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Personnel Committee 4. 4. Meeting Date: 01/22/2013 By: Colleen Lasher, Administrative Services Title: Consider a Resolution to Approve the 2013 Non -Union Health Insurance Contributions and Non -Union Cost of Living Adjustments Background: The City currently employs 65 employees, of which 63 employees are benefit eligible. Of the 63 benefit eligible employees, 21 are non -union and 42 are union. This case is specific to the City's 21 non -union employees; as of this writing the union contracts have not been settled. Health & Life Insurance -- 2013: January 2013 marks the beginning of the City's second year with Blue Cross and Blue Shield and Hartford Life. The City changed health insurance carriers in 2012 from HealthPartners to Blue Cross and Blue Shield as part of the Local Government Information Systems Consortium (LOGIS). The City benefited by joining the LOGIS group in many ways, as follows: gaining the opportunity to join a larger group, tiered plan options which included single, single plus children, single plus spouse, and family (as compared to only single and family plan options in previous years); options for higher deductible plans; four years of rate caps as follows: 8 1/2% in 2013, 10% in 2014, 11% in 2015. and 12% in 2016--which are not contingent upon a service contract, two networks for employees to choose from based on their healthcare needs, 100% coverage (in most plans) after the deductible is satisfied, less expensive basic life insurance and approximately $500.00 contribution per year toward the OPEP GASB Statement No. 45 valuation fee. The 2013 health insurance rates increased to the capped amount of 8.5% and the life insurance rates remained unchanged. The proposed City health insurance contributions are within the budgeted amount and are the same contributions that have been proposed (but not settled on) with all other employee groups (AFSCME, LELS-Patrol and LELS-Sergeants). See attachments for additional detail. Option to Waive Health Insurance: Prior to 2002, City employees that showed proof of other health insurance coverage were given the option to waive health insurance in exchange for $290 per month as wages. However, due to the City's desire to reach enrollment of at least 50 employees (to obtain Large Group Status) this option was no longer offered after January 1, 2002. Conversely, as a result of joining the LOGIS group, the City's enrollment is now pooled with many other cities and counties. Undoubtedly, there are employees that are currently double covered and would like the option to waive coverage in exchange for a cash benefit (credit in lieu of coverage). The LOGIS membership agreement provides a formula for calculating the maximum credit in lieu of coverage allowed; in our case that amount is $295.75 per month. There are currently 12 employees grandfathered in and receiving the $290 benefit and 1 employee that waives health insurance coverage, but is not eligible for the $290 benefit. Staff contacted Yvonne Johnson of Gallagher Benefit Services (the City's benefit Broker) and received confirmation that offering this option in no way jeopardizes the City as long as we remain with LOGIS (as planned through at least 2016). Even so, if the City were to reinstate the waiving benefit, the City may want to require new participants to agree to the following terms in order to safeguard against any unforeseeable negative impacts to the City: