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Department of General Services
Reference: 2019 Benefits
To: Mayor Kenneth J. Kreutzer and Members of City Council
Through: Philip A. Rodriguez, City Manager
Prepared By: Karen Borkowski Surine, General Services Director
Date Prepared: October 9, 2018
PURPOSE
To establish fringe benefits for regular full-time and regular part-time employees and City Council for Fiscal Year 2019. We are recommending changes to the administration of the medical benefits, carving out pharmacy to a managed plan and self-funding the City's dental benefits. A more detailed explanation of our requests were provided by our brokers and staff at the most recent City Council Study Session.
STRATEGIC FOCUS AREA(S)
Financial Responsibility
Innovative, Data-Driven, Results-Focused City Government
BACKGROUND
The City of Brighton contracts with HUB International Southwest, Inc. for the purpose of helping us manage our self-funded benefits program, which is entering the sixth year. HUB representatives meet regularly with Finance and HR staff members to review claims performance, funding options and data projections. The goal of these meetings is to review claim activity, monitor the budget and identify trends in order to continue to provide employees with coverage comparable to that which they have become accustomed to, as well as, come up with a financially viable benefit options and strategic planning for future plan years.
The cost to the City to provide health benefits for 2019 is $4,253,721. The fund has current reserves of $1,800,000 to cover expenses that may be incurred above the expected claims. The current reserve gives sufficient security for 2019 and will not be increased. Medical inflation increases benefits costs annually at approximately 6-7%.
In order to contain costs and provide greater flexibility in managing the plan, staff is recommending switching to UMR, which is United Health Care's wholly owned Third Party Administrator. United Healthcare providers and...
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