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Home My WebLink About25A - AGMT - INSURANCE RENEWALCOUNCIL CITY DATE: AUGUST 6, 2014 TITLE: EMPLOYEE GROUP INSURANCE RENEWALS NNW CITY MAN EIVPZ IV CLERK F COUNCIL USE O'.. ..we _k CONTINUED TO Authorize the City Attorney to prepare and authorize the City Manager and Cleric of the Council to execute agreements for long term disability, medical, dental, vision, employee assistance, employee group life and accidental death and dismemberment insurance, subject to non - substantive changes approved by the City Manager and City Attorney. 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 Aetna for full -time employees. Aetna has agreed to renew the contract for a period of two years with no rate increase through December 31, 2016. Life Insurance Insurance Coverage Current Insurance Insurance Percent Change Elate Renewal Rate Life Insurance $0.102 per $1000 $0.102 per $1000 0.0% Accidental Death & $0.020 per $1000 $0.020 per $1000 0.0% Dismemberment 25A -1 Employee Group Insurance Renewals August 5, 2014 Page 2 .. Group Coverage Current Insurance Insurance Percent Change Employee Rate Renewal Rate 0.0% Management $0.352 per $100 $0.352 per $100 U% Employees $8.78 $8.78 0.0% 130 day watt Employees $15.98 $15.93 0.0% 60 day it Dental Plans The contract with Delta Dental and MetLife is scheduled for renewal. Delta has agreed to renew the contract for a period of two years with no rate increase in the first year and a cap of 6,6% rate increase in the second year. MetLife has agreed to renew the contract for a period of two years with an increase of 2.0% each year. This increase is directly related to dependent children remaining covered on the insurance until age 26 under the Patient Protection and Affordable Care Act. Type of Coverage DCur�e l Rate RaDelta pePercent Change Employee $48.39 $48.39 0.0% Employee Plus Family $119.17 $119.17 0.0°% Type of Coverage MetLife Dental Current Rate MetLife Dental Rate 2014 Percent Change Employee $25.86 $26.38 2.0% Employee Plus Family $44.21 $45.09 2.0% 25A -2 Employee Group Insurance Renewals August 5, 2014 Page 3 The change in CaIPERS basic HMO health plan rates range from a decrease of 13.80% for United Healthcare to an increase of 25,48% for Anthem HMO Traditional. The average increase for all HMO health plans will be 8.4% and the average increase for all basic PPO health plans will be 8.9 %. The City will incur a 9.3% increase in costs for employees enrolled in the CaIPERS medical plans. The city contribution for SEW and POA were capped during the last negotiations and will remain the same. The employees will be responsible for any increase in cost above the City contribution. I + or more De ancients Percent Change Anthem 6 Anthem Traditional $1486.24 ♦ i ; f f 6lue Shield ccess+ HMO $119732 Health Net HMO « $1041.18 •. • A i $1507.48 '.ff UnitedHealthca O ' « $898.20 i.. PERSCare wPO $1314.64 $1709.03 « PERSChoice PPCO) 4 4! .lei s I f 1 PERSSelect P f 25A -3 Employee Group Insurance Renewals August 5, 2014 Page 4 problems that may be interfering with their performance on the job. Consultation for problems such as alcohol and drug abuse, legal, marital and family problems are available. REACH currently provides services under this program. Full time and Fart time employees are eligible to participate in the Employee Assistance Program. REACH has agreed to renew this contract for a three year period and lower the employee count from 1550 to 1460. The billing will now be based on two tiers (full time and part time) resulting in an 32.4% premium decrease for part time employees and an overall decrease of 16% in costs. F. a « M STRATEGIC PLAN ALIGNMENT Goal /Objective & Associate Strategy Strategic Plan No. 7, 6 Approval of this item allows the City to meet Goal Seven, Team Santa Ana, Objective #6. Provide a positive workplace environment that supports the health of its employees and celebrates its successes. 25A -4 Current Rate based on Insurance Renewal Type of Coverage 1560 employees Rate based on 1460 Percent Change employees Full Time Employee $1.85 /employee $1.85 1employee (970 full time) 0.0% Part Time Employee $1.85 /employee $1.25 /employee (490 part time) - 32,5% F. a « M STRATEGIC PLAN ALIGNMENT Goal /Objective & Associate Strategy Strategic Plan No. 7, 6 Approval of this item allows the City to meet Goal Seven, Team Santa Ana, Objective #6. Provide a positive workplace environment that supports the health of its employees and celebrates its successes. 25A -4 Employee Group August 5, 2014 Page 5 FISCAL IMPACT Insurance Renewals 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 2014. Coverage for POA (Sworn and Non - Sworn) *City administered insurance Funds in the amount of $6,317,081 are budgeted and available in the Personnel Services Employee Benefits account (account no. 08109053- 64010) to pay for City administered insurance coverage *. Funds in the amount of $8,012,196 are budgeted and available in the Employee Benefits account (account no. 08109053 - 64010) to pay for the insurance coverage administered by the POA. The total budgeted amount of $14,329,277 is available in Fiscal Year 2014 -2015. The balance will be budgeted in Fiscal Year 2015 -2016. Edward S. Raya Executive Director Personnel Services APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance & Management Services Agency„ 25A -5 CY 2014 CY 2015 Difference Aetna Life* $ 14,640 $ 14,640 $ 0 POA LTD Insurance $ 399,072 $ 396,000 $ - 3,072 POA Dental $ 540,000 $ 540,000 $ 0 POA Medical $ 7,075,320 $ 7,074,000 $ - 1,320 REACH (EAP Provider)* $ 11,100 $ 11,100 $ 0 Total Annual Cost $ 8,040,132 $ 8,035,740 $ - 4,392 Coverage for SEIU, CASA, SAMA, EM, PMA & PTCS (City Administers) CY 2014 CY 2015 Difference Aetna Life /LTD Insurance* $ 114,316 $ 115,788 $ 1,472 Dental Carriers* $ 335,699 $ 350,904 $ 15,205 CalPERS Medical* $ 5,595,732 $ 6,029,148 $ 433,416 REACH (EAP Provider)* $ 23,310 $ 17,784 $ - 5,526 Total Annual Cost $ 6,069,057 $ 6,513,624 $ 444,567 *City administered insurance Funds in the amount of $6,317,081 are budgeted and available in the Personnel Services Employee Benefits account (account no. 08109053- 64010) to pay for City administered insurance coverage *. Funds in the amount of $8,012,196 are budgeted and available in the Employee Benefits account (account no. 08109053 - 64010) to pay for the insurance coverage administered by the POA. The total budgeted amount of $14,329,277 is available in Fiscal Year 2014 -2015. The balance will be budgeted in Fiscal Year 2015 -2016. Edward S. Raya Executive Director Personnel Services APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance & Management Services Agency„ 25A -5 25A -6