HomeMy WebLinkAbout25D - EMPLOYEE GROUP INSURANCE RENEWALSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
AUGUST 3, 2009
TITLE:
EMPLOYEE GROUP INSURANCE
RENEWALS
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CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
^ As Recommended
^ As Amended
^ Ordinance on 151 Reading
^ Ordinance on 2"d 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. 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. The contract with AIG is up for renewal and these rates will
decrease approximately 14.6%. AIG has agreed to a two-year rate
guarantee for Life and LTD rates through December 31, 2011 and a one-year
rate guarantee for AD&D rates through December 31, 2010.
Life Insurance
Insurance Current Insurance Percent Change
Coverage Insurance Rate Renewal Rate
Life Insurance $0.15 per $1000 $0.13 per $1000 -13.3%
Accidental Death $0.03 per $1000 $0.0285 per $1000 -5.Oo
& Dismemberment
25D-1
Employee Group Insurance Renewals
August 3, 2009
Page 2
Long-Term Disability
Group Coverage Current Insurance Percent Change
Insurance Rate Renewal Rate
Management $0.78 per $1000 $0.57 per $1000 -26.9%
Employees $10.39 $8.78 -15.5%
130 day wait
Employees $15.93 $15.93 O.Oo
60 day wait
Dental Plans
The contracts with Delta Dental, Safeguard Dental and United Healthcare
Dental are up for renewal. Safeguard has agreed to renew our contract
for a period of two years with no rate increase. There is no rate
increase in Delta Dental employee only coverage. However, Delta Dental
family coverage will increase 6.5o and United Healthcare Dental employee
only and family coverage will each increase 50. Rates for Delta Dental
and United Healthcare are guaranteed for one year.
Type of Coverage Safeguard Dental
Current Rate Safeguard Dental
Rate 2010 Percent
Change
Employee $25.28 $25.28 0.0%
Employee Plus
Family $43.22 $43.22 O.Oo
Type of Coverage United Healthcare
Current Rate United Healthcare
Rate 2010
Percent Change
Employee $26.48 $27.80 5.0%
Employee Plus
Family $52.96
$55.61
5.0%
25D-2
Employee Group Insurance Renewals
August 3, 2009
Page 3
Type of Coverage Currentt Rate RaDe12010 Percent Change
Employee $48.39 $48.39 0.0%
Employee Plus
Family $111.90 $119.17 6.50
CalPERS Health Program
The CalPERS basic HMO health plans will increase by 3.4% and the basic
PPO health plans will increase by 3.3%. There are no changes being made
to benefits or co-payments. Basic premiums for Kaiser will increase by
7.Oo. These rates fall well below national projections of an anticipated
9o increase for 2010 medical costs.
Plan Employee
Only Employee & one
Dependent Employee & two or
more Dependents
Blue Shield Access+ HMO $485.29 $970.58 $1261.75
Blue Shield NetValue $420.59 $841.18 $1093.53
Kaiser $454.99 $909.98
$1182.97
PERSCare $806.89 $1613.78 $2097.91
PERSChoice $472.83 $945.66 $1229.36
PERSSelect $441.41 $882.82 $1147.67
PORAC(safety members) $484.00 $906.00 $1151.00
Employee Assistance Program - REACH Employee/Associate Assistance
The City is entering into the second 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, marital and family problems are available.
Retirees are not included in the annual cost estimates. In addition, the
Police Officers Association is not included in the medical, dental or LTD
projections and the Firemen's Benevolent Association is not included in
the LTD projections, since they maintain their own insurance programs.
25D-3
Employee Group Insurance Renewals
August 3, 2009
Page 4
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 2009.
2009 2010
AIG Life/LTD Insurance Co. $ 300,548 $ 229,722
Dental Carriers $ 760,931 $ 608,066
Ca1PERS Medical $ 9,773,436 $ 9,569,910
REACH (EAP Provider) $ 34,410 $ 34,410
Total Annual Cost $10,869,325 $10,442,108
Difference
-$ 70,826
-$ 152,865
-$ 203,526
$ 0
-$ 427,217
Funds in the amount of $10,442,108 are budgeted and available in the
Personnel Services Employee Benefits account (account no. 81-177-6521).
APPROVED AS TO FUNDS AND ACCOUNTS:
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Kathie Gonzale
Executive Director
Personnel Services
Francisco Gutierrez
Executive Director
Finance & Management Services Agency
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