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HomeMy WebLinkAbout08/18/2015/�-/ ste�ve� Te���;a� Staff: Steven Teglia Assistant City Manager � BAKERSFIELD Committee Member Councilmember, Ker Councilmember, Ter� Vice Mayor, Harold F SPECIAL MEETING OF THE PERSONNEL COMMITTEE Wednesday, August 18, 2015 12:00 p.m. City Hall North - Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 AGENDA SUMMARY REPORT Meeting called to order at 12:00 p.m. 1. ROLL CALL Committee members: Councilmember, Ken Weir, Chair Councilmember, Terry Maxwell Vice Mayor, Harold Hanson City staff: Alan Tandy, City Manager Steven Teglia, Assistant City Manager Chris Huot, Assistant City Manager Chris Gerry, Administrative Analyst III - City Manag Caleb Blaschke, Management Asst. - City Manag Nelson Smith, Finance Director Virginia Gennaro, City Attorney Christi Tenter, Human Resources Manager Mari Blowers, Benefits Technician Retired employees and BCARE: Florn Core, Fred Baugher and Margaret Ursin 2. ADOPTION OF OCTOBER 1, 2014 AGENDA SUMMARY REPORT The Report was adopted as submitted. 3. PUBLIC STATEMENTS There were no public statements. 4. NEW BUSINESS A. Discussion reaardinq 2016 Health Care Plan Renewals Assistant City Manager Teglia reported that the Segal Company has with the various plan providers to obtain an understanding of the ratE plan year, which begins in January. Segal representatives and staff Insurance Committee earlier this same day to present the same infc turned the meeting over to Tom Morrison and John Lu with the Segal present their report by way of a handout and PowerPoint. Mr. Morrison reported that the proposed rate increases for the AnthE PPO (21�) and HMO (9�0) plans for active employees are significantl has been seen before as a result of higher than normal usage of including high-cost specialty medications, and less than necessa premiums to cover those costs. It should be noted that some of medications did not exist before, but are making significantly more difference than what had previously been prescribed. He added th health condition of the participants in the PPO plan is declining wh against the Anthem Blue Cross book of business. To address this, inf provided about a possible wellness initiative, or a disease managerr that could potentially improve that. The proposed rate changes for active employees for the remaining as follows: • Kaiser HMO - 3.6�o increase; • Kaiser High Deductible Plan - 3.6� increase; • MetLife Dental - 2.7�o increase; • PUD Dental - 4.O�o increase (Imperial 1000) and 4.1 �o (Napa 80� • MES Vision - No change. The cumulative total for all proposed rate increases for active emplo� The proposed rate changes for retirees are as follows: • Anthem PPO - 14�o increase; • Anthem Secure Horizon - 16.7� increase; • Kaiser HMO - 15�o increase; The cumulative total for all proposed increases for retirees is 13.4�, w double what has been seen in all previous years, according to Mr. Mc Efforts to reduce the proposed rate increases might include a low� and/or higher co-payments for office visits and/or medications. ThE option of adding a formulary in the drug plan that excludes some dr there is a competing brand, identical value and property, which cc rate increase from 9�o to b.l b�o, and still provide brand and generic a Committee member Maxwell asked about the formulary, specificall� the decision on what drugs are available and are not. Mr. Morrison said that the decision is made by a panel from management company that Anthem Blue Cross subcontracts with, E: Mr. Morrison stated that because of the Affordable Care Act (ACA), only be reduced so far before a plan becomes invalid and the emplc to penalties for not offering a qualifying medical plan. The ACA als� increase or cost sharing for certain preventative services and medic City staff is always looking for ideas to offset healthcare premium in must be mindful of these federal law provisions. An analysis was performed that compared benefit modifications to c strategy that revises the current City/Employee 80/20 premium pay one that is 75/25 for the purpose of lowering the proposed rate incre< Based on this information and the alternatives, it is believed that botr the employees would achieve a greater benefit if the cost rati realigned. It would save the City money and not strongly impa< because it is deducted from the paycheck on a pre-tax basis. H alternatives will be considered and discussed by the Insurance a Committees. The Segal Company will be recommending to City Insurance and Personnel Committees to consider the modification to costs. The Segal Company released a Request for Information (RFI) for tr investigating the current insurance market, and responses are comi submittals have been received from United Healthcare, Blue Shiel< Once all of the information has been compiled, another mee� Insurance and Personnel Committees will take place. Committee member Maxwell asked what the reason might be employees' contribution by the figure of 5%. Mr. Morrison replied � Mr. Morrison reported that the City's contribution towards retiree hec is based on the individual formulas for each retiree. For those enrollE plan, the City contributes 42� of the cost of that plan. He r� Committee that increases in retiree healthcare costs translate into c the OPEB liability. Mr. Morrison provided an overview of the remainder of the report tr presented. He did emphasize a graph that reflected the benefits pa Blue Cross PPO versus the amounts of the premiums that had beer substantiated the data used by the provider to determine the p �r�t.Tt�•:���� Assistant City Manager Teglia reported that the meeting with t Committee earlier in the day went well. There was good dialog, a informed of all of the information and options. The Committee ir increases in out-of-pocket costs and reductions in benefits can be m than an increase in premiums. The proposed revision to the cost sK year, and it will be necessary to modify the Memoranda of Understar different labor groups through the labor negotiation process, should Committee reach approval. The Committee members requestE information, which will be provided at their next meeting on Septemk Committee member Hanson said that he is concerned about City en earn the lower wages. Mr. Morrison said that the majority of these individuals are already E Kaiser plan, which is the lowest cost plan with the lowest proposed ra Committee member Maxwell noted that the City can only do so r� only way to make this work is if the employees are willing to increasE they contribute. Mr. Morrison said that it is his belief that the City of Bakersfield has on cooperative labor group/management relationships that he has public entity. Assistant City Manager Teglia added that the Segal Company has p role in the success of the process as they communicate well with c provide full disclosure. It is they who developed the option of chan split option. Committee member Maxwell said that the City cannot absorb � increase in our payments for that insurance, and that fact was conf Assistant City Manager Teglia said that the Segal Company will ana from the responses to the RFI, after which it will be presented to 1 Committee, along with the information the Committee members h� from City staff. When there is a consensus, City staff and the Segal � return to the Personnel Committee for continued discussion. City Manager Tandy indicated that it is unlikely that any plans providers in response to the RFI will be identical to those currently in � City. Mr. Morrison agreed that it is probable that there will be differer City Manager Tandy added that employees are sensitive to the issu will be considerable study and discussion before the item returns to Committee with a recommendation from the Insurance Committee. Committee Chair Weir asked if the analysis would be ready by Septe and Mr. Morrison indicated that it would. 3. COMMITTEE COMMENTS None 4. ADJOURNMENT The meeting was adjourned at 12:44 p.m.