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Personnel Committee
<br />Meeting Date: 09/27/2011
<br />By: Colleen Lasher, Administrative Services
<br />Title:
<br />Consider a Resolution to Select a 2012 Health Insurance Carrier
<br />4. 1.
<br />Background:
<br />The City's benefits broker, Yvonne Johnson, from Gallagher Benefits Services will be at the Personnel Committee
<br />Meeting to discuss the City's 2012 health insurance options and to answer any questions that the Committee may
<br />have regarding the following information.
<br />HealthPartners has been the City's health insurance carrier since January 2008. During this time rates have
<br />increased as follows: 14% in 2009, 18% in 2010, and 17% in 2011. For 2012, Gallagher Benefit Services was able
<br />to include the City in with the LOGIS bidding process to join Blue Cross and Blue Shield in 2012. It is important to
<br />note, in previous years both BCBS and Medica declined to bid on the City due to high loss ratios. The estimated
<br />increase, depending on plan/network, will vary by rate tiers (single, single plus spouse, etc.) but the overall increase
<br />to the plans range from 12.74% to 17.2 %.
<br />The City sees benefits to joining the LOGIS group and BCBS, as follows: opportunity to join a larger group, tiered
<br />plan options which includes single, single plus child(ren), single plus spouse, and family; which will better meet
<br />employees' actual coverage needs (as compared to only single and family plan options under HealthPartners),
<br />options for higher deductible plans; $4000 Single & $8000 Family (as compared to the current maximum
<br />deductible of $2000 Single & $4000 Family under HealthPartners), four years of rate caps as follows: 9% in 2013,
<br />10% in 2014, 11% in 2015, and 12% in 2016 - -which are not contingent upon a service contract, two networks for
<br />employees to choose from based on their healthcare needs (as compared to one under HealthPartners), 100%
<br />coverage (in most plans) after the deductible is satisfied (as compared to 80% under HealthPartners), less expensive
<br />basic life insurance, approximately $500.00 contribution per year toward the OPEP GASB Statement No. 45
<br />valuation fee, and more plan options.
<br />HealthPartners renewal came in at a 3.4% increase for 1 -year with no rate cap beyond 2012 and no ability to make
<br />plan design changes Based on the City's claim volume the justified increase would have been 20.23 %. When the
<br />City requested a 2 -year agreement, HealthPartners responded with an offer of 15% increase in 2012 and 19% in
<br />2013, again with no ability to make plan design changes.
<br />At this time, staff is only seeking direction for changing health insurance carriers. Once a carrier is selected for
<br />2012 the issue of contributions (as part of union negotiations and non -union discussions) will be brought forward
<br />for discussion and direction at a future date.
<br />Observations:
<br />Joining the LOGIS group requires participation in the group's $10,000 basic life insurance with the Hartford
<br />Insurance Company. The coverage through the Hartford Insurance is a slightly better value than the current
<br />carrier, Minnesota Life. If the proposed changes are approved, the Minnesota Life policy would be revised or
<br />eliminated based on circumstances.
<br />Entities within the LOGIS Group
<br />City of Apple Valley, City of Blaine, City of Brooklyn Center, City of Corcoran, City of Crystal, City of Dayton,
<br />City of Deephaven, City of Delano, City of Edina, City of Excelsior, City of Farmington, City of Golden Valley,
<br />City of Hopkins, City of Medina, City of Minnetonka, City of Minnetonka Beach, City of Minnetrista, City of
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