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Home My WebLink About09/30/2011• B,aKERSPIELD Staff: Steven Teglia, AssT. to the City Manager Citv Council members: Ken Weir, Chair David Couch Harold Har�son SPECIAL MEETING NOTICE PERSONNEL COMMITTEE of the City Council - City of Bakersfield Friday, September 30, 2011 9:00 a.m. City Hall North - Conference Room A 1600 Truxtun Avenue, First Floor Bakersfield, California 93301 AGENDA 1. ROLL CALL 2. ADOPT AU6UST 16, 2011AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Discussion and Committee Recommendation Regarding 2012 Nealthcare Renewal Rates - Teglia 5. NEW BUSINESS 6. COMMITfEE COMMENTS 7. ADJOURNMENT • BAKERSFIELD Citv Council members', .�i�_ Ken Weir, Chair Staff�, SS2Gen Teglia David Couch Assistant to the City Manager Harold Hanson SPECIAL MEETING OF THE PERSONNEL COMMITTEE Tuesday, AugusT 16, 2011 12:00 p.m. City Hall North - Conference Room A 1600 Tru#un Avenue Bakersfield, CA 93301 AGENDA SUMMARY REPORT Meeting called to order at 12:00 p.m. 1. ROLL CALL Committee members: Councilmember Ken Weir, Chair Councilmember David Couch Councilmember Harold Hanson ORAFr Ciiy staff: Alan Tandy, City Manager Steven Teglia, Assistant to the City Manager Rhonda Smiley, Assistant to the Ciiy Manager/PIO Chns HuoT, Administrative Analyst -City Manager's Office Nelson Smith, Finance Director Virginia Gennaro, City Attomey Jessalee Talley, Associate Attorney Rhonda Bamhard, Assistant Economic Development Director ChnsTi Tenter, Human Resources Manager Ginger Rubin, Benefits Technician Joe Bianco, Captain - Police DepartmenT Scott Miller, Police Detective / BPOA Jeff Mullich, Captain - Fire Department Tim Luken, Captain - Fire Department John Patterson, MainTenance Crafiworker-Fire Department/SEIU Retired employees/BCARE: Margaret Ursin, Bill Descary, Ralph Wenzinger, Patti Phoenix Gene Bogart, Flom Core, Fred Baugher, Robert Ennis, Charles Graviss Others presenT: Johnny Wu and Tom Morrison - Segal Company Chuck Waide and Madene Valdez SEIU Members of ihe media S'. \ Council Committees\2011 \ PerSOnnel \August\August 16 Agenda Summary Report - Final. DOCX Page 1 ST:aI 2. ADOPTION OF SEPTEMBER 29 2010 AGENDA SUMMARY REPORT Adopted as submitted A 3. PUBUC STATEMENTS '*+RqF� None 4. DEFERRED BUSINESS A. Discussion regarding 2012 Healihcare Renewal Rates City Manager Tandy said that staff is cautiousry optimistic about the changes proposed this yeac There is positive news for the majoriTy of retirees who are enrolled in a PPO plan in the form of a major rate decrease. For acTive employees enrolled in a PPO plan, there will be a minor rate increase. Most of the miscellaneous plans will remain stable. There is a proposal to reduce the S9�6 million retiree medical liability, that was previously unfunded due to budget constraints, to S1.4 million. As part of The Fiscal Year 2011-2012 Adopted Budget, the City Council approved a recommendation to set aside S3.0 million towards that liability. Plus, ihere is a possibility of an addiTional 53.3 million reductlon from another source; and when combined with a rate decrease, all factors will result in the reduced liability. Further, one minor change is being recommended to a mail-in prescnption plan, and a new plan is being recommended That may be more advantageous to those employees who currentry have dual insurance or who may be healthy and prefer a low-cost option. Tom Morrison, with Segal Company, distributed Information to the Committee and other attendees, and provided an overview of the maTeriaL Some highlights include: • There Is no increase proposed for ihe Anthem HMO plan for active employees. . The prescription mail order process under the Anthem PPO plan for active employees is proposed to change from one co-paymenT to iwo co-payments for a three-monYh supply of inedication. • The MThem PPO plan for retirees will decrease by 18J8°k� • Retirees enrolled in the Medicare Advantage plan will see a 9.2% increase, as directed by the federal government. • There is no increase proposed for ihe Kaiser HMO plan for active employees. Approximatery 20% of aciive employees are enrolled in this plan. S:\Council Commirtees\2011 \Personnel\AUgust\AUgusi lb Agenda Summary Report- FinqI.DOCX Page 2 Si:al ��A�T • There is a 7 7.6% increase proposed for the retirees who are enrolled in the Kaiser HMO plan and who are under 65 and not eligible for Medicare. • For those retirees who are enrolled in the Kaiser Senior Advantage Plan, there wiil be a 9.1 % increase, as directed by The federal government. • Employees enrolled in the dental plan with MelLife have noT seen an increase in the past two years of the three-year plan; however 10% is proposed this year. This translates to a monthly increase from SOJ4 for a single enrollee to $254 for the family plan per monTh. • There are no increases proposed to any of the other dental, vision, life insurance or long-term disability plans. • Kaiser presented a new high-deductible health plan thaT will result in significantly lower premiums. The deductible is $1,000 per year, a hospital co-payment is 30%, a doctor visit is $30, and the maximum medical cost per year for the employee is S3,OOD, which includes ihe deductible. There is no cost for wellness and preventative services. Prescrlption medications will cost the same as the Kaiser HMO plan; but if an employee chooses a brand-name medication, there is a S100 per year deductible plus a$20 co-payment. The addition of this new plan positivery impacts the City's unfunded medical Iiability. • M accounting conducted for 2010 reflects that Anthem has an excess balance of $3,325,887 In the daims stabilization reserve. That amount will be refunded to the City upon the City's approval. According to City Manager Tandy, a previous refund was applied to the retiree medical liability at ihe direction of ihe City Council. Siaff is proposing the same action this year in an effort to furfher reduce the City's unfunded medical liability. • The average rate increase for the AnThem HMO plan over the past five years Is 2.3%; the Anthem PPO plan, 4.8%, and the Kaiser HMO plan, 4.1%. The average rate increase over the last five years for retiree plans indude Kaiser at 20% and Anthem PPO at -25%. Medicare Advantage rates increased by an average of 6,3%and ihe Anthem Senior Secure rates by 13.1%over this same period. Mc Morrison discussed the GASB liabillty. As of the last valuation on June 30, 2009, the total liability was $113 million. Due to actions taken by the City CounciL the amount is now approximately S93 million. An updated valuation will be presenTed once decisions have been made about plan changes and the new altemative plan. More detailed information, including corresponding calculations, is induded in the information ihat was distributed at The meeting. City Manager Tandy stated that the reduction means ihat the Clty is better able to meet the obligation, and is less subject to future challenges. S�,\Council Committees\2011 \Personnel\AUgust\AUgust 76 Agentla Summary Reporf - FindI.DOCX Page 3 ST:aI Assistant to the City Manager Teglia reported that the Insurance Commlttee met the � same day and was presented with the same information. By a spllt vote, those P� Committee members approved the increase To the mail-in prescription drug benefit, �� but had questions in regard to the new Kaiser high-deductible plan and the proposal to allocate the excess Anthem funds to the retiree medical liability, Members wlll meet again to formulate their questions for staff. When those quesTions are received, another Personnel Committee meeting will be scheduled. It is anticipated thaT the second meeting will take place in The next iwo weeks. CommiTtee Chair Weir asked for confirmation That the Personnel Committee members must wait to make a decision until the Insurance Commiitee has registered a final vote on all of ihe issues. City Manager Tandy explained that it is parf of ihe process to do so; howevec staff did request feedback as to whether the course of action was consistent with the desires of the Committee members. Chuck Waide with SEIU stated That he was very impressed with the way the City is handling the reTiree medical issue, as most other agencies have not taken any steps to reduce their liability. He commended The City Council and Mr. Tandy for their efforts, and Mc Morrison for his work. Committee Chair Weir said that ihe repori was excelleni and he was ready to take action today and move forward, Committee member Couch said that he was ready to move forward, also. Both City Manager Tandy and Ciiy Attomey Gennaro recommended that the Committee wait until the Insurance Committee can return with thelr recommendations on all items. Commitiee member Hanson indicated he would follow staff's recommendation to waii. 5. NEW BUSINESS 6. COMMIITEE COMMENTS None. 7. ADJOURNMENT The meeting was adjoumed at 12:45 p.m. �.�%� `� r S:\Council Committees\2011 \Personnel�AUgust\AUgust 76 Agenda Summpry Repod- Rf1dI.DOCX PCge 4 S1:al