Loading...
HomeMy WebLinkAbout8/14/2018________________________________________________________________ S:\Council Committees\2018\Personnel\August\August 14 ASR.docx Page 1 ST:mc B A K E R S F I E L D Committee Members Staff: Steven Teglia Councilmember, Ken Weir, Chair Assistant City Manager Councilmember, Willie Rivera Councilmember, Bruce Freeman SPECIAL MEETING OF THE PERSONNEL COMMITTEE Tuesday, August 14, 2018 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 Present: Councilmember, Ken Weir, Chair Councilmember, Bruce Freeman Councilmember, Willie Rivera City staff: Steven Teglia and Chris Huot, Assistant City Managers Virginia Gennaro, City Attorney Lisa McGranahan, Human Resources Manager Mari Blowers, Benefits Technician Nelson Smith, Finance Director Randy McKeegan, Assistant Finance Director Retired employees Fred Baugher, Florn Core, Bill Descary, and Margaret Ursin and BCARE: Others present: Tom Morrison and Johnny Wu, Segal Company Pam Baougher, Kevin Holland 2. ADOPTION OF JULY 20, 2017 AGENDA SUMMARY REPORT A motion to receive and file the Personnel Committee’s July 20, 2017 Agenda Summary Report was approved. /s/ Steven Teglia ________________________________________________________________ S:\Council Committees\2018\Personnel\August\August 14 ASR.docx Page 2 ST:mc PUBLIC STATEMENTS There were no public statements. 3. NEW BUSINESS A. 2019 Health Care Plan Renewals - Teglia Assistant City Manager Teglia provided a summary of the annual process to prepare the rate renewal package for 2019. He stated Segal Company had worked with the various plan providers to obtain an understanding of the rates for the new plan year, which begins on January 1, 2019. The same information was provided to the Insurance Committee earlier in the day. He introduced Tom Morrison with the Segal Company (Segal) to present their report by way of a handout and PowerPoint presentation. Mr. Morrison distributed information to the Committee and gave a summary overview. Key points are:  The overall City 2019 contribution for active employee medical benefit is decreasing 2.7% or $443,200. All the plans had decreases - Blue Shield PPO (-2.7%), Blue Shield Full HMO (-0.2%), Blue Shield Narrow HMO (-0.2%), Kaiser HMO (-5.0%), and Kaiser High Deductible Health Plan (-5.0%).  The retiree medical benefit is increasing 1.9% or $158,500. All plans had increases - Blue Shield PPO (2.1%), Kaiser HMO (15%), and Kaiser HMO Senior Advantage (2.2%) with the exception of Blue Shield Medicare Advantage which experienced a decrease (-21.3%).  There is no rate increase to the United Concordia Dental PPO and HMO plans for both, active employees and retirees, due to a three year multi- year rate guarantee contract; 2019 is the third year of the contract.  There is no rate increase to the MES Vision contact as well due to a multi- year guarantee contract; 2019 is the third year of the contract.  There is no rate increase to the Section 125 Flexible Benefits, Long Term Disability, Basic Life Insurance, and AD&D Life Insurance.  The Optum Employee Assistance Program is increasing by 1.75%.  Drivers of the current rate decreases are: The Budget Reconciliation Act suspended the Insurer Tax under the Affordable Care Act for 2019; it is scheduled to be applied to the rates in 2020; overall medical claims decreased for all Blue Shield groups; prescription claims increased for Blue Shield HMO and the PPO retirees; medical and prescription claims decreased for Kaiser as well. ________________________________________________________________ S:\Council Committees\2018\Personnel\August\August 14 ASR.docx Page 3 ST:mc Mr. Morrison also provided a summary of historic active and retiree plans rate information and enrollment comparisons for the last two years as discussed with the Insurance Committee earlier in the day. Assistant City Manager Teglia reported that after careful consideration and thorough discussion, the Insurance Committee voted unanimously to recommend the City accept and adopt the rate renewal package as presented. Staff and Segal were also in agreement with the Insurance Committee’s recommendation. In addition, Assistant City Manager Teglia stated the savings resulting from the positive rate renewals are recommended to be carried over to next year’s budget as a precaution for any rate increase that may occur. The Insurance Committee concurred with the recommendation. Committee member Rivera made a motion to accept staff’s recommendation and submit the item for approval to the full City Council. The motion was unanimously approved. 3. COMMITTEE COMMENTS Councilmember Freeman asked staff to provide a summarization of the City’s Other Postemployment Benefits (OPEB) liability and Trust Fund Balance related to retirees. Assistant City Manager Teglia provided a brief introduction regarding OPEB costs for employees hired before 2006. Finance Director Smith stated that as of June 2017, there was a total liability balance of $140 million and approximately $61 million in the trust fund balance. This results in an unfunded liability amount of approximately $78 million. The City currently budgets more than the annual subsidy amount; the difference between premiums paid and amount budgeted for the year is added to the trust fund. An update of this information is provided as part of the Finance Department’s budget presentation on an annual basis; in addition, Segal typically presents this information to the City Council as well. Councilmember Weir requested staff provide him with a projection of what would happen to the liability and savings if the subsidy were tied to a set benefit number. 4. ADJOURNMENT The meeting was adjourned at 1:07 pm