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HomeMy WebLinkAbout2004 08 23 Regular 509 ~- COMMISSION AGENDA ITEM 509 CONSENT INFORMATIONAL PUBLIC HEARING REGULAR X MGR rr- IDEPTtiil) Authorization August 23,2004 Meeting REQUEST: The City Manager is requesting the City Commission Decide Issues Related to Employee Insurance Coverage. PURPOSE: To have the City Commission decide issues related to employee insurance as follows: 1. Health Insurance Plan Type 2. Employee Contribution to Employee's Coverage 3. Monetary Incentive to Employee's Who Opt out of Plan 4. Dependent Care Subsidy 5. Dental Insurance 6. Life, AD&D and Long-Term Disability Insurance CONSIDERATIONS: The City's Third Party Agent, Ms. Fluffy Bellus of Bellus Insurance Services, requested bids for the benefits of health, dental, life, accidental death and dismemberment, and long-term disability insurance, which are currently offered to the City's employees. For health insurance, the City offers United Health Care's 399T HMO and 499T POS Plans to all employees. Bids were obtained from Aetna, Cigna, Humana and United Health Care ("United"). AMS, AvMed, BCBS, Great West, Florida Health Care, Florida League of Cities, Pacific Life and Principal all declined to provide quotes. As detailed in Attachment 1, the annual costs for Aetna, Cigna, and Humana each came in at higher rates than the rate indicated with the United renewal. United no longer offers the current plan design offered to City of Winter Springs' employees, as they are condensing their plans to one platform; however, United still provides the best options through two of its plans 44C and 32C, detailed below. Only the HMO Plan benefits and price differences are analyzed below not the POS Plan. Regular Agenda Item 509 August 23, 2004 Page 2 of4 44C Plan: The 44C Plan would result in a 6.2% increase. Some of the benefits of this plan compared to the current plan are as follows: Office visits increase from a copay of $1 0 to $20 for primary and specialists Urgent care increase from a copay of $35 to $50 Outpatient surgery, x-ray and diagnostic visits decrease from a copay of $50 to no charge In-patient hospital stays decrease from $400 to $250 per admission Durable medical equipment decrease from $100 to no charge 32C Plan: The 32C Plan would result in a 7.8% increase, but offers increased benefits. Some of the benefits ofthis plan compared to the current plan are as follows: Office visits remain at the same $10 copay for primary and specialists Emergency room visits decrease from a copay of$100 to $75 Outpatient surgery, x-ray and diagnostic visits decrease from a copay of $50 to no charge In-patient hospital stays decrease from $400 to $250 per admission Durable medical equipment and home health care decreases from $100 to no charge Outpatient counseling decrease from $10/$20 to $5/$10 Both the 44C and 32C plans, coupled with the open access plan, provide outstanding renewal options for the City. An additional benefit of remaining with United is that City employees will not be faced with the inconveniences associated with changing doctors and familiarizing themselves with a new carrier. If the 44C HMO Plan is chosen, the annual increase to the employee for health insurance will be as follows: Annual $ Increase $0 $204.60 $204.96 $237.96 Annual % Increase 0.00% 5.98% 5.98% 5.99% The City Commission may want to discuss reducing the City's contribution (subsidy) towards employees for their dependent care coverage. A subsidy was started a few years ago when the rates went up high and employees were given little notice to prepare for the cost increase; however, the City may want to consider systematically reducing the subsidy for dependent care coverage until it no longer exists and the employees bear the full burden for the cost of their dependents. The increased cost of the United Health Care 44C HMO Plan, which is approximately 6.2%, was included in City Manager's Preliminary Budget presented to the City Commission the June 1,2004 Budget Workshop. Regular Agenda Item 509 August 23, 2004 Page 3 of 4 For dental insurance (a voluntary product), the City is insured by Fortis, which offers both a DMO and an Indemnity plan. Bids were requested from all carriers which offer our current dual option plan. Bids for the Indemnity/PPO option were received from Comp Benefits, Fortis, GE Financial, Humana, Paragon Dental, Standard and United Health Care (see Attachment 2). The quotes received were either more expensive or offered less benefits than Fortis offers. As a note, of the seven bidders, only Comp Benefits, Fortis, Humana, and Paragon have both DMO and Indemnity/PPO options. See Attachment 3 for the bids for the DMO option. Thus, Ms. Bellus recommends staying with the current carrier. An additional benefit of remaining with Fortis is that City employees will not be faced with the inconveniences associated with changing dentists and familiarizing themselves with a new carner. For life and accidental death and dismemberment (ad&d) insurance, the City is insured by Unum. Bids were obtained from GE Financial, Hartford, Standard and Unum (see Attachment 4). Unum's bid was the highest at $0.39 per thousand of salary. Standard's bid was $0.21 per thousand of salary. Although Unum's bid was higher, Ms. Bellus offers that Unum has been an excellent partner as can be shown by: . Retirees were omitted in the final census provided to Unum by the City in August 2002. Unum stood behind their original quote of $0.32 per thousand even though they could have charged the City more. If the retirees had been included at the higher rate, Unum could have billed an additional $18,000 over the last 24 months; and . Unum paid a life insurance claim on a retiree who was not listed on the plan. If the City chooses to switch to Standard, the City could save approximately $20,472 per year. Standard has also provided a two-year rate guarantee and will match all plan designs. For long-term disability insurance, the City is also insured by Unum. Bids were obtained from Hartford, Standard and Unum (see Attachment 5). Unum's bid was $0.45 per hundred of salary. Standard's bid was $0.42 per hundred of salary. If the City chooses to switch to Standard, the City could save approximately $2,760 per year. Standard has also provided a two-year rate guarantee for this product as well and will match all plan designs. As for the opting out and monetary incentives, the City shares the cost of insurance with the employees. As a rule, employees can only opt out of the insurance program if it is not fully funded by the employer. As a result, the City instituted a cost sharing program with the employee of $5.00 per month (or $60.00 per year). Employees may opt out of the insurance program; however, they must provide proof of insurance on their spouses' insurance. The City offers a monetary incentive of $100 per month (or $1,200 per year) to those employees that are in a position to opt out of the plan. This results in a savings to the City of $2,403 (based on the renewal rates for the United Health Care 44C HMO Plan rates for fiscal year 2004-2005 of $3,603) for every employee that is included on their spouses' insurance. In fiscal year 2003-2004, the City saved approximately $50,000 by instituting the opt-out alternative. Regular Agenda Item 509 August 23, 2004 Page 4 of4 RECOMMENDATION: The City Manager recommends the City Commission approve the following: 1. Health Provider and Plan Type - United Healthcare 44C HMO and 44C+ POS Plans (employees buy-up for additional POS costs above and beyond what the City covers under the HMO Plan) 2. Employee Contribution to Employee's Coverage - Continue to charge employees $5 per month (or $60 per year) in order to continue the Opting Out Provision. 3. Monetary Incentive to Employee's Who Opt out of Plan - Continue to provide a $100 per month (or $1,200 per year) incentive to employees to opt out of plan. 4. Dependent Care Subsidy - Increase subsidy by 6.2%, the amount the health Insurance increased. 5. Dental Insurance Fortis DMO and Indemnity Plans 6. Life, AD&D and Long-Term Disability Insurance Standard Life, AD&D and Long-term Disability Insurance Plans FUNDING: Funding for the recommendations (listed as items 1 through 6 above) are included in the City Manager's Tentative Fiscal Year 2004-2005 Budget proposal. ATTACHMENTS: 1. Health Insurance Plan Comparison 2. Dental Indemnity Insurance Comparison 3. Dental DMO Insurance Comparison 4. Life and AD&D Insurance Comparison 5. Long- Term Disability Insurance Comparison COMMISSION ACTION: [II ~lfetlme.. ::'.:.~':"'..'C.;"o'.~. V1a"~.:i:i:j:j:.. .:...,:..:.,:....:.P:..:..;..:~:..c.~~.o..;.i....pt':,...:..~:.::.~..::..:.>:.::.::.:: p,.:...:...::.,',.O:.utiot'l-'Pm.I"t..C k,,:~tU ::.. .. :~~...mIH..()$..IOPnlt.clo..'...:.. .:.. ',T::.::. '":., .:~,c".org.e..~~:',',.. .., :. :'.':~E~~t!~~H: .i.::~~x;~uJ:.: ~~.1ill~~. .,. ... "n.. :.:: ::: ><0 nRA. T: ::;:::::;:::::::,:.:::::::;::' .Ll: ::j; ".::. Unhed H hh Car. 399T .:.:,'...::.$.:.1.0..i;~~~~6:H::..:$1~0.,$~~0.. ... .', .P:~..~:~:.'O,'..~~..D:n..:. :'...:.::. T;;H:j:1~h~;;;...;::..'''H ..:::::;:.: ., :: : ::: unii~dH~~I~h:J~;~~~9j/':.::.NA;in::r:::::NA!ln. ::::':~;~:;:: .::~;~.:I .. $1i:i;$30/$5oiIn"$1~~;~~~~i~: .. .....sloo.;:j,j:: :::j :::: :.:::.:~os:::::.:.. :":$59Qi$i!i~64i: $2,QOp;0pP'Qijt : :7-0)~q:QUi H:b~~ ~3R;~j. .:::D~:+)O~o~:,:~o~~I;~~o~~~i! ':.:::::.ri~i~g~::::j: .:...... ..::.... ......:::.:.::::::::.. :::::=HL::::::: ....:,,":. >>....: :.. ...:::::::. 1:::::::::::;::1::::::::.::::::::::::::." ....... . .....:..::::~~;...::: .... .. ......... ............ .,. ...... ........ "~:I::ur\iiri~~< Tn'H... .... ...... ..... iJ;iiied i:t~~iih' c~i~:::: :i2ci ::::;::::::::::.;..:.. Aetna HMO NA Unirrited NA $10/$20 Aetna Choice NA-In Uni_ln NA-In $10 1 $20-ln $5001$100(}.Qut $1,OOO,OOO-Out 70/30 -Out Oed + 30%-Out Cigna HMO Open Access NA UnUmited NA $10 Clgna POS Open Access NA Unirrite<l-In NA-In $2,Ooo,OO~OuI 70/~ $1~ln Oed + 30%-Out Clgn. Health Care Network Open Access NA Unimlled NA $10 Humana 751002 NA Unlimited NA $151$25 Humana 018/016 $500/$1,500 City of Winter Springs Health Insurance Plan Comparison ..... $i~/~;50:: :::.$i5~i$~oo.V.. :.::::.::~~i;$;~~H::::::: $10/$301$50 $1500 1 $3000 $10/$3O/$5~ln NA-Out $1500 1 $300~ln $3000 1 $600~0uI $10/$30/$50 $1500 1 53000 $15/$30/$5~ln NA-Out $15001$300~ln $3000 1 $600~Out 515/$30/$50 $1500 1 53000 $10/$25/$501$100 $15001$3000 80 12~ln 60 140-0ut 5201 $30-ln . $10 1 $251 $50 125% $2000 1 $400~ln Oed + 3O%..Out up to $2500 max $4000 1 $800~Out NA-Out $5,000,000 Humana 0801001 $250 1 $750 $2,000,000 NA $20 1 $30 Humana 093/011 $5001$1500 $5,OOOOO~ln 90 11~ln $1,OOO,OO~1 70/30-Out $20 1 $30 . 18116 prevenUve care $200 max topay $350,00 per admission $350-ln per admission Oed + 30%-Out $400 per admission $40~ln per admfssion Oed + 30%-Out $400 per admission $250 a day 1 max 3 days per admission $250 a day 1 max 3 days per admission Oed + 30%-Out $101 $251 $50 125% 52000 1 $600~ln $250 a day 1 max 3 days up 10 $2500 max per admission $101$25/$50/25% $2000 1$600~ln Oed + 10%-ln up to $2500 max $40001 $12,OOO-Oul Oed + 3O%-out TI II $100 $10~ln Oed + 30%-Out $100 $10~ln Oed + 30%-Out $100 $75.00 $100 + 20%-ln Oed + 400ArOut $100.00 $150 + 10'I.-In Oed + 30%-Out ATTACHMENT 1 ... .... .... :::::Rates :::::::::.::.::::::';' .~i~~i~ 'j~~fl:';:~ .~~~:i:U:~:iJii,\J.: ...... ... :::.::::.currentRates ...... ........ $283:00 : $6~FSHTIS6,37.: :.$738:83: T/>> ......:...... ..Curren1Rates:':':: :..::.::::;:1 .$295.12 $705:35:: ::$705:351::5770.27'J ~~5:o0;$i~8:94 :i.i~8:~4$7~6:~( :~nll5. :.m.4:(j1 .J7!4:(j1:: ::~5,26, .. ... ....:..:::;:::... ................................ .............. .......:~:.~:..:.::':' $3(j0:23 "$'7i7:~6 j7i7;~ :$!~:~( .' .. ..... :::,:::::;:::: ..... #:~t~?$i~,ii9: :$758:59: ::i'S2S:W ...... ,... ..::.:..' ... ::::::::::;:::: ::::;::::::: ......::... ... ..... .. ...... .... :::.;:::: :$~6:~~' . .. ... ... .......... :~70~:~.. }~m:~!: .:$:7!:t~: $31i.38 :~~:~9.::$7~8:99:: ::~;7:~3 $314.91 $700.34 $589.34 $919.84 $343.26 $763.07 $642.11 $1,002.40 $349.41 $835,09 $835.09 $911.96 $429.69 51,026.96 $1,026.96 $1,121.49 $349.41 $835.09 $835.09 $911.96 $360.68 $865.62 $865.62 5944.98 $482.50 $1,158.01 $1,158.01 $1,264.17 $382.85 $918.82 $918.82 $1,003.06 $392.26 $941.40 $941.40 $1,027.70 <H07/O< City of Winter Springs Indemnlty/PPO Dental Insurance Comparison ATTACHMENT 2 Maximuml Full Mouth Dual Option Adult Emp+ Emp+ Preventive Basic Major Ortho Deductible Calendar Year UCR% X-Rays Available Ortho Sinale Spouse Children Family Fortis 100% 80% 50% 50% $50 per person $1,000 90% Every 5 years Yes No Current $24,57 $48.00 $55,47 $78.91 Renewal $27,03 $52.80 $61.02 $86,80 CompBenefrts 100% 80% 50% 50% $50/$150 $1,000 80% Every 3 years Yes No $20.04 $40,64 $40,72 $66,90 0% GE Financial 100% 80% 50% 50% $50/$150 $1,000 85% Every 5 years No No $16,19 $33,33 $28.63 $49.41 Humana 100% 80% 50% NA $501$150 $1,000 90% Every 5 years Yes No $22.65 $51.12 $51,64 $72.93 Paragon Dental 100% 80% 50% 25% $501$150 $1,500 80% Every 5 years Yes Yes $21,50 $41.7 5 $45.90 $71,50 Standard 100% 80% 50% NA $50/$150 $1,000 90% Every 3 years Yes No $22,96 $46.76 $49,84 $73,64 United Health Care 100% 80% 50% 50% $501 $150 $1,000 85% Every 5 years Yes No $27.81 $55,62 $64,38 $95,83 * Fortis IndemnitylPPO participation requirement Is 75%. Please note: Rates vary due to participation. There are other options available with various carriers, Le. PPO & Dual Options, For HMO plans, see proposal. Due to the variations and number of plans used within this comparison, some plan designs, beneFrts and rates may vary, City of Winter Springs DMO Dental Insurance Comparison ATTACHMENT 3 Emp+ Emp+ Single Spouse Children Family Fortis Current $11.08 $18.74 $25.99 $30.67 Renewal $11.08 $18.74 $25.99 $30.67 CompBenefits $19.42 $39.00 $38.54 $62.90 Humana $11.50 $22.48 $19.80 $29.33 Paragon Dental $10.83 $18.81 $23.18 $29.55 Please note: Rates vary due to participation. There are other options available with various carriers, Le. PPO & Dual Options. For HMO plans, see proposal. Due to the variations and number of plans used within this comparison, some plan designs, benefits and rates may vary. City of Winter Springs ATTACHMENT 4 Life and AD&D Insurance Comparison Maximum Benefit Amount Basic Life Unit AD&D Unite Rate per $1000 Rate per $1000 ........................................... .. ...::::.. ."::::CiiiiiiiifRiili3C:::::':::.. :/::/H$o:.ii... ::::::::::::$o;o~;: ..:: .......,.. :Hj~ijnijW~iR~t~F/<..... ..<:$O..j,C:.... ....TTT$O;Q~: .... $0,20 $0.04 GE Financial does not Include retirees Hartford $50,000 $150,000 $0,20 $0,05 Standard $150,000 $0,17 $0,04 . For comparison purposes only, the monthly premium was calculated from the highest volume amount quoted by competitors, Due to the variations and number of plans used within this comparison, some plan designs, benefits and rates may vary, 8/18/2004 City of Winter Springs ATTACHMENT 5 Long-Term Disability Insurance Comparison Minimum Elimination Monthly Benefit Rate per $100 Participation Period Amount of monthlv benefit UNUM 25% 180 days $5,000 $0.45 Hartford 100% 180 days $5,000 $0.53 Standard 25% 180 days $6,000 $0.42 Due to the variations and number of plans used within this comparison, some plan designs, benefits and rates may vary.