HomeMy WebLinkAbout2008 12 08 Regular 601 Health Insurance for Married Both-City EmployeesCOMMISSION AGENDA
ITEM 601
Consent
Informational
I Public Hearing I I
X
December 8, 2008 MGR. /'L" /DEPT.
Regular Meeting Authorization
REQUEST: Requesting the City Commission consider an issue regarding health insurance costs
for married couples who are both City employees.
PURPOSE: This agenda item is needed for the City Commission to consider an issue regarding health
insurance costs for married couples who are both City employees.
CONSIDERATIONS:
The Prc-hlem
Two unmarried City employees receiving single employee health insurance benefits, decide to get
married to each other. The allocation of cost for health insurance for single coverage and family
coverage is different. Continuing to provide single coverage benefits for the two married employees is
$426.48 more expensive to the City than providing a combination of single and family coverage benefits
as discussed below.
Issue
The fundamental question at issue is how much should the City contribute to health insurance coverage
of married couples who are both employees of the City.
There are two options as follows:
1. The City pays the single employee rate for both members of a married couple and the
employees pay the premium cost of dependents.
2. The City pays the single rate of one member of a married couple and the employees pay the
cost of dependent coverage.
In either option, the total premium paid to the insurance company is the same. However, the allocation
of the premium cost is different as follows:
Cost Allocation
Option 1:
The cost allocation under Option 1 is summarized as follows:
Employee #1 Coverage
Employee #2 Coverage
Dependent Coverage
Total
Employee Pays City Pays Total Premium
5.00 426.48
5.00 426.48
71.41 195.57
81.41 1, 048.53 1,129.94
Option 2:
The cost allocation under Option 2 is summarized as follows:
Employee #1 Coverage
Employee #2 Coverage
Dependent Coverage
Total
Employee Pays City Pays Total Premium
5.00 426.48
5.00 0.00
497.89 195.57
507.89 622.05 1,129.94
There are valid points in favor of each option. The Delta between the two options is $426.48.
In Option 1, the married couple is paying $426.48 less in the allocation of the premium and the City is
paying $426.48 more in the allocation of the premium as compared to Option 2. In Option 2, the
married couple is paying$ 426.48 more in the allocation of the premium and the City is paying $426.48
less in the allocation of the premium as compared to Option 1.
Option 1 represents the past practice employed by the City regarding this issue. There are two sets of
spouses who have received this particular treatment in the past. As a result of the Fire Consolidation,
one set of those spouses no longer work for the City as they are now employed by Seminole County.
Therefore, only one set of spouses is currently enjoying this treatment. Now, two employees in the
Police Department, who are married to each other and who have not previously received this treatment,
are requesting to receive the same treatment (Option 1) previously afforded the other two sets of married
couples employed by the City.
FUNDING:
The cost to the City to allow Option 1 is $426.48 (monthly per couple) more than Option 2.
RECOMMENDATION:
The City Manager recommends the City Commission choose one of the following alternatives:
1. Prohibit married couples from retaining single employee coverage for both employees and
require the married couple to begin family coverage.
2. Grandfather in the new married couple and prohibit any future married couples from having
the benefit of single employee coverage for both employees.
3. Allow single employee coverage for both employees for all persons who marry during their
employment with the City.
ATTACHMENTS:
COMMISSION ACTION:
Date: December 8, 2008
The attached document was provided to the City
Commission during Regular Agenda Item "601"
by Mr. Kevin Smith at the December 8, 2008
City Commission Regular Meeting.
CITY OF WINTER SPRINGS
HEALTH INSURANCE PREMIUMS
**EFFECTIVE 10/1/2008**
FINAL
MONTH LY RATES
EMPLOYEE & EMPLOYEE & EMPLOYEE & EMPLOYEE 8
EMPLOYEE SPOUSE CHILD FAMILY FAMILY DELTA
AETNA-HMO Base Plan (Option 1)
EMPLOYEES PAY $5 FOR EMPLOYEE COVERAGE
OPT OUT OF PLAN ALLOWABLE -CITY INCENTIVE TO EMPLOYEE $100/MONTH
CITY PAYS FLAT AMOUNT HMO FOR EMPLOYEE $426.48 $426.48 $426.48 $426.48 $852.96
CITY SUBSIDY FOR DEPENDENT COVERAGE $0.00 $168.85 $168.85 $195.57 $195.57
TOTAL CITY PAY $426.48 $595.33 $595.33 $622.05 $1,048.53 $426.48
EMPLOYEE PAYS FOR EMPLOYEE $5.00 $5.00 $5.00 $5.00 $5.00
EMPLOYEE PAYS FOR DEPENDENT COVERAGE $0.00 $434.17 $434.17 $502.89 $76.41
TOTAL EMPLOYEE PAY $5.00 $439.17 $439.17 $507.89 $81.41 ($426.48)
TOTAL PREMIUM $431.48 $1,034.50 $1,034.50 $1,129.94 $1,129.94 $0.00
U:\docs\excelWetna Health Insurance Premiums 10-01-08 FINAL Summary