HomeMy WebLinkAbout207-20 RESOLUTION113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 207-20
File Number: 2020-0592
2021 EMPLOYEE BENEFITS PACKAGE:
A RESOLUTION TO APPROVE THE 2021 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 2021
employee benefits package as recommended in the staff memorandum attached to this Resolution.
PASSED and APPROVED on 8/4/2020
Attest: K
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Kara Paxton, City Clerk Treasurer
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Page 1 Printed on 8/5/20
City of Fayetteville, Arkansas 113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Text File
=-� File Number: 2020-0592
Agenda Date: 8/4/2020 Version: 1 Status: Passed
In Control: City Council Meetinq File Type: Resolution
Agenda Number: C. 4
2021 EMPLOYEE BENEFITS PACKAGE:
A RESOLUTION TO APPROVE THE 2021 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 2021 employee
benefits package as recommended in the staff memorandum attached to this Resolution.
City of Fayetteville, Arkansas Page 1 Printed on 81512020
Missy Cole
Submitted By
City of Fayetteville Staff Review Form
2020-0592
Legistar File ID
8/4/2020
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
7/14/2020 HUMAN RESOURCES (120)
Submitted Date Division / Department
Action Recommendation:
Staff recommends Council approve the 2021 employee benefits renewals as proposed in the staff memo.
xxxx.xxx.xxxx-5108.xx
Account Number
Project Number
Budgeted Item? Yes
Does item have a cost? NA
Budget Adjustment Attached? No
Purchase Order Number:
Change Order Number:
Original Contract Number:
Comments:
Budget Impact:
Current Budget
Funds Obligated
Current Balance
Item Cost
Budget Adjustment
Remaining Budget
Citywide
Fund
Project Title
$ 6,020,340.00
$ 3,155,722.00
2,864,618.00
Previous Ordinance or Resolution #
Approval Date:
2,864,618.00
V20180321
CITY OF
eft FAYETTEVILLE
ARKANSAS
MEETING OF AUGUST 4, 2020
TO: Mayor and City Council
THRU: Susan Norton, Chief of Staff
FROM: Missy Cole, HR Director
DATE: July 14, 2020
SUBJECT: 2021 Employee Benefits Renewals
CITY COUNCIL MEMO
RECOMMENDATION:
Staff recommends Council approve the employee benefits package for 2021 as outlined below
and in the attached documents.
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 at this
time to ensure the annual open enrollment may proceed according to schedule.
Health Insurance
The one year look back period of the City's health claims shows an 86.9% utilization rate of
claims paid versus premiums paid. Under the City's current renewal rate guarantee with
Arkansas Blue Cross Blue Shield, this utilization rate results in a 6% premium increase for 2021.
Staff and the broker have reviewed the structures and utilization of the City's current offerings of
two HSA-compliant, high deductible plans and three PPO plans of various deductibles and
recommend consolidating offerings to one HSA 3000 high deductible plan and one PPO 1000
low deductible plan. These plans are currently utilized by 98.2% of City employees who elect
health insurance.
To mitigate the premium increase, Staff recommends restructuring both plans. Restructuring
the HSA 3000 plan Out of Network, out-of-pocket costs from unlimited to include a maximum
cap of $12,000 individual and $24,000 family will reduce the premium increase from 6% to 4%
for 2021. Restructuring the PPO plan to include a prescription copay change will reduce the
premium increase from 6% to 5.5% for 2021.
Current Copay
Proposed Copay
Generic
$10
$10
Preferred Brand
$30
$40
Non -Preferred Brand
$50
$60
Specialty Drug
$50
$150
Mailing Address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
Please refer to the attached document for the recommended 2021 tier rates which reflect the
premium increases and assume current cost sharing percentages between employer and
employee.
Staff and the broker recommend renewing with Arkansas Blue Cross Blue Shield for 2021 with
the proposed plan structure changes and premium increases of 4% to the HSA 3000 plan and
5.5% to the PPO 1000 plan, maintaining current cost sharing percentages between employer
and employee.
COBRA
Staff recommends renewing with WageWorks as the administrator for COBRA/Retirees billing
and administration.
City Paid Life and LTD Benefits
As part of the City's benefit broker due diligence, Gallagher conducted a market analysis of the
City's Life, Voluntary Life, Long -Term Disability and Short Term -Disability programs. Bids were
requested from Sun Life, Reliance Standard, Blue Cross Blue Shield of Arkansas (administered
by USAble Life) and Cigna. Bids were analyzed for comparable benefits, coverages and rates.
The final analysis reflected no compelling argument to make a change in carriers for the 2021
calendar year.
Staff recommends renewing with OneAmerica for the same benefit coverage and current rates.
The City received a one-year rate hold on all Life/Disability products administered by
OneAmerica.
Flexible Spending 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 Dental Insurance
Staff recommends renewing with Delta Dental. The renewal includes a 3% decrease in rates
with a two-year rate guarantee. Staff recommends unbundling the Health and Dental plans to
allow employees more control of their health care dollars.
Please refer to the attached document for tier rates.
Employee Paid Vision Insurance
Staff recommends Superior Vision continue with no price increase. Superior Vision will provide
a four-year rate hold.
Voluntary Employee Paid Benefits
Staff recommends continuing to offer optional, employee paid Short Term Disability coverage
and Employee Paid Life Insurance through OneAmerica with no price increase and a one-year
rate hold.
Supplemental Benefits Paid by Employees
Staff recommends continuing to offer 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:
The costs of these planned insurance/benefit items are being budgeted in the City's 2021
budget.
Attachments:
• 2021 Health Insurance Cost
• 2020 to 2021 Dental Cost Comparison
Traditional PPO - 1000 Deductible
PPO Rate Tier
Total Monthly
Premium
Monthly Employee Contribution
Monthly Employer
Contribution
Employee/ Employer
Cost -Share %
2021 Employee Only
678.44
$172.92
$505.52
25.49%/74.51%
2021 Employee + Spouse
1479.32
$558.44
$920.88
37.75%/62.25%
2021 Employee + Child(ren)
1221.16
$460.98
$760.18
37.75%/62.25%
2021 Family
2013.421
$760.061
$1,253.36
37.75%/62.25%
High Deductible Health Plan - 3000 Deductible
PPO Rate Tier
Total Monthly
Premium
Monthly Employee Contribution
Monthly Employer
Contribution
Employee/ Employer
Cost -Share %
2021 Employee Only
352.98
$49.62
$303.36
14.06%/85.94%
2021 Employee + Spouse
761.28
$113.26
$648.02
14.88%/85.12%
2021 Employee + Child(ren)
576.68
$85.80
$490.88
14.88%/85.12%
2021 Family
1 1069.041
$159.041
$910.00
14.88%/85.12%
2021 Health Insurance Annualized City Cost
ANNUALIZED CALCULATIONS BASED ON JUNE 2020 Enrollment Excluding
HSA Contributions
Current Employee
Participants
Projected 2021 Cost to City
Retaining Employee/Employer Cost
Share Percentage from 2020
PPO 1000 Employee Only
36
$218,384.64
PPO 1000 Employee + Spouse
6
$66,303.36
PPO 1000 Employee + Child(ren)
2
$18,244.32
PPO 1000 Family
5
$75,201.60
HDHP 3000 Employee Only
252
$917,360.64
HDHP 3000 Employee + Spouse
91
$707,637.84
HDHP 3000 Employee + Child(ren)
55
$323,980.80
HDHP 3000 Family
239
$2.609,880.00
TOTAL
686
$4,936,993.20
2020 & 2021 Dental Cost Comparison
Employee Premium Employee Premium
Plan Tier (per payroll) (per month)
2020 Employee Only
$14.18
$28.36
2020 Employee + Spouse
$28.34
$56.68
2020 Employee + Child(ren)
$32.60
$65.20
2020 Family
$50.57
$101.14
2021 Employee Only
$13.47
$26.94
2021 Employee + Spouse
$26.92
$53.84
2021 Employee + Child(ren)
$30.97
$61.94
2021 Family
$48.04
$96.08