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Employee Group Insurance Renewals September 5, 2017 Page 2 coverage, long-term disability (LTD) insurance through the carrier Aetna, vision insurance through EyeMed, Flexible Spending accounts through TASC and EAP Program through REACH for all employees. Cook Insurance Service is the broker of record for dental coverage through the carriers Delta and MetLife. These coverages are sent out to bid by the brokers on a regular basis, usually in the summer of each year. Rates are finalized and issued in time for open enrollment in September of each year. The new rates are effective annually on January 1. The City purchases its medical insurance through CalPERS. The CalPERS health benefit program was established in 1962 under the Public Employees Medical and Hospital Care Act (PEMHCA). In 1967 the program was expanded to allow all public agencies access to the program. The City through a resolution amended its' contract with CaIPERS to allow it to participate in PEMCHA in 1996. CaIPERS is the second largest public purchaser of insurance in the nation behind the Federal Government and currently provides insurance for all State employees, public colleges and universities and to more than 1,000 school districts and local governments. To address the issue of rising health care costs, market stability, access and choice for contracting agencies, CalPERS utilizes a regional price approach grouping similar located agencies into regions. This approach and other polices are credited with holding down health care premiums, negotiating lower prices from hospitals and negotiating savings on prescription drugs. The change in CaIPERS basic HMO health plan rates range from a decrease of 10.60% for Blue Shield Access+ to an increase of 13.12% for Health Net Smart Care. The average increase for all HMO health plans will be 2.01% and the average decrease for all basic PPO health plans will be 2.46%. Currently the City contribution toward medical benefits for all bargaining units (except POA) is tied to the Kaiser rate (subject to labor negotiation agreements). Since Kaiser rates are increasing by 11.22% in 2018. Employees who chose plans other than Kaiser will be responsible for any increase in cost above the City contribution. Attached as Exhibit "A" are the CalPERS Health Premiums for 2018. Retirees are not included in the annual cost estimates. The Police Officers Association maintains its own insurance programs for medical, dental, vision and LTD coverage. The City purchases its dental insurance through Delta Dental and MetLife. Delta rates will not increase for 2018 and is guaranteed through December 31, 2019. MetLife rates will increase by 5% and is guaranteed through December 31, 2019. The City purchases its life and long term disability insurance through Aetna. The premium rates will not increase for 2018 and are guaranteed through December 31, 2020. The City purchases its vision insurance through EyeMed. The City does not contribute to the cost of this coverage. Employees are responsible for the full cost of this coverage. The premium rates will not increase for 2018 and will be guaranteed through December 31, 2020. 25E-2