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CL-2206 Work Session   Item #: A.       
Meeting Date: 10/01/2019  
Subject:    Review of Employee and Retiree Benefit Changes for 2020
From: Sara Weller

COUNCIL ACTION
Work Session Meeting:     10/01/2019
SUMMARY
The City’s benefit package is reviewed annually in preparation for the upcoming plan year.  OneDigital, the City’s benefit advising firm, will present a summary of benefit and premium changes for the 2020 calendar year to Council at the October 1, 2019 Work Session.
 
BACKGROUND
The City’s goal is to maintain a high quality benefit package that provides employees with options to select coverage best suiting their needs.  Active employee and retiree benefits are reviewed annually to determine appropriate plan design changes and premium amounts for the next calendar year.  OneDigital assists the City with these decisions by conducting a thorough analysis of each benefit plan and making recommendations. The financial impact benefit offerings have on the City's budget, active City and Constitutional employees, and retirees, are taken into consideration to the extent possible.  Of all the benefits the City offers, the health insurance benefit requires the most attention due to evolving coverage requirements and persistent cost increases, which pose a continual challenge to the City's budget, as well as employee and retiree budgets.
 
The City administers a self-insured health plan for employees and retirees under which the actual claims for health care benefits and prescription coverage are paid. The City also purchases stop-loss insurance for protection in cases where the City's portion of an individual's insurance expenses exceed $225,000 (the stop-loss is changing in 2020 to $225,000 from the 2019 amount of $175,000).  Currently, the City has three groups within its health insurance plan:  Active Employees, Pre-65 Retirees, and Post-65 Retirees.  For FY 2019, the City spent approximately $7 million for its share of health insurance benefits. The City's benefit offerings are optional for both active employees and retirees. The City contributes to employee health insurance and term life insurance premiums.  All other voluntary benefit premiums are employee paid. 
 
The original health insurance renewal for FY 2020 showed an increase of 12%.  The City, in partnership with OneDigital and Gateway Health, was able to reduce the increase to 9.5%, which will be shared among the City and the employees. This is the result of an increase in stop-loss premiums, administration fees, and projected claims costs. An overview of the City's benefit offerings, along with the renewal information and premium contributions for the 2020 calendar year, will be discussed at Work Session. 
RECOMMENDATION
This item requires no action from City Council. 

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