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HomeMy WebLinkAbout11/03/2005 B' A:,K'E R"S i,~F I E' L.'. D /' ~/~ ~/~~ Harold Hanson, Chair Staff: Alan Christensen Zack Scrivner For: Alan Tandy, City Manager dacquie Sullivan AGENDA SUMMARY REPORT SPECIAL MEETING · PERSONNEL COMMI~EE Thursday, November 3, 2005 - 11:00 a.m. Ci~ Manager's Conference Room, Suite 201 Second Floor, Ci~ Hall, 1501 Truxtun Avenue, Bakersfield, CA 1. ROLL CALL Called to Order at 11:03 a.m. Present: Councilmembers Harold Hanson, Chair; Zack Scrivner and Jacquie Sullivan 2. ADOPT OCTOBER 4, 2005 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Review and Committee recommendation on Health Plan design changes Margaret Ursin, retiree, spoke regarding concerns with unblending the rates for actives and retirees covered under the California Care HMO plan. Morris Mahlmann, citizen, spoke regarding the City's Health and Pension Plans and urged the Committee and Council to compare benefits with what private business provides to employees. City Manager Tandy explained at the October 26th City Council meeting the Council reviewed the Personnel Committee Majority and Minority Reports as well as the recommendations from the Insurance Committee. At staff's request, the Council deferred action until the Insurance Committee and the Personnel Committee could both meet again. There were two major items of concern: 1) an employee based concern that the out-of-pocket maximum under the PPO plan being proposed had a maximum of $5,000 per person and if there were a circumstance where a whole family had to go out-of-network for medical care this would have a disastrous hardship on a Agenda Summary Report Page 2 Personnel Committee Meeting November 3, 2005 larger family; and 2) the Insurance Committee recommendation at that time did not contain incentives for people to use in-network providers and using out- of-network providers results in higher plan costs. The Insurance Committee met on November 1st and staff provided a compromise proposal based on combined recommendations from the Personnel Committee Majority Report and the Insurance Committee Report: Personnel Insurance Compromise HMO Plans Majority Report Committee Proposal Office Visit Co-Pay $15 $20 $20 Hospital Co-Pay $250 $0 $250 Emergency Room Co-Pay $100 $0 $100 PPO Plans Co-Insurance In/Out of Network 90%/60% 100%/80% 90%/60% In-Network--Out of Pocket Max $1,600 in $2,000 in $1,000 in Out-of-Network--Out of Pocket Max$5,000 out $2,000 out $3,000 out Hospital Co-Pay $250 $0 $250 Emergency Co-.Pay $100 $100 $100 Individual Deductible $250 $250 $250 Blue Cross Dental Prosthodontic Service 60% 80% 80% Cost of Plan Changes Compared to City Budget ($47,658) ($408,309) ($66,674) City Manager Tandy explained the Insurance Committee had many questions and concerns. Even with the $3,000 out-of-pocket maximum for out-of-network, the Insurance COmmittee had concerns that larger families were still exposed to disastrous out-of-pocket costs if in-network doctors were not available. The main issue was the Blue Cross PPO plan had individual out-of-pocket maximums. The Insurance Committee requested a family out-of-pocket maximum. Staff proposed to take approximately $34,000 and pumhase whatever family cap could be purchase for that amount to address this issue. An example would be to cap the out-of-pocket maximum at three or four family members, even if it were a family of six. Because of the City's older plan, Blue Cross has to file with the State before providing a definite answer if the family cap would be available for the current plan. The City Manager explained there is another issue. When emergency rooms get overcrowded, ambulances are diverted to the Heart Hospital, which is out of the Blue Cross PPO network. Staff is exploring with Heart Hospital the possibility of Agenda Summary Report Page 3 Personnel Committee Meeting November 3, 2005 providing emergency services to the City at the in-network rate in cases where the patient is notgiven a choice. In response to concerns expressed by Ms. Ursin regarding unblending active and · retiree rates, the City Manager explained the Personnel Committee made a recommendation to unblend the rates earlier in the year due to the new accounting requirements of GASB 43/45. The subsidy provided to retirees under GASB must be reported as an Unfunded liability. Unfunded liabilities must be addressed due to the detrimental effect' on the City's· credit and bond ratings. While it is true that unblending the rates will cause a substantial premium increase for retirees in the HMO plan, it is anticipated that the increase in rates will be phased-in over five years. City Manager Tandy expressed that he was hopeful the employee representatives would be receptive to the proposed compromise. Staff recommended the proposed compromise changes to the Health Insurance Plans outlined above, plus the approximate $34,000 for the family cap for the out-of- pocket maximum. If Blue Cross is unable to provide the family cap, the money could be applied to another element in the plan if the compromise plan is accepted. The compromise health plan changes and the family cap will cost the City $100,000 over the current budget. Chuck Waide, CCAPE, requested a recess to meet with the employee representatives. Committee Chair Hanson called the meeting back to order. Chuck Waide, CCAPE, spoke and·explained that the majority of the InsUrance Committee members were not in attendance, but the members in attendance have agreed to support the staff recommendation. Committee Member Sullivan made a motion to support the proposed compromise changes to the Health Insurance Plans as outlined by staff and the approximate $34,000 from the City for the family cap for the out-of-pocket maximum. The Committee unanimously approved the motion and requested staff to forward a report and the Committee's recommendation to the City Council at the November 9th meeting. 5. COMMITTEE COMMENTS Committee Chair Hanson expressed this was a very difficult task and thanked the representatives and management for working together. He requested that the Committee meet and come up with a better process before the review of the health plans next year. Agenda Summary Report Page 4 Personnel Committee Meeting November 3, 2005 6. ADJOURNMENT The meeting was adjourned at 12:15 p.m. Attendees: City Manager Alan Tandy; Assistant City Manager Alan Christensen; Assistant City Manager John Stinson; City Attorney Ginny Gennaro; Finance Director Nelson Smith; Police Captain Tim Taylor; Bill Ware, Police Department; City Clerk Pam McCarthy; Ginger Rubin, Human Resources Benefits; Mary Ellen Gonzales, CCAPE; John Patterson, CCAPE; Chuck Waide and Pete Rodriguez, SEIU-CCAPE; Margaret Ursin, retiree; Sandra Morris, retiree; Mike Schionning, Buck Consultants; Morris Mahlmann; and James Burger, The Bakersfield Californian cc: Honorable Mayor and City Council S:~AC\05PersonnelCom mitteeP05novO3summary.doc.