Agenda - Council - 11/27/2001 - Laserfiche WebLink

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-184- City's employee participation rate in health insurance down and is putting the City's benefit program at risk. Lack of Claims Information Lack of claims information proves to be a problem for the City as well. Requests were made of PEIP to provide detailed health insurance claims information specific to the City of Ramsey. PEIP did provide some information but it was inadequate and considered unreliable by the carriers. PEIP maintains it is unable to track this level of detail for a group with such a small number of insured lives. Further efforts were made to compel PEIP to obtain this information and the Department of Employer Relations (DOER) at the state level was contacted; however they also maintained that PEIP was unable to produce the information due to the limited group size, Contract Renewal With PEIP In looking to the future, it is evident that the City of Ramsey has some work to do on its health insurance and the level of participation. To make the best of the PEIP contract going forward the City may want to consider: Eliminate $290 cash-out option for any new employees hired after January 1, .20..02. Additional discussions about eliminating this option will occur as union negotiations move forward. Include a contract addendum highlighting a "no penalty .clause" if the City would choose to leave PEIP for another carrier. In discussions about the difficulty of committing to a two-year contract with no guaranteed rate in the second year, the representative for PEIP stated verbally there is no penalty for leaving the plan early. However upon review of the contract, staff has noted a threat of legal action by the state for withdrawal from the plan prior to the end of a contract year. Because PEIP is unwilling to sign anything less than a two-year contract, staff suggests asking PEIP to put the verbally confirmed "no penalty clause" in writing. Bring on an agent to represent the City's interests in dealing with PEIP Through the recent process of trying to obtain claims infbrmation from PEIP and look at options for health insurance, it has become evident that the City may benefit from having an agent represent its interests in dealing with PEIP. An agent more thoroughly understands the health insurance industry and therefore knows the right questions to ask, what kind of information is needed on a quarterly or annual basis, and can help direct the City in its efforts to look for quality and economical health insurance. The average fee associated with having an agent is 2% of the total premiums paid. Using the 19.5% increase in premiums and assuming employee participation was to remain the same as it is currently, a projected agent fee for 2002 would be about $3254 annually or roughly $271 monthly. Because of their recent work on the Benefit Review Analysis and their thorough understanding of the City's