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Home My WebLink About12/11/1991 BAKERSFIELD Patricia J. DeMond, Chair Lynn Edwards Mark Salvaggio Staff: Maureen Cotner AGENDA PERSONNEL COMMITTEE Wednesday, December 11, 1991 4:00 p.m. City Manager's Conference Room 1. Police Department Reorganization A. Police Captain Salary 2. 1992 Employee Benefits A. Health Care Option 1: Blue Cross and Health Net Option 2: Blue Cross and California Care Option 3: Health Net Point 'of Service and Health Net B. Dental Benefits K&R, HBI Prepaid Dental Plans 3. Self-Insurance (Information Only) PO 0 MEMORANDUM TO DAL~ ~AWT,~: CT~ SUBJECT POT. TCR DR~AR~ RRnRRANTZAmTnN THE INFORMATION INCLUDED HEREIN HAS BEEN PREPARED FOR COUNCIL INFORMATION AND ACTION AS SOON AS POSSIBLE. AS YOU ARE AWARE, WE HELD UP OUR REORGANIZATION PLANS PENDING THE COMPLETION OF THE CITYWIDE PERSONNEL AND CLASSIFICATION STUDY BY R.S.G., INCORPORAT- ED, TO GAIN THE BENEFIT OF THEIR INPUT. WITH THE IMPENDING MANAGEMENT RETIREMENTS THIS MONTH, THIS NEEDS TO BE REFERRED TO COMMITTEE FOR COUNCIL ACTION AT THE DECEMBER 18TH MEETING. THE GROWTH AND COMPLEXITY OF THE DEPARTMENT REQUIRES THAT WE REVIEW OUR PRESENT ORGANIZATIONAL STRUCTURE. THE RECENT RETIREMENT OF AN ASSISTANT CHIEF AND THE RETIES ON DECEMBER 31ST, OF AN ASSISTANT CHIEF AND TWO LIEUTENANTS PRESENTS US WITH AN EXCELLENT OPPORTUNITY TO IMPLEMENT THE NEEDED CHANGES. WE ARE PROPOSING THAT WE MAINTAIN OUR PRESENT MANAGEMENT STAFF AT 16 PERSONNEL. THIS WOULD CONSIST OF A CHIEF, (2) ASSISTANT CHIEFS, (3) CAPTAINS AND (10) LIEUTENANTS. THIS COMPARES WITH OUR PRESENT STRUCTURE OF CHIEF, (3) ASSISTANT CHIEFS AND (12) LIEUTENANTS. A SURVEY OF TWENTY-ONE MEDIUM SIZE CITIES IN CALIFORNIA, INDICATES THAT OUR TOP MANAGEMENT WOULD RANK 12TH IN SIZE AND OUR MIDDLE MANAGEMENT (LIEUTENANTS) WOULD RANK 16TH AMONG THOSE TWENTY-ONE CITIES, THUS STILL LEAVING US AS BELOW AVERAGE IN MANAGEMENT STAFFING. (SEE ATTACHED SURVEY) THIS NEW STRUCTURE HAS BEEN PRESENTED TO THE CITY'S CONSULTANTS DURING OUR PRESENT CLASSIFICATIONS STUDY AND THEY HAVE SUPPORTED OUR REDUCTION OF AN ASSISTANT CHIEF AND THE ADDITION OF THE CAPTAINS POSITIONS. THE REINTRODUCTION OF CAPTAINS IS CONSISTENT WITH OTHER LAW ENFORCEMENT AGENCIES AND WILL REDUCE THE PRESENTLY EXCESSIVE SPAN OF CONTROL OF OUR ASSISTANT CHIEFS. THIS NEW STRUCTURE WILL ASSIST US IN HANDLING FUTURE GROWTH. IT IS NECESSARY FORTHE CITY COUNCIL TO CREATE A PAY SCALE FOR T~E CAPTAIN POSITION. A POLICE COMMISSION APPROVED JOB SPECIFICATION ALREADY EXISTS. THE PRESENT PAY SPREAD BETWEEN THE ASSISTANT CHIEFS AND LIEUTENANTS DOES NOT ALLOW THE INSERTION OF THE POLICE CAPTAIN POSITION. A MINIMUM SPREAD BETWEEN THESE POSITIONS WOULD BE 10.2%, THUS ALLOWING TWO PAY STEPS. IN ORDER TO ACHIEVE THIS, WE ARE RECOMMENDING A 3.4% PAY ADJUSTMENT FOR THE CLASSIFICATIONS OF CHIEF AND ASSISTANT CHIEF. THIS WILL MAINTAIN THE PRESENT SPREAD BETWEEN THESE TWO POSITIONS AND ALLOW FOR A 10.2% OR TWO STEP SPREAD BETWEENCAPTAIN/ASSISTANT CHIEF ANDLIEUTENANT/CAPTAIN. DUE TO NUMEROUS PROMOTIONS IN WHICH OFFICERS WILL NOT BE AT TOP POLICE DEPARTMENT REORGANIZATION DECEMBER 2, 1991 PAGE TWO STEP, THIS PROPOSAL WILL NOT RESULT IN ADDITIONAL COST THE FIRST YEAR. THE TOTAL INCREASE COST TO THE CITY IF WE WERE NOT EXPERIENCING THE COST SAVINGS DUE TO RETIREMENTS WOULD BE $4,185 AND THIS WOULD BE AVAILABLE IN THE PRESENT POLICE BUDGET. I'VE ENCLOSED A TENTATIVE COPY OF OUR NEWORGANIZATIONAL STRUCTURE. THE BUDGETINGAND INTERNAL AFFAIRS FUNCTION WILL REPORT DIRECTLY TO THE CHIEF OF POLICE. THE TWO ASSISTANT CHIEFS WILL HAVE EXPANDED AREAS, COMPARED TO THE PREVIOUS THREE ASSISTANTS, HOWEVER WILL BE ASSISTED BYTHE CAPTAINS. THIS ADDED RESPONSIBILITYALSOJUSTIFIES THE 3.4% ADJUSTMENT THAT IS REQUIRED TO PROVIDE THE MINIMAL ACCEPTABLE PAY SPREADS. IT IS NOTEWORTHY THAT IN 1972, THE DEPARTMENT HAD A CHIEF, DEPUTY CHIEF AND FIVE CAPTAINS, AS WELL AS NINE LIEUTENANTS. THE SEVEN EXECUTIVE MANAGERS DIRECTED A DEPARTMENT WITH 156 SWORN OFFICERS VERSUS OUR PRESENTAUTHORIZED 242. OUR EXECUTIVE STAFF IS SMALLER, YETTHE DEPARTMENT IS NOT ONLY 55% LARGER BUT MUCH MORE COMPLEXAND DIVERSIFIED. RAP/JML/ik sTAFF SURVEY " JULY 1991 TOTAL CITY CHIEF AfC ~ PERCENT LT PERCENT SGT PERCEN~ SWORN ANAHEIM I 0 5 0.017 11 0.032 49 0.1~4 347' BURBANK I 0 4 0.034 10 0.068 lg 0.13 146 FREMONT I 2 3 0.028 6 0.028 28 0.13. 211 FRESNO I 3 3 0.016 16 0.037, 59 0.14 432 GLENDALE 1 I 3 0.030 9 0.054 32 0.19 168 HUNTINGTON BEAC 1 0 4 0.023 11 0.050 2g 0.13 2253 INGLEWOOD I I 3 0.024 12 0.058 32 0.15 207 LONG BEACH I I 12 0.023 27 0.045 99 0.16 602 MODESTO I 0 3 0.026 7 0.046 19 0.13 151 OXNARD 1 '2 0 0.020 5 0.033 16 0.11 150 PASADENA 1 0 4 0.023 12 0.054 31 0.14 221 RICHMOND I 1 4 0.033 g .0.049 28 0.15 184 RIVERSIDE I I 5 0.023 10 0.033 28 0.09 301 SAN BERNARDINO 1 1 3 0.021 12 0.051 37 0.16 235 SANTA ANA I 0 4 0.013 lg 0.048 56 0.14 400 SANTA BARBARA 1 1 3 0.036 7 O.051 14 0.10 137 SANTA CLARA I I 3 0.034 8 0.055 34 0.23 145 SANTA MONICA 1 0 4 0.030 8 0.048 25 0.15 166 STOCKTON I 3 5 0.034 12' 0.045 42 O. 16 267. TORRANCE 1 I 4 0.025 13 0.055 '29 0.12 238 AVERAGE 0.026 0.047 0.14 BAKERSFIELD I . 3 0 0.016 12 0.048 25 0.10 249 RANKING ...(21 CITIES) lgTH 12TH 20TH REORGANIZATION 1 2 ' 3 0.024 10 0.040 25 0.10 RANKING 12TH 16TH 20TH SURVEY INDICATES THE PERCENTAGE OF AGENCY PERSONNEL IN A PARTICULAR CLASSIFI- CATION AVERAGE AGENCY HAS 21.3% OF SWORN STAFF AS SERGEANT OR ABOVE BAKERSFIELD HAS 16.5% OF SWORN STAFF AS SERGEANT OR ABOVE MEMORANDUM TO: J. Dale Hawley· FROM : Insurance Committee BY: Craig Henderson DATE : December 6, 1991 SUBJECT : Health Insurance Provider Recommendation The Insurance Committee has met on at least a monthly basis to discuss changes to the City's Health and Dental Plan coverage. On October 1, requests for proposals (RFPs) were sent out to three Indemnity only companies, four HMO only companies, twelve companies who provide both Indemnity and HMO plans, and two self-funded administrators. On November,l,' we had received two Indemnity proPosals, six HMO proposals, and two Point of Service (POS) proposals. At the October meeting, a sub-committee of four, plus myself, was selected to review all the proposals and submit a recommendation at the next meeting. The sub-committee met three times in Nov- ember and discussed the merits of each proposal, individually and collectively. Also,.three members of the sub-committee went on a fact-finding tour of HealthNet's Headquarters in Woodland Hills, CA, on November 6. They were given an informative tour of the various departments and a detailed overview of the new Point of Service plan that becomes viable in January, 1992. During this time period, November 4 through November 13, the Consultant was in contact with all the respondents; obtaining clarification on certain points, as well as asking if they would re-examine the information and reduce the premiums. In a meeting with HealthNet on November 11, and ~after numerous phone calls, HealthNet revised their numbers twice; the second set coming just minutes before the Novemherl3 insurance meeting. Their final numbers were: Original Proposal* Final Proposal* ACTIVES 12% increase 9% increase RETIREES UNDER' 65 62% increase Avr. 8% increase RETIREES OVER'65 75% increase 36% increase · Percentage increase or decrease as compared to'current 1991 Health- PTat rates. In a November 13 meeting with Kafser, they offered the following reductions from the original proposal: Original Proposal* Final Proposal* ACTIVES 27% increase 17% increase RETIREES UNDER 65 19% increase 24% increase RETIREES OVER 65 22% increase 13% increase *Percentage increase or decrease as compared to current 1991 HealthNet rates. Blue Cross' proposal rates on CaliforniaCare Plan and the Indemnity Plan based on full takeover are: -CaliforniaCare Plan premiums are a two to three percent (2 to 3 %) decrease for Actives and Retirees under and over 65 when compared to HealthNets 1991 rates. -Indemnity Plan rates are: Actives thirty-eight percent (38%) increase, Retirees eight point ninety-eight percent (8.98%) decrease and Indemnity Dental is reduced eight point twenty-one percent (8.21%). ACTIVE RETIRED DENTAL TOTAL MEDICAL MEDICAL Contracts in ~orce: 517 99 535 ~ Current Rate Level Premium 1,600,810 404,.910 338,652 2,344,372 Loss Ratio 93.66% 60.42% 72 52% 84.87% Change in Reserve 5.67% 0.76% 1 19% 3.92% Incurred Claims 99.34% 59.66% 73 71% 88.78% Trend as % of Adjusted Premium 25.03% ~ 17.98% 10 39% 20.21% Margin, Retention & Pooling 21.21% 13.38% 7 69%, 17.90% Percentage Increase Required 45~57%* (8.98%) (8 21%) 26.89% Required Subscription Income 2,330,379**368,558 310,849 3,009,786 *Blue Cross redu~c~d Actives required income to thirty-eight percent (38%)' **Required Subscription Income at thirty-eight percent (38%) is $2,209,118 -2- The sub-committee, together with the Insurance Committee,, addressed changing benefit levels, and short and long term survival of the Blue Cross indemnity plan... Both groups felt that a four percent (4%) to ten point five percent (10.5%) reduction in the proposed Active increase wasn't sufficient in relation to what the employee's would be losing in benefits under a $250 deductible, 90/70, $4,000 stoploss. They also felt very strongly that on the short-term (one year) Blue Cross' proposal was the only way to proceed. The long-term (three to. five years) looked brighter and more realistic in beimg able to keep an indemnity plan on-line by going with Blue Cross. This point was later affirmed by Blue Cross representatives at the November 19 meeting. At the November 13 meeting of the Insurance Committee, the sub- committee reviewed the merits of each proposal and compared the premium cQsts. Some of the reasons for dropping a proposed Provider from consideration are: TAKE CARE -Not currently licensed in Bakersfield and Physician contracts have not been completed. HEALTH PLAN -Very high rates for Retirees - Over 100% in under 65 and 83% in over 65 of existing rates. KAISER PERMANENTE -Higher rates for Actives and Retirees for similar services. -Point of Service proposal - these benefits are not available to Retirees over 65 or who receive Medicare benefits. FOUNDATION HEALTH -Very high rates for Retirees - over~ll0% in under 65 and 106% over 65. MUTUAL OF OMAHA -Contract' rat~s are higher for lessor benefits. $150 deductible, 90/10 $5,000 .stoploss within PPO and.outside providers a $2.50 deductible, 70/30 $5,000 stopioss. After sharing the informa'tion, and debating all the proposals, the sub-committee unanimously chose Blue Cross Indemnity Plan and Blue Cross' CaliforniaCare Plan. Some of the reasons that were discussed as'to why Blue Cross would want the whole group are: -HMO is a valuable piece of. business -Mature HMO group...Underwriters are very comfortable with, taking an existing long-term plan that has. steady~utiliza- tion patterns -3£ -Blue Cross adds seven hundred fifty (750) new insureds, plus dependents -Broadens Blue Cross' economic base in Bakersfield and throughout the state ~ -Economics of scale .... having both pieces, improves Blue 'Cross' cost controls and profit -Having the City of Bakersfield is a Valuable' marketing tool -Historically, our Indemnity Plans have been an excellent piece of business -Blue Cross knows that when benefits change and/or rates increase, there is movement from an Indemnity Plan to the HMO plan, 'and they want to be on the case as that occurs The second choice was the HealthNet Point of Service Plan, and the ex%sting HealthNet HMO Plan. The Committee voted unanimOusly to accept the sub-committe's recommendation of Blue Cross under the following conditions: -That the Blue Cross Indemnity Plan Proposal have no change in benefit ~levels; -A reduction in the proposal forty-eight percent (48%) increase in Active rates (asking 'for at least a ten point decrease) to thirty-eight percent (38%); -The Retirees and Indemnity Dental Plans to be adjusted . according to their own experience. '' Additionally, the Committee voted to have two 'presentations at their next meeting. On November 19 and 21, the Insurance Committee met with Blue Cross and H~ealthNet representatives who made detailed presentations. After reviewing all the information and seeing that Blue Cross met all the stipulated conditions; the Committee, on ~November 2ol, endorsed the Blue' Cross Indemnity Plan and the CaliforniaCare Plan as our sole provider. The Committee, as a whole, was very firm in its commitment to keeping the indemnity plan for the short and long term. They feel very strongly that, .at this time, Blue Cross' proposal offers their best and only opportunity to attain this goal. Another important benefit with Blue Cross having the HMO coverage is that the indemnity plan enrollment percentage can decrease some without any concern that the plan would be terminated. They further recognize that at some ~ point, in the very near future, they will have.to make significant benefit adjustments to keep the indemnity plan affordable and cost effective or bring on its rapid demise. Further, in order to insure that the HMO premium rates CANNOT escalate to an exhorbitant amount, a letter has been secured from Blue Cross placing a maximum increase of sfxteen percent (16%) for the '1993 policy year. The Insurance Committee requests acceptance and approval of its recommendation to implement Blue Cross' Indemnity Plan and CaliforniaCare 'Plan. CAH: kh -5- E BEJARANO, Blue Collar Umit LOUIS~E CLOSS, Assistant City Attorney 'CHAEL CONNOR, General Supervisory MAUR~E~ COTMER, Personne! Manager -KE LEE, White Col~lar Unit GRff~ORY KLIMKO ~inance Director E .~/~ZANO, Ma~g~ent Unit CATHY WILLIAM, Benefits Technician 'KE MATHIS, Fire Unit CRAI.G ~NDERSON, Consultant RM ~ILE'Y-, Re~tire~ ~roup/ '~ ~0UBE-E-, Poli~ Su~arvisory Unit RRY ~ ~p . olice Unit ~UCK WADE, S.E.~.U. City Representa~ive -6- CITY OF BAKERSFIELD CITY/EMPLOYEE INSURANCE COMMITTEE 1992 HEALTH PLAN PROVIDERS OPTION RECOMMENDATIONS NEW RATES WITH CURRENT COVERAGE NO CHANGE FIRST CHOICE SECOND CHOICE TO COVERAGE OPTION OPTION single ~:~;~?~??~??~::~:??~ ~:??~?~??~?~??~;?~;~;;~?~ $167.68 $122.03 $157.60 108.85 ~5~' $158.08 $122.03 ~ ~ ~:~~:~ 47o/. 9% 38o~ -3o/c 380/o 9o/0 2-Party ~::~:~?~?~:~6~?~ ?:~:::~??~:~?~::~?::~??~::$223{~?:~ $332.45 $243.43 · $312.48 $217.73 "~ $316.14 $243.43 2~Party ?~?~?~?~??~ ~?~ ?~?~?~?~??~?~?~?~?~?? ~?~:~?~?: $390.50 $243.44 $387.18 $218.90 $395.18 $243.44 Family ~:?.~$638~67: ~?????:~?~?:~?~3~63~ $585.74 $353.73 $580.76 $307.74 $574.04 $353.73 HMO = Health Maintenance Organization FFS = Fee for Service (Indemnity) Plan City of Bakersfield Health Care Analysis Calendar Year Total Premiums Active Members Only 1991 Cai Care Health Net HMO Health Net HMO Unit Current & Blue Cross Increase & Health Net POS Increase & Blue Cross FFS Increase Blue Collar 1 999,758 1,078.913 79.155 1,145~258 145,500 1,172.837 173,079 VVhite Collar 2 932.787 1.054,369 121.582 1.099,110 166,323 1.137,880 205.093 Fire 3 446.277 513,867 67.590 531.761 85.484 553.297 ! 07.020 Police 4 842,854 989.578 146,724 1,013,143 170.289 1.061.438. 218,584 General Supervisory 5 368,938 437.122 68.184 447.152 78,214 468,209 99.271 Fire Supervisory 6 189,936 · 223.954 34,018 22~.088 39.152 240.241 50.305 Police Supervisory 7 102,875 125,026 22.151 126.277 23.402 133.397 30.522 Management 9 294.298 . . 364.163 69.865 365,983 71.685 387.862 93.564 30. I Council / 38,327 7,579 38,587 7.839 40,750 10.002 1 0 748 'rot 4 .............. ' .............. ................. .......... ......... =_~-.=/.J~=~. ......... ~. .... .-' ~-'_-.~ ~..:~'.~-~. ............... .~_-=_-' .......... . ....... -_--~-~.-~.._--~-_ -=_-~-__=._==____..__.=..' .._._=:_ ........ ..--~_- ................. -.~.~ .... .~, :_--_...~.~:=. .............. .= Please note: Estimates are based on employee count per plan option as of pay period ending November 17. 1991. Current 1991 estimates are baSed on pay period ending November 17. 1991 payments, annualized, These calculations assumes that there are no permium increases in dental care. P! ::F, 3' e,J B',: ,JJ Ei!'S ;ile ~ ;~h~e: MTF'r~,o.J 1 CITY/EMPLOYEE INSURANCE COMMITTEE 1992 HEALTH PLAN ~PROVIDERS OPTION RECOMMENDATIONS OPTION I: NEW RATES WITH NO CHANGE TO CURRENT COVERAGE BLUE CROSS FFS and HEALTH NET HMO CURRENT',;'~i'~'~i ~D~h~'~i~i'~iii',i'~i:~i'~i~iii'~iii'~i'~i'~ 20% MONTHLY ' 25% ' MONTHLY ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: :~:~:~:~:~:~:~:~:!:~i:ii!:!i~:i~:~ ;PREMIUMS ~~iiiiiiiiiiiiiii~iii~i~i EMPLOYEE CONTRIBUTION' EMPLOYEE coNTRIBUTION BLUE CROSS.(FFS) Employee City Total Employee .City Total 2-Pa~y ~~?~?~??~?~?~~?~ $66.49 $265.96 $332.45 $83.11 $249.34 $332.45 HEALTH NET (HMO) Single iiiiii?~i~iiiii:.iii!iiiiiii$1~iti~li~65iill ilililililiiii?~iiiiiiiiiii::iiiiiiiiiiiiili$2~:~iii $24.41 $97.62 $122.03 $30.51 $91.52 $122.03 Family i!i!i!iii!ii!iiii!iiiiiiiii~i~i!!i~:ii!!iiiiii!!iiiii!iiii!!!iii~i!i!i!iiii!ii~ii~ii!!~i~i!~`i~!i!~, $70.90 $283.61 $354.51 $88.63 $265.88 $354.51 City of Health Care Analysis Calendar year Total Premiums Active Members only Split: City 80961 Employee 20~ 1991 Current 1992 Health Net & Blue Cr°ss Increase (Decrease) Unit Employee City Total Employee City Total Employee City Total Blue Collar 1 ' 118,157 881,601 999,758 234,544 938,293 1,172,837 116,387 56,692 173,079 White Collar 2 112,372 820,415 932,787 227,581 910,299 1,137,880 115,209 89,884 205,093 Fire 3 52,702 393,575 446,277 110,663 442,634 553,297 57,961 49,059. 107,020 Police 4 102,126 740,728 842,854 212,294 849 143 1,061,437 110,168 108,415 218,583 General Supervisory 5 51,610. 317,328 368,938 93,677 374,532 468,209 42,067 57,204 99,271 Fire Supervisory 6 21,593 168,343 189,936 48,050 192,191 240,241 26,457 23,848 50,305 Police Supervisory 7 14,040 88,835 102;875 26,681 106,716 133,397 12,641 17,881 30,522 Management 9 47,840 246,458 294,298 77~574 310,287 387,861 29,734 63,829 93,563 Council 10 0 30,7.48 30,748 0 40,750 40,750 0 10,002 10,002 Total 520,440 3,688,031 4,208,471 1,031,064 4,164,845 5,195,909 510,624 476,814 987,438 Split: City 75°/6 / Employee 25% 1991 Current 1992 Health Net & Blue Cross Increase (Decrease) Unit Employee City Total Employee City .Total Employee City Total Blue Collar 1 118,157 881,601 -999,758 293,143 879,694. 1,172,837 174,986 (1,907) 173,079 White Collar .2 112,372 820,415 932,787 264,451 853,429 1,137,880 172,079 33,014 205,093 Fire 3 52,702 393,57.5 446,277 138,317 414,979 553,296 85,615 21,404 107,019 Police 4 102,126 740,728 642,854 265,350 796,088 1,061,438 163,224 55,360 218,564 General Supervisory 5 51,610 317,328 368,938 117,090 351,119 468,209 65,480 33,791 99,271 Fire Supe.rvlsory · 6 21,593 168,343 - 189,936 60,058 180,183 240,241 38,465 11,640 50,305 Police Supervisory 7 14,040 88,835 102,875 33,349 100,048 133,397 19,309 11,213 30,522 Management 9 47,840 246,458 294,298 96,964 290,897 387,861 49,124 44,439 93,563 Council 10 0 30,7'48 30,748 0 40,750 40,750 0 10,002 10,002 Tota 520,440 . 3,688,031 4,208,471 1,288,722 3,907,187 5,195,909 768,282 219,156 987,438 Please note: Estimates are based on employee count, per plan option as of pay period ending November 17, 1991. Current 1991 estimates are based on pay period ending ~' November 17, 1991 payments, annualized. These calculations assumes that there are no permlum increases in dental care. Prepared By; JJ Ellis Prepared On; 12105191 File Name: MTPROJ2 CITY/EMPLOYEE INSURANCE COMMITTEE 1992 HEALTH PLAN PROVIDERS OPTION RECOMMENDATIONS OPTION I1: BLUE CROSS FFS and CALIFORNIA CARE HMO ~?~?~~ ~~ 8°~0 EMPLOYER CONTRIBUTION 75~o EMPLOYER CONTRIBUTION BLUE CROSS (FFS) Employee Ci~ 'Total Employee Ci~ Total Single ~ $~;:~2i~ ~::~::~;:~::~:~::~$2~ $31.52' $126.08 $157.60 $39.40 $118.20 $157.60 ~~ji~ ~~:~ 64% 38o/~ 105% 38o/~ Family ~ ~?'??~??~?~??~:~ ~ ~ $94.56 $378.23 $472.79 $118.20 $354.59 $472.79 CALIFORNIA CARE (HMO) Single ;~$;i ~;!~!~;65~ ;?~?:~$2]~5~ $21.77 $87.08 $108.85 $27.21' $81.64 $108.85 2-Pa~y ~~~~ $43.55 $174.18 $217.73- $54.43 $163.30 $217.73 ~;~ii~ ~ ~ ~;~ 14°/o -3%0 43o~ -3%0 Family ~~ ~?~?~?~~ $63.26 $253.03 $316.29 $79.07 $237.22 $316.29 City of Balk~ld Health Care AnalysiS Calendar Year Total Premiums Active Members Only. Split: City 80% I Employee 20% 1991 Current 1992 Cai Care & Blue Cross Increase (Decrease) Unit Employee City Total - Employee City Total Employee City Total Blue Collar 1 118,157 881,601 999,758 215,756 863,157 · 1,078,913 97,599 (18,444) 79,155 White Collar 2 112,372 820,415 932,787 210,880 843,489 1,054,369 98,508 23,074 121,582 Fire 3 52,702 393,5'75 446,277 102,775 411,092 513,867 50,073 17,517 67,590 'Police 4 102,126 740,728 842,854 197,920 791.658 989,578 95,794 50,930 146,724 General Supervisory 5 51.610 317,328. 368,938 87,460 349,662 437,122 35,850 32,334 68,184 Fire Supervisory 6 21,593 168,343 189,936 44,792 179,162 223,954 23,199 10,819 34,018 Police Supervisory 7 14,040 88,835 102,875 25,006 100,020 125,026' 10,966 11,185 22,151 Management 9 47,840 246,456 294,298 72,834 291,329 364,163 24,994 44,871 69,865 Council 10 0 30,748 30,748 0 38,327 38,327 0 7,579 7,579 Total 520,440 3,688,031 4,208,471 957,423 · 3,867,896 4,825,319 436,983 179,865 616,648 Split: City 75% I Employee 25% - 1991 Current 1992 Cai Care & Blue Cross Increase (Decrease) Unit Employee City Total Employee City Total Employee City · Total Blue Collar 1 118,157 ~. 881,601 999,758 269,663 809,250 1,078,913 151,506 (72.351) 79,155 White Collar 2 112,372 820,415 932,787 263,573 790,796 1,054,369 151,201 (29,619) 121.582 Fire 3 52,702 393,575 446,277 128,458 385,409 513,867 75,756 (8,166) 67,590 Police 4 102,126 740~728 842,854 247,380 742,198 989,578 145,254 1,470 146,724 General SupervisorY 5 51,610 317,328 368,938 109,318 327,804 437,122 57,708 10,476 68,184 Fire Supervisory 6 21,593 168,343 189,936 55,985 167,968 223,953 34,392 . (375) 34,017 Police Supervisory 7 14,040 88,835 102,875 31,255 93,772 125,027 17,215 4,937 22,152 Management 9 47,840 246,458 294,298 91,037 273,126 · 364,163 43,197 26,668 69,865 Council " 10 0 30,748 30,748 0 38,327 38,327 0 7,579 7,579 Total 520,440 3,688,031 4,208,471 1,196,669 3,628,650 4,825,319 676,229 (59,38!) 616,848 Please note: Estimates are based on employee count per plan option as of pay period ending November 17, 1991. Current 1991 estimates are based on pay period ending November 17, 1991 payments, annualized. These calculations assumes that there are no permlum increases In dental care. Prepared By; JJ Ella Prepared On; 12/05191 File Name: MTPROJ2 CITY/EMPLOYEE INSURANCE COMMITTEE 1992 HEALTH PLAN PROVIDERS OPTION RECOMMENDATIONS OPTION II1: HEALTH NET POINT OF SERVICE FFS AND HEALTH NET HMO HEALTH NET POINT OF SERVI Employee Ci~ Total Employee CiW Total CALIFORNIA CARE (HMO) ==================================================================== =================================================================================== City Health Care Analysis Calendar Year Total Premiums Active Members Only Split: City 80~ ! Employee 20~ 1991 Current i992 Health Net & Health Net POS Increase (Decrease) Unit Employee City Total Employee City Total Employee City Total Blue Collar I 118,157 881,601 999,758 229,027 916,231 ~ 1,145,258 110,870 34,630 145,500 White Collar 2 112.372 820.415 932,787 219,828 879.282 1.099,110 107.456 58,867 166,323 Fire 3 52,702 393,575 446.277 106,357 425,405 531,762 53,655 31,83[~ 85.485 Police 4 102,126 740,728 842,854 202,634 810,508 1,013,142 100,508 69,780 170.288 General Supervisory 5 51,610 317,328 368,938 89,466 357,686 447,152 37,856 40,358 78,214 Fire Supervisory 6 21,593 168,343 189,936 45.819 183.269 229,088 24.226 14,926 39.152 Police Supervisory 7 14,040 88,835 102.875 25,257 101,020 126,277 11,217 12.185 23.402 Management 9 47,840 246,458 294,298 73,198 292,785 -365.983 25,358 46.327 71.685 Council 10 0 30,748 30,748 0 38,587 38,587 0 7,839 7.839 Total 520,440 3,688,031 4,208,471 991,586 4,004,773 4,996,359 471,146 316,742 787,888, Split: City 7596.1 Employee 25% 1991 ~urrent 1992 Health Net & Health Net POS Increase (Decrease) Unit Employee City Total Employee City Total Employee City Total Blue Collar I 118,157 881,601 999,758 286,250 859,008 1,145.258 168,093 (22,593) 145.500 White Collar · 2 112,372 820.415 932,787 274,761 824.349 1,099,110 162,389 3.934 166,323 Fire 3 52,702 393,575 1446,277 132,936 398,826 5311762 80,234 5,251 85,485 Police 4 102,126 740,728 842,854 253,278 759.864 1.013,142 151,152 19,136 170.288 General Supervisory 5 51,610 317,328 368,938 111,827 335,325 447,152 60,217 17,997' 78.214 Fire Supervisory 6 21,593 168,343 189.936 57,270' 171,817 229.087 35,677 3,474 39.151 Police Supervisory 7 14,040 88,835 102,875 31,569 94,708 126.277 17,529 5,873 23,402 Management 9 4Z,840 246,458 294,298 91,495 274,488 365,983 43,655 28,030 71,685 Council 10 0 30,748 30,748 0 38,587 38.587 0 7,839 7.839 Tota 520,440 3,688,031 4,208,471 1,239,386 3,756,972 4,996,358 718,946 68,941 787,887 Please note: Estimates are based on employee count per plan option as of pay period ending November 17, 1991. Current 1991 estimates are based on pay period ending November 17, 1991 payments, annualized. ' These calculations assumes that there are no permlum Increases In dental care. Prepared By; JJ Ellis Prepared On; 12/05191 File Name: MTPROJ2 SunAmerica Securities, Inc. blern~r NASD and SIPC 2200 G Street Bakersfield, California 93301 (805) 322-2522 December 5, 1991 f ~% SunAmerica Securities A SunAmerica Company J. Dale Hawley City Manager City of Bakersfield 1501 Truxtun Avenue Bakersfield, CA 93301 Dear Mr. Hawley: The Insurance Committee has met several times throughout the year to discuss and find a Den'tal Plan superior to the current Dental Net Plan. Requests'for Proposals (RFPs) were sent 'ou't, and two (2) proposals were received from K&R Dental and HBI Dental, respectively. These proposals were reviewed, the facilities visited and the matter was then voted on. In September, six (6) members of the Insurance Committee toured six (6) dental offices. They 'interviewed the dentists, when possible, and the office personmel. These dental offices were ~elected randomly, (i.e., three (3) from each plan). After viewing~the offices, the six (6) committee members discussed their impressions ~andidly. The concensus was that HBIs facilities were mewer, had a more professional atmosphere,, and the dentists themselves were more established and less transient. Ultimat.ely, the question of which plan to choose was presented, and a straw vote taken. Two (2) members felt we shouldn't choose just one (1) provider, but would be better served by choosing both K&R and HBI. The feeling was this would allow'employees more alternatives. Three (3) 'other members felt we should pick only one (1) dental plan to ~provide and service employees; pointing out it would be easier for staff to administer amd monitor J. Dale Hawley December 5, 1991 Page 2 benefits, and emplo.yees' would have only one schedule of benefits and co-payments to understand, lessening frustration and confusion. Ail of the members felt that either plan could handle all of the City's employees and their families. I remained impartial. At the September 26 meetfng, the findings and impressions of the interview team were expressed and discussed at length. After all opinions were expressed, a vote was taken and by a margin of one (1) vote, the Insurance Com- mittee chose to recommend both K&R Dental and HBI Dental. If a vote had been taken choosing one plan over the other, based tot'ally on tone and opinions expressed, it is my feeling HBI would have prevailed. The Insurance Committee requests acceptance and approval of its recommendation to implement the K&R Dental Plan and the HBI Dental Plan Respectfully submitted, THE HENDERSON GROUP CRAIG A. HENDERSON CAH:kh cc: Maureen Cotner Insurance Committee Members PROPOSED DENTAL RATES HBI DENTAL OPTION I OPTION II Bi-Weekl~ Monthly Bi-Weekly Monthly SINGLE $ 6.96 $ 15.08 $ 5.80 $ 12.50 TWO PARTY $ 13.88 $ 50.07 $ 12.00 $ 25.99 FAMILY $ 20.57 $ 4~.56 $ 17.47 $ 37.85 K & R DENTAL OPTION I* OPTION ,II Bi-Weekly Monthly Bi-Weekly Monthly SINGLE $ 5.44 $ 11.78 If the City decides to contract with K&R Dental TWO PARTY $ 10.89 $ 23.60 and another pre-paid HMO, and the rates of the other FAMILY $ 16.33 $ 35.38 HMO are higher, K&R~would then expect to be paid at * THESE RATES APPLY ONLY IF K&R IS SOLE PROVIDER ~ the higher rates of the other HMO. ~.,.~ .~ HBI DENTAL PLAN PREMIUMS FOR THE CITY OF BAKERSFIELD OPTION I=(b) Adult and Dependent Orthodontic Coverage Bi-Weekly Rate Monthly Rate Single $ 6.96 $15.08 Two Party $13.88 $30.07 Family $20.57 $44.56 C'omposite Rate $17.20 $37.26 OPTION I:(b) in addition .to a very comprehensive dental care program, provides an Orthodontic benefit for Subscribers and Eligible Family Members. Treatment Copayment Records .................................................. $200.00 Phase I ...... $600 00 Phase II~'~~~.~~~.~.~~$1,200~00 Retention ................................ · ............. i..$100.00 Cases extending beyond the 24th month per month.. ............................................... $35.00 The patient must be referred by.the HBI general provider. ORTHODONTIC EXCLUSIONS & LIMITATIONS * Orthodontics requiring treatment of a cleft palate * Treatment already in progress at the time of. initial enrollment * Retreatment of orthodontic problems which fail to respond to normal treatment and/or retention * Surgical Orthodontics to include specialized ,surgical preparation '* Extractions for orthodontic purposes * In the event that an enrollee ceases to be eligible during the course of treatment, treatment shall be completed on the basis of the usual and customary fees in use at the time for the remaining portion of.treatment and will be the. responsibility of the enrollee -12 (b) - DENTAL PLAN, INC. 0 MEMBER PLAN BENEFITS COPAYMENT Ora [ Surgery Single Extractions No Charge Surgical Extractions No Charge Tissue impaction No Charge Partially bony impaction No Charge. Complete bony impaction No Charge Intra-oral I.C.D. of abscess No Charge Local anesthetics No Charge Orthodonti cs Includes comprehensive orthodontic treatment, $1395' generally utilizing Edgewise technique, multibanded (bonded) appliances, necessary supplemental devices required (Headgears, nance arches); DOES NOT INCLUDE X-RAYS Case study and diagnosis $250 Retainers (each) $100 Missed appointments (This fee will be waived $15.00 in the event of an unforseen emergency.) - 6 - MEMORANDUM TO: J. Dale Hawley FROM : Craig A. Henderson SUBJECT : Self-Insurance DATE : December 10, 199i Self-funding is an. alternative to conventional insurance plans that can offer greater cash flow control, premium tax savings and flexi- bility of plan design; also, better awareness of medical, benefits and costs on employee's part. There isn't a set number that when reached makes a self-funding plan impractical. It depends more on the age, health and experience of the group. One hundred (100) ~ could be fine and three hundred (300) too small. Some'of the inherent risks of self-funding are: -Reserve fund being Under capitalized -Not having stoploss coverage, both aggregate and individual -Assuming the financial.risk -If 'in a poor claims experience year the City decides to end the self-insurance program, then the City would have a runout expense to pay for at least three months while premium to new carrier is being paid Some of the steps necessary in preparing to make a self-funding decision: 1. Start process early (February or March); 2. Presentations from two or three administrators Who fully define and explain self-funding principles and practices; 3. Set higher deductible, co-payments and stoploss levels; 4. Review information and plans thoroughly; 5. Request proposals early (August or September). CAH:kh ~ttachment ATTACHMENT WHO~ SHOULD SELF-INSURE Successful self-insured plans have stable cash flow and 'a pattern of predictable claims. These groups also design their plans carefully, purchase appropriate stoploss coverage, and invest in communicating With individuals covered by the plan. CASH FLOW ADVANTAGES Self-funded plans achieve savings because they hold onto their dollars until claims are paid instead of paying premiums in advance. These funds become working capital, a source of investment income, rather than a monthly premium. The time lag from when claim checks are %ssued until they clear the plan's checking account provides another source of investment income. PLAN DESIGN CONTROL AND FLEXIBILITY Because self-funded plans are exempt from many state-mandated benefits, additional cost savings opportunities exist. Exemption from state mandates also permits smooth integration of cost containment measures. This'ability to manage health' care usage can result in additional cost savings. PREMIUM TAX SAVINGS Self-funded typically realize a 2-3 percent savings because they are exempt from premium taxes. (Not applicable to stoploss premiums). MANAGING RISK (STOPLOSS) According to a recent survey an increasing number of self-funded plans are purchasing stoploss coverage to limit exposure to large claims. AGGREGATE stoploss caps a plan's total annual payout for health care, generally at 125 percent of the City's annual estimated claim costs. INDIVIDUAL stoploss (also called specific stoploss) limits cost for an individual claim to a level or attachment point chosen by the City. Attachment~ points (deductibles) can range from $25,000 to $250,000 per person per year.