Body
Department of Administrative Services
Reference: Fringe Benefits
To: Mayor Richard N. McLean and Members of City Council
Through: Manuel Esquibel, City Manager
Prepared By: Karen Borkowski Surine
Date Prepared: 10/1/14
PURPOSE
To establish fringe benefits for regular full-time and regular part-time employees and City Council for fiscal year 2015.
BACKGROUND
The City of Brighton contracts with HUB International Southwest, Inc. for the purpose of soliciting and negotiating bids for benefits, assisting employees with medical billing issues, assisting us with the requirements of the Patient Protection and Affordable Care Act and analyzing data. This year the City of Brighton opted to have medical benefits self-funded. A team consisting of Manuel Esquibel, City Manager, Lynn Baker, HUB International Client Manager, Marv Falconburg, Asst. City Manager for Development, Dan Frelund, Finance Director, Kale Olson, Asst. Recreation Coordinator & EAC Vice-chairperson, Terry Reams, HUB International Senior Vice- President, Murphy Robinson, CM Intern and EAC Chairperson, Karen Borkowski Surine, Administrative Services Director, Danny Talley, Senior Vice-President, HUB International, Kathy Viveros, HR Analyst, and Nathan Wolfe, HUB International Underwriter met monthly to review funding options, recommend educational efforts and data projections. The goal of this renewal is to mitigate costs of the Patient Protection and Affordable Health Care Act, specifically prescription benefits that will be allowed to be counted towards annual deductibles in 2015 and provide employees with comparable coverage to what they have become accustomed to as well as provide a financially viable benefits plan. At this time, staff recommends medical benefits continue to be self-funded and that the insurance provider continue to be United Healthcare.
The cost to the City for healthcare benefits in 2015 is $3,117,650. The City has set aside $425,000 in reserves to cover expenses that may be incurred above the expected claims. Please see Exhibit A for the 2015 Employee Benefit Summary.
The City of Brighton will continue to pay the entire cost of benefits for its employees (as addressed in Exhibit A). Employees electing to cover family members will pay the same premium as last year. Employees will have a choice to go with one of two United Healthcare options; In Network PPO only or a PPO allowing for higher In Network and Out of Network options. In 2015, prescription medications will be counted towards the out of pocket maximum. The co-pay amounts will increase in each plan to cover this mandate. Other plan design changes have been implemented to mitigate the high usage seen in 2014.
With a self-funded medical benefits plan it is very important to make an effort to control costs with a Wellness program. The City will continue with a strong education campaign for employees and City staff is continuing to partner with PVMC for on-site health coaching in 2015. This program will allow employees to confidentially work with a medical professional to reach their healthcare goals. The City is also contracting with HUB for the Telehealth benefits package. Telehealth consists of Teledoc, Health Advocate and eDocAmerica. Teledoc gives employees 24/7 access to US board-certified doctors and pediatricians for no cost to the employee or the City medical plan per consultation. If appropriate, the physician will prescribe medication and call in the prescription to the member's pharmacy of choice. It is ideal for routine, nonemergency issues (colds, flu, bronchitis, sinus problems, allergies and more. The Health Advocates is available to employees and covered dependents at no cost and is also available 24/7. The Health Advocates helps employees and covered dependents coordinate care among doctors and medical institutions in various ways, to include negotiating a reduction on the amount due to a provider if the balance is more than $400. eDocAmerica provides 24/7 e-mail access to this medical team. Employees can ask any medical or health questions and get a personal, direct answer. Members also have access to a video library and the program sends out weekly health tips via e-mail from doctors. The City has budgeted $30,000 for the Wellness program.
The Dental Insurance provider this year is Delta Dental plan. Since there have been no major issues with Delta Dental plan and they have not increased the premium for participating in their plan, staff is recommending continuing with this plan. The City of Brighton covers the entire cost for dental insurance for the employees. The cost for employees electing coverage for their family is $23.10 per month. The total cost to the City for dental coverage in 2015 is $181,021. In 2016 we will be exploring taking this program to a self-funded plan.
The Vision Provider is VSP. The cost in 2014 was $59,979 and will be $62,977.95 in 2015. Staff recommends continuing with VSP and maintaining the same coverage.
The City currently has coverage for Life/AD&D, Long Term Disability and Short Term Disability with Mutual of Omaha. The cost to the City for the premium for 2015 is $98,616.
The maximum contribution into the Flexible Spending Account is $2,500 for healthcare. Eligible dependent care contributions and reimbursements may not exceed $5,000 each calendar year. This is the same as last year and follows IRS guidelines.
The Anthem Pro Employee Assistance Program provides up to five free consultations with professionals in counseling, legal, geriatric and financial services per incident per year for regular employees. This benefit is well used by our employees. The cost to the City for this program is $15,000.
Regular full-time and part-time benefitted employees and their families can obtain a Family Pass to the Brighton Recreation Center through the Employee Wellness Program at no cost. The cost for a Family Pass for a resident is $470 and for a non-resident is $595. This represents quite a savings for health conscious families. The Recreation Center Staff and Director Gary Wardle reported that the addition of this benefit has not caused a burden to the staff.
FINANCIAL IMPACT
The total benefits package is $3,505,269.95. The City's cost for fringe benefits is included in the adopted 2015 budget.
STAFF RECOMMENDATION
Staff recommends approval of the proposed Ordinance. The negotiation skills of our broker, employee education by the Human Resources Department, the Wellness partnership with PVMC and the support of City Council has allowed us to keep the premium cost for benefits the same for employees and still allow us to have a very good benefits package. Self-funding our benefits allows us an alternative to buying traditional health insurance with fewer state mandatory benefits, freedom to tailor the plan design to meet the City's loss history and future goals, eliminates insurance company overhead and fees, improves cash flow by allowing us to hold claims dollars until they are actually needed and gives the City better access to claims data to examine areas of utilization while still maintaining patient privacy.
OPTIONS FOR COUNCIL CONSIDERATION
Approve the proposed benefits package or request staff come up with a different option.
ATTACHMENTS
Benefit summary for 2015.
Ordinance adopting benefits.