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CL- 2010 Work Session   Item #:   A.    
Work Session Meeting
Meeting Date: 11/08/2018  
Subject:    Review of Employee and Retiree Benefit Changes for 2019
From: Sara Weller

COUNCIL ACTION
Work Session:     11/08/2018
SUMMARY
Every year, the City’s benefit package is reviewed 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 2019 calendar year to Council at the November 8, 2018 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 $175,000 (the stop-loss is changing in 2019 to $175,000 from the 2018 amount of $150,000).  Currently, the City has three groups within its health insurance plan:  Active Employees, Pre-65 Retirees, and Post-65 Retirees.  For FY2018, the City spent approximately $7.2 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 City partnered with OneDigital and Gateway Health to reduce the renewal cost and secure opportunities to control future health insurance expenses through changes in plan design, contribution strategy, pharmacy options, and stop-loss insurance for 2019.  As a result, the City will not see an increase to the budget for 2019 health insurance costs. Depending on the health insurance plan an employee selects, he or she may see an increase in their premiums in 2019.  The City continues to research opportunities to reduce future insurance costs, including the implementation of an onsite or nearsite health clinic in 2019 for members on the health insurance plan. 

An overview of the City's benefit offerings, along with premium contributions for the 2019 calendar year, will be discussed at Work Session.
RECOMMENDATION
This item requires no action from City Council.

Attachments
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