HomeMy WebLinkAbout11/14/1988 Donald K. Ratty, Chair
James H. Childs
Kevin McDermott
Staff: John Stinson
AGENDA
BUDGET AND FINANCE COMMITTEE
Monday, November 14,~1988
12:00 Noon
City Manager's Conference Room
ITEM #1
HEALTH PLAN
Additional items if time permits
Cable T.V.
Credit Control Service Contract - Collections
Downtown Parking - Moreland
Smoking (Update)
Bingo
MEMORANDUM
November 3, 1988
TO: SUE WHITFIELD, PERSONNEL MANAGER
SUBJECT: HEALTH BENEFIT PLAN INFORMATION
The Budget and Finance Committee will be meeting again to discuss the
Health Benefit Plan. The following ,information has been requested for the
meeting. Please arrange to have it completed. Contact me if there are
difficulties with obtaining the information.
1. Chart depicting the number of active and retirees in the
fee-for-service and the HMO Plan. This should be a comparison that
demonstrates the "death spiral." (Margaret Ursin has kept records of
this.)
2. A list of reasons for not considering self-insurance. (Either Margaret
or David McCleerey should readily be able to provide a list.)
3. A comparison chart on rates similar to attached.
4. An explanation of our rationale on the dental recommendation.
MS:jp
Attachment ~
cc: Dale Hawley
Margaret Ursin
Jon Ellis
John Stinson
NOEMAL' Si.i92,579.i6 $i,449.405.53 $1.i85.411.76 ', $i01,254.36 $122,714.i6 S!22,714.16 : $i.50i.833.52 il,572.117.69 $t.308,!25.92
'** AItOUNT $0.00 $0.00 $0.00 ' $0.00 $0.00 $273,774.61 ', $0.00 $0.00 S273.774.61
HEHBER COOTS S206,955.24 $252.090.13 $65,160.68 ~181.042.98 $299.906.09 $255.385.55 ', $38V.9%.22 $551,996.82 $320,546.23
TOTAL 6LUECROSS $i,599,552.40 $1,701,494.26. ii,250,572.44 S547.835.60 $422,620.25 $651,874.22 ', $1,747.;68.00 S2,124.i14.51 $1,902.446.76
HEALTH ~ET. - ''- · .~ · ' ..... · . '
NORNAL ............. $1,159.,451...76- $i,320,509..66-.. $1,3t4.523.08 $41,715.24 $47.189.76 .. $47,189.76 I- $1.181,167.00. 11,367,699.42.. $1.361.712.84 ............................. '
TDTAb-HEALIH ~EI $1,200 926.94 $1.589,g76.61 $i,592,153.56 $96,726.24 $109,300.65 $109,300.65 : $1,297,653.18. $t,499,27%26 $1,501,454.01 '
· . ..: . ";'.¢..~.....'.;..;~;..~J .... ;._ ...................................................................... ~ ................................
DENIAL ~ET ........................ .
, ..... · ;.' ''~;' ; ' ..~, ; ' .... I; ',,-. ; .. . .::.. : ' ''.' . ::.. .... ' .'. ~ ..,*.¢ ..'" '..'¢ '. * :". .'.~- .:.>.' '.", ·
· :.' .' _ ................. ~:...: ......:~L~:'...: ......... F. ............................................... · "' · · · · · '.'-- '...'..
.$0.0~-$0.00 .... I0.00 ............... $0.00 I0.00. 10.0&4 ..... 10.00 ........... $0.00 ........... $0.00 ...........................................
i "J: :::?":'F~E' DENT~L .
' ' '" .................. *'"* .......................... ' ................................................ ' ............................. : .................. ' .?.
..... IOlAb-FEE--DENTAL- .... $~48,.703.5B .... $185, ~00.48 -~--$183,672 .~2-..~ ............. $0.00 ............. $0.00 $0.00-, ....$14~,70~.58.---$18~,,00.4B ..... $18~,67,.32 ·
.................................................................. ~ ................................................ ~ ................................... . .............
TOTAL ALL ' " $2,95!,250.20 $3.493.273.9S' $3,039,95!.98 [ $444,561.84. $55i720.90 $761,174.97 : $3,375,812.04 $4,025,194.83 $3,801,126.95
CiTY OF BAKEP.-3FiELD ~ '
F~ C, ?CFj. ED P~R l
C' I T'F 'C l T Y C ? T Y M E!'iB C F< i"l E H B E R H E M G E R
C:ODq'L C.O~.TS CC,:'J'T ~. C:O~.T C:OS.T. . COST
" BLUE CROSS ', iNCR. 21.5% ', INC'R. 10.7% : ',
ACTIVE MEMBE~iS $1..192,579.16 ',$1.449.403.53 ',$]..1~5.411.76 [ ~ $2C, c..'953.24 $25.2 ,,D90. 73 $65.16C,.68
H.EALTH .NE% ...... ~. ' !NC:R. 1=~ ' iNCR 13% ' '
, . .... . .... ~ ........ ~'~ .... ~7~.~.__~.6.9 466.95 $77 650.28 '
RETIREE'S --. ', $41,715.24 ; $47,189.76 ', $47 189.7~, , , $55 011.00 $62.110.~9 $62.110.S~
ACTIVE MEMBERS "' ' ~ ~ ~ ' $0.00 $0.00 $0.00
----EEE..DENTAL .... ' ' INC 21.5% ' INC:R .... 10..7~ .... , ........
.?"' _~._ z_ z'i__.___ L-_ C~ ..... 2 ......................... 2 ............ ~ .... -. - ~ ·
1989 VS PARTTY : (~0_62) ....
' :. '9 x ~ ', :. ::.' '. :: '- . . · = · - . · .
........ .~lj~) 4Z~__EZ¢~J~ O_F FEE'S P_~,~ TO C:ZTY'5
.: · . . $273,774.61 (TOTAL COSTS OF $651,844.32
..:
C~T'f OF DFd~E25FZ£LD
PFC, F:OE.~ D PP~RZ T'F-
C: 0 E. ~ C. C' E: E. T 5 CC.' :2 '~ Z C 05 T C,D E. T
BLUE CROSS ', '~ iHCR. 21.='*'¢-0 ', iNCR. iC'.7:~ ,' ',
~CTi'v'E MEMBERS '. $i .192. 579. i6 ',$i.44'~.~C,~.5Z ',$i.1~.5.4L~.76 ', I SZC:6.g55.Z4 ~252 .,:,90. 73
F:.ETiREE'S : $~6~. 7q. 2 6.2 :, $122.~14 ~{.. :, :i.Z. gC..~E,E..7,~ ~: $iE~i C,42.1;.~:. $2:S'S'~9C,,2. C)9 ~255
RE'TIREE'S ', $41.715.24 ', $47,189.76 ', $47,189.76 ', [ $55.011.00 $62.110.89 $62.110.89
................ ,, ,,
ACTIVE MEMBERS $202,087.28 $216.602.58' ~ $213.555.86 ', ', $6,.00 $0.00 $6,.00
FEE.- DENTAL ' IiqC. 21.5~ ', INC:R. 10 .7r~ ~ ' .~
. ;:; ~,~: .~ ~ ' ." '.: - '" '...'('.; ' l
.,...;... :. ', , , , . :
. .. ... ~ . . . .
]9~ V% PARITY ___~_6z) · .
· ,..-. _.. .-. _ ~. . :
r~, '~' AMOUNT $0.00 $0.00 $O.-OO * SO.Q0 $0.00 $273,774.6i ; $0.00 $0.00 $27S.774.61
~:: TOTAL 8LUECR05$ [i,3~9.532.40 $i,701,494.26 $1.250,572.44 ', $347.8~5.60 $422,620.25 $651.874.~2 ', $i,747.~[.00 $2.124.ii4.31 $1',902.446.76
'*~ TOTAL HEALTH'NET $1,200,g26.94 $1,389,976.61 $i~392,i53.36 J $96,726.24 $i09,300.65 $109,300.65 $i,297,653.18
~ ... .......... ~.._~ ................................. , ........... , ........................... ~ ....................
~[ - - I
Sv.vO- $0.00 ........... $0.00 ,,, ........... $0.00 ........ 10.00 10.00-, ............. 10,00 .......... $0.00 ............. Su. O0-
~'. .... CITY-COSTS ............................................ ' ........... :
}*J ....... TOTAL-FEE=DENTAL- ......$148,.703.58------$185,200,48 ...... $183,672.$2-.~ ...... L ....$0.00 ............. $0.00.~ ..........$0.00.. j.---$148,103.5~ ..... $185.200.48--.
~ TOTAL ALL $2,951,250 20. $3,49L273.93 $5,039,95!.98 ) $444,561.84 $5)1,920.90 $761,174.97 ) $3,395,812.04 $4.025.194.83
.'~
9
" PROPOSAL:
?
OPEN ALL MOU'S FOR NEW BENEFIT LANGUAGE: "
1. COST OF BENEFITS PAID BY EMPLOyEEs sAME IN EACH UNIT:
~"~ $2.31, $4.62 OR $6.92 PER PAY PERIOD
2. PLANS OF BENEFITS ARE:
INDEMNITY WITH COST CONTAINMENT, VISION AND
DRUG COVERAGE
OHMO WITH VISION AND DRUG
O INDEMNITY DENTAL
O PREPAID DENTAL
OR SUCH PLANS AS CITY AND EMPLOYEES AGREE TO,
FROM TIME TO TIME
(THIS WILL PERMIT SUBSTITUTION OF ONE PLAN OR
ANOTHER, FROM TIME TO TIME, WITH EMPLOYEE
NOTIFICATION)
3. FUTURE COST SHARING WILL BE NEGOTIATED ON A UNIFORM
BASIS, E.G. MAINTENANCE OF PRESENT DISTRIBUTION OF COST:
5% OF COST
4. AGREE TO MAKE BENEFIT CHANGES WHEN NECESSARY.
DISCUSS COST DISTRIBUTION ABOUT 11/1 EACH YEAR (ALL
UNITS AT SAME TIME)
BLUE CROSS HEALTH PLANS
If the City does nothing;current cost of:
$ 1,400,407, Active
347,836, Retired
$ 1,748,243
become $ 1,701,495 Active
422,621 Retired
$ 2,124,116 (+ 21.5% for 1/1/89)
Assume:
City pays 85% Active and 50% for Retired:
$ 1,446,271 Active
211,311 Retired
$ 1,657,582 City Payment
Proposed Changes:
1 - Blue Cross-Hospital PPO /~OO/~OO ~ ~
2 - $75,000 Claim Responsibility
3 - (No effect on ~O~1 cost), Redistribute rates to make
Active Blue Cross similar to Health Net.
4 - City pays higher % of Active Blue CrossJ and protects
Retiree from rate shift.
Plan Revision (1 & 2 above) reduces 1989 costs
from $ 2,124,116
to $ 1,902,412
$ 221,704 Gross savings
Revise Rates (Step 3)
$ 1,250,567 Active
651,845 Retired'
$ 1,902,412
Modify City Payment to make no difference between Active Health
Net and Blue Cross (Step 4). Assume Retirees pay 50% for Retiree
Premium and City pays increase resulting from distribution.
Current Retiree rate: $347,834
8.8% increase: $378,443
Retiree would have paid: $189,222 (50%)
Increase Retiree Rates to: $651,845
Increase after inflation sharing: $273,402
This is what City should pay to protect retirees: 42% of
Retirees Premium.
Amend City ordinance to provide for City payment of 42% of
Retiree Premium, then apply current service audit formula for
rate sharing.
Result of Rate Realignment:
Active Premium $1,250,567
City Pays 95% $1,188,039
Retiree premium 651,481
City Pays 42% - -273,402~ and 50% of balance 189,222
$1,650,663