health Insurance Cost Comparison • 2017 Health Insurance Annualized Cost 2016 & 2017 Health Insurance Cost Comparison TRADITIONAL PPO MONTHLY CALCULATIONS Monthly Monthly Total Monthly Employee PPO Rate Tier Employee Employer o Premiums Employee ^ . Cost Share /o 2016 Single $441.42 $96.28 $345.14 21.81% 2016 Family $1,169.73 $420.00 $749.73 35.91% 2017 Single $466.14 $101.66 $364.48 21.81% 2017 Family $1,235.23 $443.56 $791.67 35.91% HIGH DEDUCTIBLE HEALTH PLAN (HDHP) MONTHLY CALCULATIONS Employer's Monthly Monthly Monthly Health Total Employer Monthly HDHP Rate Total Monthly Employee Employer Employee Cost Savings Contribution (Premium Tier Premiums Contribution Contribution Share % Account + Health Savings Contribution Account Contribution 2016 Single $232.86 $20.18 $212.68 8.67% $70.80 $283.48 2016 Family $617.02 $59.28 $557.74 9.61% $156.66 $714.40 2017 Single $245.90 $21.32 $224.58 8.67% $70.80 $295.38 2017 Family $651.57 $62.62 $588.96 9.61% $156.66 $745.62 2017 Health Insurance Annualized Cost ANNUALIZED CALCULATIONS Current Employee Participants Current ANNUAL Cost to City ANNUAL Cost to City at 2017 (Excludes COBRA and at 2016 rates (Excluding rates based on Current 2016 Statutory Insureds, since Health Savings Account Employee Participants they pay 100% for their Contributions, which would (Excluding Health Savings coverage) not increase in 2017) Account Contributions) PPO Individual 90 $372,751.20 $393,638.40 PPO Family 46 $413,850.96 $437,001.84 HDHP Individual 175 $446,628.00 $471,618.00 HDHP Family _ 340 $2,275,579.20 $2,402,916.00'. TOTAL 651 $3,508,809.36 $3,705,174.24 Additional lost to City for 2017 $196,364.88 '.