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HomeMy WebLinkAbout03/11/2009 Z-110 L 0 B A K E R S F I E L D I City Council members: Staff: John W. Stinson Ken Weir, Chair Assistant City Manager Irma Carson Zack Scrivner SPECIAL MEETING OF THE PERSONNEL COMMITTEE Wednesday, March 11, 2009 1:30 p.m. City Hall North - Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 AGENDA SUMMARY REPORT Meeting called to order at 1:46._ 02 PM 1. ROLL CALL Committee members present: Councilmember Ken Weir, Chair Councilmembers Irma Carson and Zack Scrivner City staff present: Alan Tandy, City Manager John W. Stinson, Assistant City Manager Rhonda Smiley, Assistant to the City Manager Steven Teglia, Administrative Analyst— City Manager's Office Virginia Gennaro, City Attorney Joshua Rudnick, Deputy City Attorney Stanley Grady, Development Services Director Pamela McCarthy, City Clerk Sandra Jiminez, Assistant Finance Director Javier Lozano, Human Resources Manager Ginger Rubin, Benefits Technician Retired employees: Margaret Ursin Others present: Chuck Waide, SEIU Local 521 Chris Kim and Tom Morrison — Segal Company Members of the media S:\Council Committees\2009\Personnel\March\March 11 ASR.doc JWS:al Page 1 2. ADOPTION OF JULY 23,2008 AGENDA SUMMARY REPORT Adopted as submitted 3. PUBLIC STATEMENTS None 4. NEW BUSINESS A. Discussion regarding .Health Insurance Renewals and Health Plan Cost Reduction Options Stinson Lozano Tom Morrison with Segal Company distributed a report and gave a summary of the data contained within it. The information included an update on benefit issues and the projected rate of increase for employee and retiree for benefits for calendar year 2010. There are also updates regarding related legislation, including information on a subsidy for COBRA participants incorporated in the economic recovery and revitalization act and a mental health parity act that was signed into law in 2008. Data was also provided that denotes specific cases and diagnoses that lead to high cost claims. Anthem Blue Cross indicates their rates will increase in excess of 5% in 2010. The Kaiser renewal is pending. Most health insurance companies are asking for increases that range from 5% to 16.5%. The Segal Company was directed by the City to prepare short- and long-term strategies to address the rising cost of health care premiums. Short-term strategies include implementing low cost plan options with incentives and alternative lower cost plans for retirees, automatically indexing co-payments and deductible to reflect further inflation, review lower cost options for dental plans, and eliminate dual coverage for employees or offer additional incentives for employees to discontinue spouse coverage under defined circumstances. Long-term strategies include a total compensation / defined contribution plan and disease management programs for major diseases. More detailed information on these strategies is contained within the booklet distributed at the beginning of the meeting. The current prescription program provides that the co-payment for a three-month supply obtained by mail order is the same as a one-month supply for a purchase made at a retail facility. The Segal Company recommends modifying the benefit on a two to one ratio. The Committee was informed that 15% of the people represent 70% of the total cost of claims, and most of those are under the age of 18. Discussions will now take place with the Insurance Committee to review the information. According to Human Resources Manager Lozano, a timeline is in place to return to the Committee in a timely manner with recommendations. SACouncil Committees\2009\Personnel\March\March 11 ASR.doc JWS:al Page 2 In response to a question from City Manager Tandy, Mr. Morrison with The Segal Company indicated that an aggressive program can yield a full 5% cost savings, which can effectively mitigate the rate increase. 5. COMMITTEE COMMENTS None 6. ADJOURNMENT The meeting was adjourned at 2:30:46 PM S:\Council Committees\2009\Personnel\March\March 11 ASR.doc JWS:al Page 3