HomeMy WebLinkAbout25D - AGMT - INSURANCE RENEWALS
REQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY:
SEPTEMBER 3, 2013
TITLE: APPROVED
? As Recommended
EMPLOYEE GROUP INSURANCE ? As Amended
? Ordinance on 1" Reading
RENEWALS ? Ordinance on 2"d Reading
? Implementing Resolution
? Set Public Hearing For
CONTINUED TO
FILE NUMBER
MANAGER
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,
employee group life and accidental death and dismemberment insurance, subject to non-
substantive changes approved by the City Manager and City Attorney.
DISCUSSION
The City's employee group benefit policies, contracts and agreements are renewed annually on
January 1. Currently the City provides life and accidental death & dismemberment (AD&D)
coverage and long-term disability (LTD) insurance through Aetna for full-time employees. We are
currently in the third year of a three-year rate guarantee for the Life, AD&D and LTD rates through
December 31, 2014.
Life Insurance
Insurance Coverage Current Insurance Insurance Percent Change
Rate Renewal Rate
Life Insurance $0.102 per $1000 $0.102 per $1000 0.0%
Accidental Death & $0.020 per $1000 $0.020 per $1000 0.0%
Dismemberment
2501-1
Employee Group Insurance Renewals
September 3, 2013
Page 2
Long-Term Disability
Group Coverage Current Insurance Insurance Percent Change
Rate Renewal Rate
Management $0.352 per $100 $0.352 per $100 0.0%
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 Delta Dental and Safeguard is scheduled for renewal. Delta has agreed to
renew the contract for a period of one year with no rate increase. However, Safeguard rates will
increase by 2.3% and are guaranteed for a period of one year. This increase is directly related to
dependent children remaining covered on the insurance until age 26 under the Patient Protection
and Affordable Care Act.
Type of Coverage Cur e l Rate RaDelta Percent Change
Employee $48.39 $48.39 0.0%
Employee Plus Family $119.17 $119.17 0.0%
Type of Coverage Safeguard Dental Safeguard Dental Percent
Current Rate Rate 2014 Change
Employee $25.28 $25.86 2.3%
Employee Plus Family $43.22 $44.21 2.3%
25D-2
Employee Group Insurance Renewals
September 3, 2013
Page 3
CalPERS Health Program
The CalPERS basic HMO health plans will increase by 3.8% and the basic PPO health plans will
increase by 2.5%. The lower increase in rates are the result of successful negotiations with
existing and new health plan providers that incorporated CalPERS health initiatives to provide
quality health care to participants at the lowest possible cost. The City will incur a 7.84% increase
in costs for all bargaining units that are tied to the Kaiser rate for the City contribution. As the City
is currently in negotiations with SEIU and POA, the fiscal impact is based on the current 2013
contribution rates. The employees will be responsible for any increase in cost above the City
contribution.
Plan Employee Employee & one Employee & two or
Only Dependent more Dependents
(New Plan)
Anthem HMO Select $536.99 $1,073.98 $1,396.17
(New Plan)
Anthem HMO Traditional $592.20 $1,184.40 $1,539.72
Blue Shield Access+ HMO $543.21 $1086.42 $1412.35
Blue Shield NetValue HMO $457.17 $914.34 $1188.64
(New Plan)
Health Net Salud Mas HMO $489.82 $979.64 $1273.53
(New Plan)
Health Net SmartCare HMO $568.51 $1137.02 $1478.13
Kaiser HMO $602.79 $1205.58 $1567.25
(New Plan)
Sharp HMO $538.59 $1077.18 $1400.33
(New Plan)
UnitedHealthcare HMO $521.01 $1042.02 $1354.63
PERSCare PPO $992.61 $1985.22 $2580.79
PERSChoice PPO $611.30 $1222.60 $1589.38
PERSSelect PPO $446.49 $892.98 $1160.87
PORAC safet members $581.00 $1088.00 $1382.00
25D-3
Employee Group Insurance Renewals
September 3, 2013
Page 4
Employee Assistance Program - REACH Employee/Associate Assistance
The City is entering into the third year of a three-year rate guarantee with REACH Employee
Assistance Program. This plan 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, legal, marital and family problems are available.
Full time and Part time employees are eligible to participate in the Employee Assistance Program.
Retirees are not included in the annual cost estimates. The Police Officers Association maintains
their own insurance programs for medical, dental and 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 2013. The City is currently negotiating contribution amounts for insurances with the POA and
SEIU bargaining units. The amounts used to calculate the fiscal impact are based on the 2013
contribution rates for these two bargaining units.
Coverage for POA (Sworn and Non-Sworn)
CY 2013 CY 2014 Difference
Aetna Life/POA LTD Insurance $ 439,753 $ 413,712 $ - 26,041
POA Dental $ 574,560 $ 540,000 $ - 34,560
POA Medical $ 6,940,940 $ 7,075,320 $ 134,380
REACH (EAP Provider) $ 11,810 $ 11,100 $ - 710
Total Annual Cost $ 7,967,063 $ 8,040,132 $ 73,069
Coverage for SEIU, CASA, SAMA, EM, PMA & PTCS
CY 2013 CY 2014 Difference
Aetna Life/LTD Insurance $ 115,175 $ 114,316 $ - 859
Dental Carriers $ 339,307 $ 335,699 $ - 3,608
CaIPERS Medical $ 5,722,225 $ 5,595,732 $ - 126,493
REACH (EAP Provider) $ 18,071 $ 23,310 $ 5,239
Total Annual Cost $ 6,194,778 $ 6,069,057 $-125,721
2501-4
Employee Group Insurance Renewals
September 3, 2013
Page 5
Funds in the amount of $6,147,025 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 $7,998,489 are budgeted and available in the Employee
Benefits account (account no. 08109053-64010) to pay for the insurance coverage administered
by the Associations. The total budgeted amount of $14,135,515 is available in Fiscal Year 2013-
2014. The balance will be budgeted in Fiscal Year 2014-2015.
APPROVED AS TO FUNDS AND ACCOUNTS:
ward S. Raya Francisco Gutierrez
Executive Director Executive Director
Personnel Services Finance & Management Services Agency'
25D-5
25D-6