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HomeMy WebLinkAbout176-22 RESOLUTION113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 176-22 File Number: 2022-0629 2023 EMPLOYEE BENEFITS PACKAGE: A RESOLUTION TO APPROVE THE 2023 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 2023 employee benefits package as recommended in the staff memorandum attached to this Resolution. PASSED and APPROVED on 8/2/2022 Approyied: ►►►t1tiru11111 Attest: .�`��t�c-�'J' TRs'f�. ►�G; 1AY C.r'.G�': F AYLTTEViLLE; Kara Paxton, City Clerk Treasurer '•: rs':�. A-AN`'P.�'S �'� f`�'�y;N► 0 Page 1 Printed on 8/3/22 City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, AR 72701 (479)575-8323 Text File File Number: 2022-0629 Agenda Date: 8/2/2022 Version: 1 Status: Passed In Control: City Council Meetinq File Type: Resolution Agenda Number: C.2 2023 EMPLOYEE BENEFITS PACKAGE: A RESOLUTION TO APPROVE THE 2023 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 2023 employee benefits package as recommended in the staff memorandum attached to this Resolution. City of Fayetteville, Arkansas Page 1 Printed on 81312022 Missy Cole Submitted By City of Fayetteville Staff Review Form 2022-0629 Legistar File ID 8/2/2022 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 7/15/2022 HUMAN RESOURCES (120) Submitted Date Division / Department Action Recommendation: Staff recommends City Council approve the 2023 employee benefits renewals as proposed in the staff memo. Budget Impact: Citywide Citywide Account Number Fund Project Number Project Title Budgeted Item? Yes Current Budget $ 6,662,368.00 Funds Obligated $ 3,224,907.34 Current Balance 3,437,460.66 Does item have a cost? No Item Cost $ - Budget Adjustment Attached? No Budget Adjustment $ - Remaining Budget 3,437,460.66 V20210527 Purchase Order Number: Previous Ordinance or Resolution # Change Order Number: Approval Date: Original Contract Number: Comments: CITY OF FAYETTEVILLE ARKANSAS MEETING OF AUGUST 2, 2022 TO: Mayor and City Council THRU: Susan Norton, Chief of Staff FROM: Missy Cole, HR Director DATE: July 12, 2022 SUBJECT: 2023 Employee Benefits Renewal CITY COUNCIL MEMO RECOMMENDATION: Staff recommends Council approve the employee benefits package for 2023 as outlined below and in the attached documents. BACKGROUND: Staff and Gallagher Benefit Services, the City's benefits broker, have reviewed the annual renewals for employee insurance plans. Employee benefits renewals are brought forward at this time to ensure the annual open enrollment may proceed according to schedule. DISCUSSION: Health Insurance The one year look back period of the City's health claims shows a 131.3% utilization rate of claims paid versus premiums paid. Under the City's current renewal rate guarantee with Arkansas Blue Cross Blue Shield, the utilization rate would result in a 19.8% premium increase for 2023 for the City's medical plans. Blue Cross Blue Shield has offered to reduce the premium increase to 16.8% if the City will move vision vendors from Superior Vision to VSP, BCBS's preferred provider. Staff reviewed the plan designs and geographical coverage map of VSP and recommends a move to VSP for vision coverage to help mitigate the health premium increase and to provide more vision coverage options to employees. Staff also recommends renewing the health plan with the same plan design and same cost sharing percentages for 2023. Employee Paid Vision Insurance Staff recommends moving to VSP and offering employees two plan design options. Rates are guaranteed for 3 years. The Base Plan (Silver II) is like the current plan design offered by the City. The Buy -Up Plan (Gold II) is a new option for employees to choose if they are interested in enhanced vision benefits. Employee Paid Dental Insurance The one year look back period shows the loss ratio for the City's dental claims at 85.55%, which results in a 4.5% increase to rates for 2023. Staff recommends renewing with Delta Dental. Mailing Address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 City Paid Life and LTD Benefits OneAmerica has provided a rate hold on Employer Paid Basic Life and Employer Paid LTD products for 2023. Staff recommends renewing with OneAmerica for the same benefit coverage and current rates. Flexible Spending Accounts Staff recommends American Fidelity continue as the administrator of Flexible Spending Accounts with no cost for services. Health Saving Accounts Staff recommends First Security Bank continue as the administrator of Health Savings Accounts with no cost for services. COBRA Staff recommends Consolidated Admin Services (CAS) continue as the administrator of COBRA services. Voluntary Employee Paid Benefits OneAmerica has provided a rate hold for 2023 on employee paid Short Term Disability and Employee Paid Life Insurance. Staff recommends renewing with OneAmerica for these products. Supplemental Benefits Paid by Employees Staff recommends continuing to offer additional supplemental benefits to employees through American Fidelity which include: Disability Income Insurance, Accident Only Insurance, Cancer Insurance, Critical Illness Insurance, Life Insurance, AF Term Life Insurance, AF Permanent Life Insurance and Hospital Gap Insurance. BUDGET/STAFF IMPACT: The costs of these planned insurance/benefit items are being budgeted in the City's 2023 budget. Attachments: Health Plan Costs 2023 vs. 2022 Employee Paid Dental and Vision Premiums 2023 vs. 2022 Health Plan Costs 2023 vs. 2022 HEALTH PLAN MONTHLY COSTS 2023 VS. 2022 PPO Plan Rate Tier Total Monthly Premium 2022 Total Monthly Premium 2023 Monthly Employee Contribution 2022 Monthly Employee Contribution 2023 Monthly Employer Contribution 2022 Monthly Employer Contribution 2023 Employee/ Employer Cost -Share % Employee Only $719.14 $ 839.96 $1,568.081 $ 1,831.52 $183.30 $214.10 $691.40 $570.72 $941.02 $535.84 $625.86 $1,140.12 25.49%/74.51% Employee + Spouse $591.94 $976.14 37.75%/62.25% Employee + Child(ren) $1,294.421 $ 1,511.88 $488.64 $805.78 $941.16 37.75%/62.25% Family $2,134.221 $ 2,492.76 $805.66 $1,328.56 $1,551.74 37.75%/62.25% High Deductible Health Plan Rate Tier Total Monthly Premium 2022 Total Monthly Premium 2023 Monthly Employee Contribution 2022 Monthly Employee Contribution 2023 Monthly Employer Contribution 2022 Monthly Employer Contribution 2023 Employee/ Employer Cost -Share % Employee Only $374.16 $437.02 $942.52 $ 52.60 $61.44 $321.56 $375.58 14.06%/85.94% Employee + Spouse $806.96 $ 120.08 $140.24 $686.88 $802.28 14.88%/85.12% Employee + Child(ren) $611.28 $713.98 $ 90.96 $106.24 $520.32 $607.74 14.88%/85.12% Family $1,133.18 $1,323.54 $ 168.62 $196.94 $964.56 $1,126.6014.88%/85.12% Employee Paid Dental and Vision Premiums 2023 vs. 2022 Dental Premium 2023 vs. 2022 Plan Tier 2022 Employee Monthly Premium 2023 Employee Monthly Premium Employee Only $27.50 $28.74 Employee + Spouse $54.98 $57.46 Employee + Child(ren) $63.24 $66.10 Family $98.10 $102.52 Vision Premiums 2023 vs. 2022 Plan Tier 2022 Employee Monthly Premium 2023 Employee Monthly Premium (Silver II Plan) 2023 Employee Monthly Premium (Gold II Plan) Employee Only $6.54 $6.00 $7.72 Employee + Spouse $12.68 $11.96 $15.40 Employee + Child(ren) $12.68 $12.80 $16.48 Family $18.66 $20.46 $26.34 CITY OF FAYETTEVILLE ARKANSAS Renewal Analysis and Process Gallagher Benefit Services 1 7/2022 Gallagher Risk Management I Consulting © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM Overview Medical-BCBS Original renewal 19.8% • Bundled with Vision 16.8% 2021 loss ratio is 131 % 2022 YTD is 124% Vision -Move to VSP Choice of 2 plans (Silver and Gold) Dental -Delta Dental Renew with no changes at 4.5% increase Gallagher Insurance Risk Management I Consulting F_ Life & Disability -One America Renew with no changes FSA-American Fidelity Continue with Administrator HSA-First Security Bank Continue with Administrator COBRA -CAS Continue with Administrator Voluntary Benefits -One America Renew with no changes Voluntary Benefits -American Fidelity Renew with no changes `a © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM Historical Lookback 2016 6.4% 2017 5.6% 2018 20% 2019 15% 2020 0% 2021 6% 2022 16.8% Gallagher Insurance Risk Management Consulting 5/1/15 — 4/30/16 $4,322,202 $4,216,666 102.5% 5/1/16 — 4/30/17 $4,576,036 $4,513,431 101.4% 5/1/17 — 4/30/18 $4,713,036 $4,913,154 95.3% 5/1/18 — 4/30/19 $4,831,586 $5,757,503 83.9% 5/1/19 — 4/30/20 $5,455,647 $6,274,795 86.9% 5/1/20 — 4/30/21 $5,719,772 $6,270,906 91.2% 5/1 /21 - 4/30/22 $7,289,359 $6,248,761 116.7% Totals $36,907,638 $38,195,216 96.6% © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM Medical Plan — BCBS of Arkansas Gallagher Insurance Risk Management I Consulting Deducdblc $1,OOOJ$2,000 $3,OON$2,Cd0 3,04415�i,000 55,00[71512,00[] i, irti�IMItlW�4'f8frkiF�+j C 0i11mranrr A4&XiUM1H 51,00054,000 53,OONiRb,U[74 $[X+3o Unlimited idW�UfBmlFy1 out-of-PhArt Ntwdmnm 53,40015b,C0❑ S4,bOb!$A.CdO S3,Ot1Q+ fi,000 Unlimited ,i �diMidWa4'famlyl [_ifodmic Biuimum Untimirted Primmer}' {art Dffi€e Visits 20% 40% U&C 0% 2D% U&C alter deductible alter deductible attar dMucbble after dedu&jbie Spec6ha Office Visits 20% 40% U&C 0% 2D% U&C alter deductible alter deductible after di ducbble after dWuibb1L% Ha spitalix-chno _ Impstirm 20% 40% U&C 0% 20% U&C alter daduttible altar daduttibla after CMUChtle after cMutbbbe 20% 40% U&C ft 20% U&C — Outpatient alter doductible after deductible after daductible alter deductible Lnergericy Ream 20% 0% after deductible after deductible urgene Cam 20% 40% U&C 0% 20% U&C after deductible after deductible after deductible after daduttltlle Preventive S�vio�s ❑�' 2ft U&C _ 20% U&C alter deductible akor daducbW Prescriptiao Dmp $101$4QF$611$150 Plot cmred 0% Not mverad after deductible 4 © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM Medical Rate Comparison HEALTH PLAN MONTHLY COSTS 2023 VS. 2022 Gallagher Insurance Risk Management I Consulting PPO Plan Rate Tier Enroll Total Monthly Premium 2022 Total Monthly Premium 2023 Monthly Employee Contribution 2022 Monthly Employee Contribution 2023 Monthly Employer Contribution 2022 Monthly Employer Contribution 2023 Employee/ Employer Cost Share % Employee Only 45 $719.14 $ 839.96 $1,568.08 $ 1,831.52 $183.30 $214.10 $691.40 $535.84 $625.86 $1,140.12 $941.16 25.49%/74.51% Employee + Spouse 6 $591.94 $976.14 $805.78 37.75%/62.25% Employee + Child ren 3 $1,294.421 $ 1,511.88 $488.64 _ $570.72 37.75%/62.25% Family 3 $2,134.221 $ 2,492.76 $52,056 $60,801 $805.66 $15,683 $941.02 $1,328.56 $1,551.74 37.75%/62.25% Total Monthly 57 $18,318 $36,373 $42,483 Total Annual $624,6681 $729,6151 $188,1961 $219,8171 $436,4721 $509,797 High Deductible Health Plan Rate Tier Total Monthly Premium 2022 Total Monthly Premium 2023 Monthly Employee Contribution 2022 Monthly Employee Contribution 2023 Monthly Employer Contribution 2022 Monthly Employer Contribution 2023 Employee/ Employer Cost Share % Employee Only 316 $374.16 $437.02 $942.52 $713.98 $ 52.60 $61.44 $321.56 $375.58 14.06%/85.94% Employee + Spouse 89 $806.96 $ 120.08 $140.24 $686.88 $802.28 14.88%/85.12% Employee + Child ren 65 $611.28 $ 90.96 $106.24 $520.32 $607.74 14.88%/85.12% Family 225 $1,133.18 $1,323.54 $566,188 $ 168.62 $196.94 $964.56 $1,126.6014.88%/85.12% Total Monthly 695 $484,753 $71,161 $83,114 $413,592 $483,074 Total Annual $5,817,0321 $6,794,2541 $853,9271 $997,3621 $4,963,1051 $5,796,892 TOTAL 1 7521 $6,441,7011 $7,523,8681 $1,042,1241 $1,217,1791 $5,399,5771 $6,306,689 Chanae I 1 1 16.8%1 1 16.8%1 1 16.8% © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM City HSA Contributions Gallagher Insurance Risk Management Consulting City of Fayetteville HSA Contributions for HDHP HSA Engagement Contributions Plan Tier Partici ation Plan Type(per City's Contribution payroll) City's Contribution (per month City's Contribution annual Employee's Maximum Annual Contribution* Current IRS MAX Annual Contribution EE Participant $35.40 $70.80 $849.60 $2,800.40 $3,650.00 EE Non -Participant $30.98 $61.96 $743.52 $2,906.48 $3,650.00 ES Participants (EE + Souse) $53.33 $106.66 $1,279.92 $6,020.08 $7,300.00 ES 1 Participant $46.67 $93.34 $1,120.08 $6,179.92 $7,300.00 ES Non -Participants $40.00 $80.00 $960.00 $6,340.00 $7,300.00 EC Partici ant EE $66.25 $132.50 $1,590.00 $5,710.00 $7,300.00 EC Non -Participant $57.97 $115.94 $1,391.28 $5,908.72 $7,300.00 Family Participants (EE + Souse) $78.33 $156.66 $1,879.92 $5,420.08 $7,300.00 Family 1 Participant $68.54 $137.08 $1,644.96 $5,655.04 $7,300.00 Family Non -Participants $58.75 $117.50 $1,410.00 $5,890.00 $7,300.00 © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM Dental Plan Delta Dental of Arkansas r Promicir A.anuall Deducible (only applies to basic, major and $5M150 $50}$150 arthodontie services) Annual Benefit Maximum $1,500 $1,500 Preventirr Dental Services 100% 90% (-::ewwgs, exams- x-rays) 80% 7 % Basic Dental Serviaca (N',ings- rant canal mempy. oral surgery) _. Major Dmtal Services (&tractians- crowns- an lays. onlaYsr 50 45% bridges- deg;tures, repairs) 45% Orthodontic Senicm 50% 1, 7 (depwnx cn;ldren under age 191 Monthly Rates 2023 Employee $28.74 Em la ee+ Spouse $57.46 Employee+ Child(rein) $66.10 Family $102.52 Gallagher Insurance Risk Management Consulting © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM Vision-VSP Plan Options Vision Vision Frequency Co -Pay Exam/Materials In Network Frames/Contact Lens Allowance Vision Network Contribution Vision Vision Frequency Co -Pay Exam/Materials In Network Frames/Contact Lens Allowance Vision Network Contribution Current-SuperiorVisio VSP Silver11 12/12124 12/12124 $10/$15 t $10/$15 $100(afer $15 $130 (lenses and copay(/$130 Frames Superior VSP Voluntary Voluntary Current-SuperiorVisi❑ VSP Gold II 12/ 12/ 24 12/ 12/ 12 $1Q/$15 t $11? $1CD(afer$15 copay(/$134 $150 Superior VSP Voluntary Volunta Gallagher Insurance Risk Management I Consulting Monthly Rates VSP Silver 11 2023 Employee $6.00 Employee + Spouse $11.96 Employee + Child $12.80 Family $20.46 VSP Gold 11 Employee $7.72 Employee +Spouse $15.40 Employee +Child $16.48 1FamHy $26.34 2023 s © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM Thank You! G-) Gallagher Insurance Risk Management I Consulting © 2020 ARTHUR J. GALLAGHER & CO. I AJG.COM