HomeMy WebLinkAbout25K - EMPLOYEE INS RENEWALS
CITY COUNCIL MEETING DATE:
REQUEST FOR
COUNCIL ACTION
CLERK OF COUNCIL USE ONLY:
AUGUST 18, 2008
TITLE:
EMPLOYEE GROUP INSURANCE
RENEWALS
APPROVED
o As Recommended
o As Amended
o Ordinance on 151 Reading
o Ordinance on 2nd Reading
o Implementing Resolution
o Set Public Hearing For
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CITY MANAGER
CONTINUED TO
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FILE NUMBER
RECOMMENDED ACTION
Authorize the City Attorney to prepare and authorize the City Manager and
Clerk of the Council to execute agreements for long term disability,
medical, dental, vision, employee assistance and supplemental employee
group life and accidental death & dismemberment insurance.
DISCUSSION
The City's employee group benefit policies, contracts and agreements are
renewed annually on January 1. Currently we provide life and accidental
death & dismemberment (AD&D) coverage and long term disability (LTD)
insurance through AIG Life Insurance Company for full-time employees. We
are currently in the second year of a two year rate guarantee for our
life insurance agreement with AIG. AIG has agreed to a rate pass on the
current LTD and AD&D insurance plan rates through December 31, 2009.
Life Insurance
Insurance Current Insurance Percent Change
Coverage Insurance Rate Renewal Rate
Life Insurance $0.15 per $1000 $0.15 per $1000 0.0%
Accidental Death $0.03 per $1000 $0.03 per $1000 0.0%
& Dismemberment
25K-1
Employee Group Insurance Renewals
August 18, 2008
Page 2
Long-Term Disability
Group Coverage Current Insurance Percent Change
Insurance Rate Renewal Rate
Management $0.78 per $100 $0.78 per $100 0.0%
Employees $10.39 $10.39 0.0%
130 day wait
Employees $15.93 $15.93 0.0%
60 day wait
Dental Plans
We are currently in the final year of a two year contract with Delta
Dental and the final year of a three year contract with Safeguard Dental.
However the contract with United Healthcare Dental is up for renewal and
these rates will decrease approximately 2% for employee only coverage and
approximately 10% for family coverage and are guaranteed for a period of
one year.
Type of Coverage United HealthCare United HealthCare Percent Change
Current Rate Rate 2009
Employee $26.99 $26.48 -1.9%
Employee Plus $58.03 $52.96 -9.6%
Family
CalPERS Health Program
The CalPERS Health Program medical rates will result in an overall
premium increase of 4.3 percent for its entire health care package of
plans. This increase is 2.3 percent lower than the overall 2008 rate
increase and the smallest increase in a decade. There are no changes
being made to benefits or co-payments. Basic premiums for Kaiser will
increase by 8.2 percent, while the PPO rates will decline slightly. The
rates fall well below national projections of nearly 10 percent for 2009
medical costs.
25K-2
Employee Group Insurance Renewals
August 18, 2008
Page 3
Plan Employee Employee & one Employee & two or
Only Dependent more Dependents
Blue Shield Access+ HMO $471.18 $942.36 $1225.07
Blue Shield NetValue $416.49 $832.98 $1082.87
Kaiser $425.11 $850.22 $1105.29
PERSCare $712.71 $1425.42 $1853.05
PERSChoice $458.59 $ 917.18 $1192.33
PERSSelect $430.72 $861.44 $1119.87
PORAC(safety members) $484.00 $906.00 $1151.00
Employee Assistance Program - REACH Employee/Associate Assistance
The Employee Assistance Program assists employees and their eligible
dependents in handling problems that may be interfering with their
performance on the job. Consultation for problems such as alcohol and
drug abuse, marital and family problems are available. REACH currently
provides services under this program. The terms of the contract will
remain the same. The current fee is $1.85 per employee per month based
on 1,740 employees. REACH has agreed to renew this contract for a three
year period with no increase in fees and a reduced head count of 1,550
employees.
Retirees are not included in the annual cost estimates. In addition, the
Police Officers Association is not included in the medical, dental or LTD
projections and the Firemen's Benevolent Association is not included in
the LTD projections, since they maintain their own insurance programs.
FISCAL IMPACT
The annual cost of each plan may vary depending on changes in the number
of employees enrolled during the year. The proj ected annual costs are
calculated using current enrollment as of July 2008.
AIG Life/LTD Insurance Co.
Dental Carriers
CalPERS Medical
REACH (EAP Provider)
Total Annual Cost
2008
$ 279,308
$ 763,402
$ 9,362,128
$ 41,803
$10,446,641
2009
$ 300,548
$ 760,931
$ 9,773,436
$ 34,410
$10,869,325
Difference
$ 21,240
-$ 2,471
$ 411,308
-$ 7,393
$ 422,684
25K-3
Employee Group Insurance Renewals
August 18, 2008
Page 4
Funds in the amount of $10,869,325 are budgeted and available in the
Personnel Services Employee Benefits account (account no. 81-177-6521).
APPROVED AS TO FUNDS AND ACCOUNTS:
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Executive Director
Personnel Services
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Francisco Gutierrez ~
Executive Director
Finance & Management Services Agency
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25K-4