HomeMy WebLinkAbout25A - AGMT - EMPLOYEE INSURANCE RENEWALSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
OCTOBER 3, 2011
TITLE:
EMPLOYEE GROUP INSURANCE
RENEWALS
1
al
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 1" Reading
? Ordinance on 2nd Reading
? Implementing Resolution
? Set Public Hearing For_
CONTINUED TO
FILE NUMBER
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,
employee group life and accidental death and dismemberment insurance.
DISCUSSION
The City's employee group benefit policies, contracts and agreements are renewed annually on
January 1. This year the City will contract with a new provider for employee group life, accidental
death & dismemberment, long-term disability, and renew contracts with the current providers for
employee assistance, dental and flexible spending plans.
Life and Accidental Death & Dismemberment and
Long-Term Disability
Currently the City provides life and accidental death & dismemberment (AD&D) coverage and
long-term disability (LTD) insurance through AIG Life Insurance Company for full-time employees.
Bids were solicited for life, AD&D and LTD providers to ensure that the renewal rates from our
current provider were competitive based on the current market. As a result of the bid process,
Aetna was selected to provide life, AD&D and LTD coverage effective January 1, 2012. This
selection reflects a combined decrease in premiums of 14.0% (while maintaining an identical
benefit structure to our current plan).
Aetna has agreed to a three-year rate guarantee for the Life, AD&D and LTD rates through
December 31, 2014.
25A-1
Employee Group Insurance Renewals
October 3, 2011
Page 2
Life Insurance
Insurance Coverage Current Insurance Insurance Percent Change
Rate Renewal Rate
Life Insurance $0.10 per $1000 $0.102 per $1000 2.0%
Accidental Death & $0.0285 per $1000 $0.020 per $1000 -29.8%
Dismemberment
Long-Term Disability
Group Coverage Current Insurance Insurance Percent Change
Rate Renewal Rate
Management $0.57 per $100 $0.352 per $100 -38.2%
Employees $8.78 $8.78 0.0%
130 day wait
Employees $15.93 $15.93 0.0%
60 day wait
Dental Plans
The contract with Safeguard is up for renewal. Safeguard has agreed to renew our contract for a
period of one year with no rate increase. We are currently in the second year of a two-year
contract with Delta Dental, and there will be no rate increase.
Type of Coverage Safeguard Dental
Current Rate Safeguard Dental
Rate 2012 Percent
Change
Employee $25.28 $25.28 0.0%
Employee Plus Family $43.22 $43.22 0.0%
25A-2
Employee Group Insurance Renewals
October 3, 2011
Page 3
Type of Coverage Cur e l Rate
nt RaDelta
2012 Percent Change
Employee $48.39 $48.39 0.0%
Employee Plus Family $119.17 $119.17 0.0%
CalPERS Health Program
The CalPERS basic HMO health plans will increase by 5.3% and the basic PPO health plans will
increase by 3.0%. The increase reflects higher costs anticipated for hospital, medical and
prescription drug use next year. The City will incur a 7.28% increase in costs because the City's
contribution toward medical is tied to the Kaiser rate. The employees will pick up any increase in
cost above the Kaiser rate.
Plan Employee
Only Employee & one
Dependent Employee & two or
more Dependents
Blue Shield Access+ HMO $583.60 $1167.20 $1517.36
Blue Shield NetValue $501.93 $1003.86 $1305.02
Kaiser $512.76 $1025.52 $1333.18
PERSCare $943.26 $1886.52 $2452.48
PERSChoice $526.19 $1052.38 $1368.09
PERSSelect $446.68 $893.36 $1161.37
PORAC safet members $527.00 $987.00 $1254.00
25A-3
Employee Group Insurance Renewals
October 3, 2011
Page 4
Employee Assistance Program - REACH Employee/Associate Assistance
The Employee Assistance Program (EAP) 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. Bids were solicited for a new EAP provider to
ensure that the rates from REACH continue to be competitive based on the current market. The
service level from REACH has been superior and the contract will be renewed with REACH. The
terms of the contract will remain the same. The current fee is $1.85 per employee per month
based on 1,550 employees. REACH has agreed to renew this contract for a three year period with
no increase.
Retirees are not included in the annual cost estimates. The Police Officers Association maintains
their own insurance programs for medical, dental and LTD coverage. The Firemen's Benevolent
Association maintains their own insurance program for LTD coverage.
FISCAL IMPACT
The annual cost of each plan may vary depending on changes in the number of employees
enrolled during the year. The projected annual costs are calculated using current enrollment as of
July 2011.
Coverage for POA (Sworn and Non-Sworn)
2011 2012 Difference
Aetna Life/POA LTD Insurance $ 455,730 $ 439,753 $ - 15,977
POA Dental $ 594,000 $ 574,560 $ - 19,440
POA Medical $ 6,688,836 $ 6,940,940 $ 252,104
REACH (EAP Provider) $ 12,210 $ 11,810 $ - 400
Total Annual Cost $ 7,750,776 $ 7,967,063 $ 216,287
Coverage for FBA (Sworn and Non-Sworn)
2011 2012 Difference
Aetna Life/FBA LTD Insurance $ 153,922 $ 152,853 $ - 1,069
Dental Carriers $ 154,857 $ 158,374 $ 3,517
CalPERS Medical $ 2,570,016 $ 2,752,991 $ 182,975
REACH (EAP Provider) $ 4,551 $ 4,529 $ - 22
Total Annual Cost $ 2,883,346 $ 3,068,747 $ 185,401
25A-4
Employee Group Insurance Renewals
October 3, 2011
Page 5
Coverage for SEIU, CASA, SAMA, EM, FMA, PMA & PTCS
2011 2012
Aetna Life/LTD Insurance $ 164,339 $ 131,594
Dental Carriers $ 404,487 $ 375,038
CalPERS Medical $ 6,452,107 $ 6,455,785
REACH (EAP Provider) $ 17,649 $ 18,071
Total Annual Cost $ 7,038,582 $ 6,980,488
Difference
$ - 32,745
$ - 29,449
$ 3,678
$ 422
$ - 58,094
Funds in the amount of $4,964,871 are budgeted and available in the Personnel Services
Employee Benefits account (account no. 08109053-64010) to pay for City Administered insurance
coverage. Funds in the amount of $4,043,278 are budgeted and available in the Employee
Benefits account (account no. 08109053-64010) to pay for the Association Administered insurance
coverage. Total budgeted amount is $9,008,149 available in Fiscal Year 2011-2012. The balance
to be budgeted in Fiscal Year 2012-2013.
APPROVED AS TO FUNDS AND ACCOUNTS:
hoj-eon!rn_?
athie S. Gonz lez
Executive Director
Personnel Services
Francisco Gutierrez
Executive Director
Finance & Management Services Agency
25A-5
25A-6