Agenda - Council - 12/18/2001 - Laserfiche WebLink

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-12- quotes; however low employee participation rates and lack of claims information prevented the carriers from quoting new rates. As a result, the City finds itself with no other option than to renew its contract with PEIP for another two-year term. The deadline for a renewal is December 11, 2001. In Minnesota, health insurance carriers quote rates for employers based on the total number of eligible employees and the number of participating employees. In the City of Ramsey's case, there are more than 50 eligible employees, but less than 50 participating employees. With this classification, carriers thus require either a 50 percent or higher participation level or two years of claims experience in order to quote rates. Medica, Blue Cross Blue Shield, and Health Partners denied quotes for the City of Ramsey on this basis. In September 2001, T.C. Field & Company completed a Benefits Review Analysis for the City of Ramsey, and this information was presented to the City Council as part of a closed union negotiation session during the Personnel Committee meeting on October 9, 2001. Basically the discussion centered around the issue of low employee participation rates and considerations to draw employees back to th.elCi~ts health insurance and .other benefit programs. The City of Ramsey currently has ~:~5:~:P:ercenf~£ eligible employees participating in health insurance. The remaining 54 percent:: choose to waive coverage and instead receive $290 as a cash-out option. This cash-out option continues t0 pull ttxeCity's employee participation rate in health insurance down and is putting the ~ty~p b~e~:efi[ip~b~ at risk. Lack of claims information proves to be a problem for the City as well. Req~s we~eT~ade of PEIP to provide detailed health insurance claims information specific to'~h~C~219f R~sey. PEIP did provide some information, but it was inadequate and considered unreli~bl~bY the carriers. PEIP maintains it is unable to track this level of detail for a ~oup with siich a small number of insured lives. Further efforts were made to compel PEIP to obtain thi~ ::informafi0n~-an~ the Department of Employer Relations (DOER) at the State level was contac{~i ~b~ver :tliey also maintained that PEIP was unable to produce the information due to the limited groups~ze. In l¢oking to the future, it was evident that the City of Ramsev has some work to~i¢° on:it~;~'~th insurance and the lev.el of participation. *o make 'the best of the PE~:"'Con~a'~.'goin~'~i~0,rward the City may want to consider: · Eliminate $290 cash-out option for any new employees hi~}}~fter JanuarY 1, 2001. Additional discussions about eliminating this option will oc~Ui~ ~s U~e)n negotiations move forward. · Include a contract addendum highlighting a "no penalt~)<~lause'' 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 wr/ting. · Bring on an agent to represent the City's interests in dealing with PEIP. Through the recent process of trying to obtain claims information 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 Personnel Committee/November 27, 2001 Page 2 of 6 I I I I I I I I I I I I I I I I I I I