Agenda - Council - 02/11/2003 - Laserfiche WebLink

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-48- COMMITTEE BUSINESS Case #1: Health Insurance Contribution Contract Negotiations · Interim Human Resources Manager Boganey stated that the collective bargaining agreements with AFSCME and LELS require that the City annually negotiate the City's contribution toward the cost of health insurance benefits. On January 9, 2003, the .City's negotiating team and representatives of both bargaining groups reached a tentative agreement on the contribution for calendar year 2003. The members of each bargaining unit were scheduled to meet on and vote on the proposals prior to the City Council meeting January 14, 2003. On January 14th' staff met with the two bargaining units and continued negotiations, since both groups rejected the original offer. The City was able to reach a new agreement'with AFSCME for insurance as follows: · Employer contribution to single coverage will increase from $297.33 t° an amount not to exceed $376.00 effective January 1, 2003 · Employer contribution to family coverage will increase from $500 per month to $598.00 per month, effective January 1, 2003 · Beginning February 1, 2003, the City will provide Major Medical Insurance as a new low cost option · Beginning February 1, 2003,. the City will provide health inSurance with a $15.00 Office Visit Co-Pay and 100 percent Hospitalization · Employer agrees to continue explor/ng options for the most cOst-effective health insurance program with input from the employee relatiOns committee · Employees who waive coverage will continue to receive $290.00 per month in accordance with previOus Council action The estimated cost of the agreed upon health insurance contribution is $198,268. The current budget for this cost is $191,198. A transfer from Council contingency will cover the additional cost. The current budget was established in advance of receiving the premium quotes from the administrator of the City's plan Minnesota Public Employees Insurance Program. The quofes received after budget development-increased premiums by an average of 29 percent, significantly more than in past years. To reduce the overall cost to employees and the City it was agreed mutually to provide Major Medical coverage as a lower cost option to employees and also increase the co-pay for office visits from $10.00 to $15.00, Both parties are committed to reviewing the current plan design, plan utilization and alternative providers to assure that this important benefit is being provided in the most cost effective manner. Councilmember Cook inquired if the non-organized emplOyees have the "me too claUse''. Mr. Boganey replied that it did not relate to non-union employees. He noted that the City does have a letter of acceptance from AFSCME accepting the new terms.- Finance Officer Lund noted that she would prefer that the AFSCME and LELS rates are kept the same. Personnel Committee/January 14, 2003 Page 2 of 8 I I I I I I I I ! I I I I I