Agenda Item 8CAGENDA ITEM # 8C
OCTOBER 22, 2012
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Renewal of Employee Benefits - Insurance
SUBMITTED BY: Susan Danhauser, Human Resources Director
DATE: October 12, 2012
BACKGROUND: For the FY 2012 renewal, our recently appointed insurance broker Harden and Associates
contacted the four major providers of medical insurance serving North Florida: CIGNA,
United HealthCare, Aetna, and Florida Blue (formerly Blue Cross /Blue Shield). Plans and
quotes were received from CIGNA, Aetna and Florida Blue. United declined stating that their
quotes were not competitive with the other carriers.
BUDGET: After carefully reviewing the medical plan options from the responding carriers, Florida Blue
offered the most comprehensive and least expensive plans with a cost savings to the City and
for the employees' out -of- pocket expenses. Due to the substantial savings to the City, the
proposed decrease in other employee benefits and no net pay increase, it is recommended that
the City pay 96% for the base coverage for employees and 65% of their dependent coverage.
This represents the same percentage of employer contribution as the current year. Life and
EAP insurances were also negotiated for an additional cost savings for the City. With all of the
cost savings, the addition of a wellness program has been proposed.
The budget for 2012/2013 fiscal year was calculated at 5% increase over previous 2011/2012
budget at $1,008,226 (includes brokerage commission). The proposed premiums for the
upcoming plan year of Jan 2013 — Dec 2013 for medical, life, EAP and the wellness program
are $276,924 under budget and $113,404 less than prior year.
The benefit package includes voluntary products that are 100% paid by the employee. As in
prior years, employees may elect dental and supplemental life insurance. For the upcoming
plan year, it is recommended that the City also offer voluntary short and long term disability
and vision insurance. These carriers, listed at the end of this report, were selected because they
are the most cost effective.
Note: * Actual 2011/2012 was adjusted for current number of participants for accurate comparison.
** Actual City expenses will fluctuate due to enrollment.
* ** Flat broker fee of $48,000
City Expenses
Benefit
Actual
2011/2012
Budget
2012/2013
Proposed
2012/2013
Cost Savings
From Prior
Year
% Savings
From Prior
Year
Medical
$ 853,374 *
$1,008,226
$ 698,208
Life
$ 16,008
$ 24,676
$ 9,270
EAP
$ 6,000
$ 6,000
$ 500
Broker Fee
Incl
Incl
$ 48,000***
Wellness
n/a
n/a
$ 6,000
Total
$ 875,382
$1,038,902
$ 761,978 **
$113,404
14.9%
Note: * Actual 2011/2012 was adjusted for current number of participants for accurate comparison.
** Actual City expenses will fluctuate due to enrollment.
* ** Flat broker fee of $48,000
AGENDA ITEM # 8C
OCTOBER 22, 2012
RECOMMENDATIONS:
Approve renewal of all employee insurances listed below effective January 1, 2013 through
December 31, 2013.
2. Authorize City Manager to sign related insurance renewal documents:
City Sponsored:
Medical - Florida Blue (formerly BlueCross /BlueShield)
Life & Supplement Life (EAP is included) — Standard
Voluntary Products:
Dental — Guardian
Vision — Humana CompBenefits
Short and long term disability — Lincoln
ATTACHMENTS: Executive Summary
REVIEWED BY CITY MANAGER:
AGENDA ITEM # 8C
OCTOBER 22, 2012
CITY OF ATLANTIC BEACH
Executive Summary
October 12, 2012