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Home My WebLink About171-17 RESOLUTION113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 171-17 File Number: 2017-0397 2018 EMPLOYEE BENEFITS PACKAGE: A RESOLUTION TO APPROVE THE 2018 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 2018 employee benefits package as recommended in the staff memorandum attached to this Resolution. PASSED and APPROVED on 8/15/2017 Attest: L . Z�ti Sondra E. Smith, City Clerk Treasurer rr CITY • F.�`}�• � 1, • • 11 ]' 'fI IV 0 C001- • Page 1 Printed on 8116117 City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Text File File Number: 2017-0397 Agenda Date: 8/15/2017 Version: 1 Status: Passed In Control: City Council Meeting File Type: Resolution Agenda Number: D. 4 2018 EMPLOYEE BENEFITS PACKAGE: A RESOLUTION TO APPROVE THE 2018 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 2018 employee benefits package as recommended in the staff memorandum attached to this Resolution. City of Fayetteville, Arkansas Page 1 Printed on 8118/2017 t Brenda Reed Submitted By City of Fayetteville Staff Review Form 2.017-0397 egistar File ID 8/15/2017 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 7/28/2017 HUMAN RESOURCES (120) Submitted Date Division / Department Action Recommendation: Staff recommends that Council approve the proposed 2018 employee benefits renewals, as discussed in the memo. Budget Impact: xxxx.xxx.xxxx-5108.xx Account Number Citywide Fund Project Number Project Title Budgeted Item? Yes Current Budget $ 5,113,176.00 Funds Obligated $ 2,728,426.22 Current Balance 1 Does item have a cost? NA Item Cost $ Budget Adjustment Attached? NA Budget Adjustment $ Remaining Budget V20170601 Previous Ordinance or Resolution # Original Contract Number: Comments: Budget information is current 2017. Approval Date: CITY OF FAYETTEVILLE ARKANSAS MEETING OF AUGUST 15, 2017 TO: Mayor and City Council THRU: Don Marr, Chief of Staff FROM: Brenda Reed, HR Director DATE: July 28, 2017 SUBJECT: 2018 Employee Benefits Renewals CITY COUNCIL MEMO RECOMMENDATION: Staff recommends Council approve the employee benefits package for 2018 as outlined below and in the attached spreadsheets. DISCUSSION: Staff and Gallagher Benefit Services, the City's benefits broker, have reviewed the 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 In a twelve month look back period of June 1, 2016 through May 31, 2017, the City's health claims show a 102% utilization rate of claims paid versus premium paid. A utilization rate above 100% has contributed to a 20% premium increase for 2018. As a benchmark comparison, the national medical and pharmacy annual trend factor is 6.6%. In Arkansas, the annual trend factor for medical and pharmacy combined is 9.4%. The City's benefits broker states that 4% of our renewal increase is driven by Health Care Reform fee requirements. To manage costs, staff recommends adding 2 new PPO health plans and 1 new HDHP option in addition to the existing PPO and HDHP options. To accommodate a variety of family types in the workforce and manage costs, staff recommends increasing the tier structures for each plan from 2 tiers (employee only and family) to a 4 tier structure for each plan (employee only, employee + spouse, employee + children and family). The rates for each tier in the PPO and HDHPs are based on actuarial calculations to allocate premium costs across tiers. The employer contribution to the HDHP HSAs for each tier is based on actuarial calculations of the lesser (EE only tier) to the greater (Family tier) depending on the number of possible members in each tier. Please refer to the attached spreadsheets for the recommended tier rate and cost sharing percent. Staff and the broker recommend renewing with Arkansas Blue Cross Blue Shield in 2018 since other health insurance bids for the City were costlier. Mailing Address. 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 rKe7:1: Staff recommends renewing with WageWorks as the administrator for COBRA/Retirees billing and administration. City Paid Life and LTD Benefits Staff recommends renewing with One America to provide City Paid Life Insurance and Long Term Disability insurance for employees with no price increase. Flexible SpendinQ Accounts Staff recommends American Fidelity continue as the administrator of Flexible Spending Accounts with no cost for services. Health Savings Accounts Staff recommends First Security Bank continue as the administrator of Health Savings Accounts with no cost for services. Employee Paid Telemedicine Visits Telemedicine is the remote delivery of health care services and clinical information using telecommunications technology. This includes a wide array of clinical services using internet, wireless, satellite and telephone media. Telemedicine has been growing rapidly because it _ increases access to healthcare and reduces medical costs. Other advantages of telemedicine are less time away from work, elimination of child care issues, on demand options, access to specialists, less exposure to catching an illness, less time in a waiting room and better health. Staff and Gallagher Benefit Services recommends the City offer Northwest Health System Telemedicine Services. Telemedicine providers are through Northwest Health Urgent Care Clinics Monday -Saturday 8AM-8PM and Sunday 11AM-5PM. Primary care, psychology, neurology, pulmonology, and cardiology specialists are available. • Length of an average visit is 15 minutes, but may require additional time due to the diagnosis _ - • On demand visits are available • Appointments may be scheduled through the website or by phone • Telemed services are offered through an IT platform that communicates with appointment software Employee Cost: $50 per visit Employee Paid Dental Insurance Staff recommends renewing with Delta Dental and increasing the tier structure from 2 tiers (employee only and family) to 4 tiers (employee only, employee + spouse, employee + children and family) since the dental insurance is bundled with the medical insurance. Please refer to the attached spreadsheet for tier rates. Employee Paid Vision Insurance Staff recommends renewing with Superior Vision with no price increase. Voluntary Employee Paid Benefits Staff recommends renewing with One America for optional, employee paid Short Term Disability coverage and Employee Paid Life Insurance with no price increase. Supplemental Benefits Paid by Employees Staff recommends to continue 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 Hospital Gap Insurance BUDGET/STAFF IMPACT: These planned insurance/benefit items will be included in the City's 2018 proposed budget. Attachments: f 2017 & 2018 Health Insurance Cost Comparison ■ 2018 Health Insurance Annualized Cost 1. 2017 & 2018 Health insurance Cost ComparisonI Traditional PPO - 1000 Deductible PPO Rate Tier Total Monthly Premium Monthly Employee Contribution Monthly Employee/ Employer Employer Cost - Contribution Share % 2017 Employee Only $466.14 $101.66 $364.48 21 81% / 78 19% 2017 Family $1,235.23 $443.56 $791.67 35.91%/6409% 2018 Emplo ee Only $559.361 $122.001 $437.36121.81% / 78 19% 2018 Employee + Spouse $1,219.641 $437.96 $781.68135,91% / 64 09% 2018 Employee + Child ren $1,127981 $361.541 $645.28135 91% / 64.09% 2018 Family _$1,006,821 $1,660-001 $596.101 $1,063.90135-91% / 64,09% Traditional PPO - 2000 Deductible PPO Rate Tier 2017 Employee Only$466.14 PPO Rate Tier Total Monthly Premium Monthly Employee Contribution Monthly Employer Contribution Employee/ Employer Cost - - Share % 2017 Employee Only $466.14 $101.66 $364.48 21.81%/78.19% 2017 Family $1,235.23 $443.56 $791.67 35.91% / 64 09% 2018 Employee Only $517.32 $112.82 $404.50 21.81% l 78.19% 2018 Employee + Spouse $1,127981 $405.061 $722.92135.91% / 64 09% 2018 Employee + Child(ren) $931-161 $334.381 $596.78135.91% / 64.09% 2018 Family 1 $1,535.26 $551.301 $983.9635.91%/64.09% Traditional PPO - 4000 Deductible PPO Rate Tier 2017 Employee Only$466.14 Total Monthly Premium Monthly Employee Contribution_ --$101.C6 Monthly Employee/ Employer Employer Cost - Contribution Share % $364.48 21 81%/ 78.19% 2017 Family $1,235.23 $443.56 $791.67 35 91%164 09% 2018 Employee Only $523.64 $114.20 $409.44 21 81% / 78 19% 2018 Employee + Spouse 1 $1,141.76 $410.021 $731.74135 91% 164 09% 2018 Employee + Child ren $942 54 $338.46' $604.08135 91 % 164 09% 2018 Family $1,554.02 $558.04 $995.98135-91% 16409% 2017 & 2018 Dental Hi h Deductible Health Plan - 3000 Deductible Plan Tier HDHP Rate Tier Total Monthly Premium Monthly Employee Contribution Monthly Employer Contribution Employee/ Employer Cost- Share % Employer's i Monthly Health Savings Account Contribution Total Employer Monthly Contribution (Premium + Health Savings Account Contribution) - 2017. Employee Only $24590 $21.32 $224.58 867%/9133% _ $70.80 $295.38 2017 Family $651.57 $62.62 $588.95 9 61% 190.39% $156.66 $745.61 2018 Emplo ee Only $29508 $25.581 $269.50 8 67% 191,33% 1 $70.80 $340.30 2018 Em to ee + Sp use $636.42 $61.161 $575.26 961%/9039% $106.66 $681.92 2018 Employee + Children) 1 $482.10 $46.321 $435.78 9 61% / 90.39% 1$132.50 $132.50 $568.28 2018 Famil $89370 $85.88 $807.82 9-61-/./ 90.39% 1 $156.66 $964.48 2017 & 2018 Dental Hi h Deductible Health Plan - 4000 Deductible Plan Tier HDHP Rate Tier Total Monthly Premium Monthly Employee Contribution Monthly Employer Contribution Employee/ Employer Cost- Share % Employer's Monthly Health Savings Account Contribution Total Employer Monthly Contribution (Premium + Health Savings Account Contribution) 2017 Employee Only $24590 $21.32 $224.58 867%/91 33% $70.80 $295.38 2017 Family $651.57 $62.62 $588.95 961%/9039% $156.66 $745.61 2018 Employee Only $27364 $23.72 $249.92 867%/91 33% $70.80 $320.72 2018 Employee + Spouse $590.18 $56.72 $533.46 9.61% / 90.39% $106.66 $640.12 2018 Employee + Child(ren) $44706 $42.96 $404.10' 9.61% / 90.39% $132.50 $53660 2018 Family $82876 $79.64 $749.12 9 61% 190 39% $156.66 $905.78 2017 & 2018 Dental Cost Comparison Plan Tier Employee Premium (per payroll) Employee Premium (per month) 2017 Employee Only $13 10 $26 20 2017 Family $44 27 $8854 2018 Employee Only $13.10 $26.20 2018 Employee + Spouse 1 $26.20 1 $52.40 2018 Employee + Child(ren) 1 $30 13 1 $602 2018 Family $46.75 1 $93.50 2018 Health Insurance Estimated Annualized Cost Annualized Calculations Based on 2017 Enrollment Current Employee Participants (Excludes COBRA and Retirees, since they pay 100% for their coverage) Current ANNUAL Cost to City at 2017 rates (Excluding Health Savings Account Contributions, which would not increase in 2018) ANNUAL Cost to City at 2018 rates based on Current 2017 Employee Participants and Plans (Excluding Health Savings Account Contributions) PPO Employee Only 84 $367,395.84 $440,858.88 PPO Employee + Spouse 9 - $84,421.44 PPO Employee + Child(ren) 4 - $30,973.44 PPO Family 24 $351,501.48 $306,403.20 HDHP Emloyee Only 238 $641,400.48 $769,692.00 HDHP Employee + Spouse 91 - $628,183.92 HDHP Employee + Child(ren) 45 - $235,321.20 HDHP Family 239 $2,650,275.00 $2,316,827.76 TOTAL 734 $4,010,572.80 $4,812,681.84 Additional Cost to City for 2015 $802,109.04