HomeMy WebLinkAbout25E - EMPLOYEE GROUP INSURANCE RENEWALREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
SEPTEMBER 7, 2010
TITLE:
EMPLOYEE GROUP INSURANCE
RENEWALS
TY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 1St 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. AIG has agreed to renew our Accidental Death and Dismemberment insurance
agreement with no increase in cost for a one year period through December 31, 2011. AIG has
agreed to a rate decrease of approximately 23.1 % for Life rates and has agreed to a two-year rate
guarantee for Life rates through December 31, 2012. We are currently in the second year of a two-
year rate guarantee for our Long Term Disability insurance through December 31, 2011.
Life Insurance
Insurance Coverage Current Insurance Insurance Percent Change
Rate Renewal Rate
Life Insurance $0.13 per $1000 $0.10 per $1000 -23.1%
Accidental Death & $0.0285 per $1000 $0.0285 per $1000 0.0%
Dismemberment
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Employee Group Insurance Renewals
September 7, 2010
Page 2
Long-Term Disability
Group Coverage Current Insurance Insurance Percent Change
Rate Renewal Rate
Management $0.57 per $100 $0.57 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 contracts with Delta Dental and United HealthCare are up for renewal. Delta has agreed to
renew our contract for a period of two years with no rate increase. The contract with United
HealthCare will not be renewed and will end on December 31, 2010. The decision not to continue
the United HealthCare agreement was based on low employee participation, higher premium
costs, and duplication of benefits with the City's Safeguard Plan. This will be reviewed with the
City's labor groups. We are currently in the second year of a two-year contract with Safeguard
Dental, and there will be no rate increase.
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 0.0%
Type of Coverage Cur e l Rate Rateelt2010
a
Percent Change
Employee $48.39 $48.39 0.0%
Employee Plus Family $119.17 $119.17 0.0%
25E-2
Employee Group Insurance Renewals
September 7, 2010
Page 3
CalPERS Health Program
The CalPERS basic HMO health plans will increase by 10.6% and the basic PPO health plans will
increase by 8.7%. The increase reflects higher costs anticipated for hospital, medical and
prescription drug use next year. The City will incur a 5.0% increase in costs because the City's
contribution toward medical is tied to the Kaiser rate. The employees will pick up any increase in
cost above the Kaiser rate.
Plan Employee
Only Employee & one
Dependent Employee & two or
more Dependents
Blue Shield Access+ HMO $567.87 $1135.74 $1476.46
Blue Shield NetValue $488.62 $977.24 $1270.41
Kaiser $477.95 $955.90 $1242.67
PERSCare $819.18 $1638.36 $2129.87
PERSChoice $516.28 $1032.56 $1342.33
PERSSelect $451.48 $902.96 $1173.85
PORAC safet members $527.00 $987.00 $1254.00
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, 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.
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Employee Group Insurance Renewals
September 7, 2010
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 2010.
2010 2011 Difference
AIG Life/LTD Insurance Co. $ 229,722 $ 187,623 $ -42,099
Dental Carriers $ 608,066 $ 559,344 $ -48,722
CaIPERS Medical $ 9,569,910 $ 9,022,123 $ -547,787
REACH (EAP Provider) $ 34,410 $ 34,410 $ 0
Total Annual Cost $10,442,108 $ 9,803,500 $ -638,608
Funds in the amount of $9,803,500 are budgeted and available in the Personnel Services
Employee Benefits account (account no. 08109053-64010).
APPROVED AS TO FUNDS AND ACCOUNTS:
Kathie Gonzalez
Executive Director
Personnel Services
Francisco Gutierrez
Executive Director
Finance & Management Services Agency
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