Agenda - Council Work Session - 02/26/2013

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Councilmember Backous pointed out that if the spouse's employer's coverage changes significantly, a status change is allowed. He asked if the City has noticed any problem by not offering a cash payment in lieu of benefits. Human Resources Manager Lasher advised that employees have wanted this option for a long time and in some cases, depending on their spouse's plan, there is either first dollar coverage or there is not. With the police officer who wanted this benefit, it was because if the officer stayed on the City's plan, he was forced to meet the $4,000 deductable before his spouse's plan would pick up anything Councilmember Backus stated the City cannot control the benefit their spouse receives. Chairperson Tossey indicated the City has 12 employees already grandfathered in that get $290 and asked how many more employees there will be. Personnel Committee / January 22, 2013 Page 6 of 11 Human Resources Manager Lasher advised that one more is currently waiving but does not get the benefit. In administration, she knows of three more. Councilmember Backous noted the opt out results in the City paying the spouse's premiums and puts that risk on someone else. In addition, it takes the employee out of the City's pool, possibly hurting the City's status and rates. Councilmember Kuzma stated he favors offering the opt out with the caveat that the employees agree to come back if the City faces financial detriments as a result of offering credit in lieu of coverage. Human Resources Manager Lasher noted the City is locked in through the end of 2016. Chairperson Tossey stated the City could try this alternative and if there is an impact, change it. Councilmember Backous cautioned the Committee that from a benefits standpoint, it is easy to give things but difficult to take them away. Chairperson Tossey stated he would support allowing the opt out with the added language suggested by Councilmember Kuzma. Motion by Councilmember Kuzma, seconded by Chairperson Tossey, to recommend that the City Council adopt the Resolution to offer the option to waive health insurance in exchange for a cash benefit conditioned on the employee agreeing to come back if the City faces financial detriments as a result of offering credit in lieu of coverage. Further discussion: Human Resources Manager Lasher advised that a few employees take the benefit only for VEBA since it is $130 /month.