Item 8D - Employee Benefits - InsuranceAGENDA ITEM:
CITY OF ATLANTIC BE ACH
CITY COMMISSION MEETING
STAFF REPORT
Empl oyee Benefi ts -In su rance
AGENDA ITEM #8D
o c rontm 27,2014
r i .t?-. SUBM ITTED BY : Ca th eti nc Berry, Esq., Human Reso urces Direc tor ~
DAT E:
BACKGROUND:
October 9, 20 14
Por the 20 15 renewal , our in surance broker, Harden, co ntacted th e major providers of
medical, dental , vis ion, life & vo lunt ary life and shor t-term & lo ng-term di sa bility
in surance serv ing No rtheast Flori da. The C ity cu rrent ly pays a s ubsta nti al portion of
th e premium s for med ica l in surance and the total premium s for ba s ic li fc insurance,
which in clud es a free Em pl oyee Assi sta nce Program. The ap proved C ity Budget for
2014-20 15 a nti c ipated a 17% increase in employee in surance benefit cos ts to the City.
The viable p lan options fr om th e res pondin g carriers for eac h type of insurance arc
discus sed below, with medi ca l and life di scussed first as they represent cost to the
City:
MEDI CAL:
Harden reac hed ou t to th e five majo r ca tTiers serv in g the Northe as t Flo rid a a rea:
Florid a Blue (incumbent), Ae tn a, AvMed, CovcntTy and United Hea lthCa re. Un ited
Hea lthCare offered the mo st comprehens ive and lea st ex pensive plan s wit h a
s ub stantial cos t sav in gs to the City and for the e mpl oyees' o ut -of-pocket expenses.
T he Un ited p lans are s imilar in benefit s to what is o ffered thi s year by Florid a Blue ,
except that Mayo Clin ic is included in network wi th Uni ted. C hoosing United
HealthCare wou ld represent a 3.1% dec rease in overall pn:miums (-$28,5 17) from this
year 's total premiums. United has also offered to reimburse us up to $5,000 for th e
biom etrics we provi de at o ur Employee He alth Fair. T he incumbe nt , Pl orid a Blue
initi all y pr oposed an 18.2% increase in th e plans that th ey curren tly provide to the City,
but Harden was ab le to negot iate the se down to a 14.2% in crease, o r $13 1,625 over
thi s year's prem ium s. Un it ed wo uld thu s re pre sent a $160,142 premiums savings ove r
Florid a Blue for 20 15. If we chose to go with Unit ed, we would not be ab le to go
back to Flo rida Blue for two yea rs.
If we kept the e mpl oyer contribu ti on percentage the same as thi s year, United wou ld
repr esent a co mbin ed sav in gs to the empl oyees in premium s of$4,624 and a savi ngs to
the City of $23,893. Tf we ke pt th e empl oyee premiums the sa me as thi s year, th e
savings to th e City wo uld be $28,517.
Du e to the sub s tantial sav in gs in premium s, benefits s imil ar to wha t is curre ntly
provi ded and the fact th a t Ma yo Clini c is in netwo rk , it is reco mm end ed th at the City
c hoose United HealthCare for it s medica l in suran ce pro vi der and keep th e e mployer
co ntributi on percen tage th e same as this year, givin g the emp loyees a break on th eir
premiums while still sav ing the City $23,893 over what it is paying thi s year.
BUDGET:
LIFE:
AGENDA ITEM # SD
OCTOBER 27,2014
Three carriers responded with proposals to provide basic life insurance to our
employees: Standard, Lincoln and United HealthCare. Standard and Lincoln both
proposed a 12% increase in costs over the current year for the same coverage ($1 ,063
annual premium increase), but United proposed a 59% increase, so I recommend
staying with Standard, which has a robust Employee Assistance Program of which
many employees and their family members have taken advantage.
VOLUNTARY BENEFITS:
The benefit package includes voluntary products that are 100% paid by the employee.
Employees may elect dental, vision, short and long term disability and supplemental
life insurance and pay 100% of the premium.
Dental:
There are four major dental carriers in our area: Guardian (incumbent), Lincoln,
United HealthCare and UCCI. Guardian's proposal represents a 9.3% increase in
premiums for the same coverage provided this year, while United HealthCare's
proposal represents an overall savings of 6.5% in premiums over this year's. I
recommend going with United HealthCare.
Vision:
Three carriers responded with proposals to provide voluntary vision insurance:
Humana (incumbent), United HealthCare and Lincoln. Humana proposed a 3%
increase in premiums for the same coverage, while Lincoln's was a 10% increase.
United HealthCare proposed slightly better benefits with a slight decrease in
premiums, but they have a greatly limited network of pmiicipating providers, so I
recommend that we remain with Humana.
Supplemental Life:
Three carriers responded with very similar proposals for voluntary life insurance:
Standard (incumbent), Lincoln and United HealthCare, so I recommend staying with
Standard.
Short Term and Long Term Disability:
Two carriers responded with proposals to provide our employees with voluntary
disability insurance: Lincoln (incumbent) and United HealthCare. Lincoln's proposal
was substantially better, so I recommend staying with Lincoln.
If these recommendations are approved, the total savings to the City for premiums
paid for health insurance, over those paid this year, is $23,893, which is
$181,4 72.12 under the amount budgeted. The cost to the City for basic life
premiums over those paid this year will increase by $1,063.
RECOMMENDATIONS:
1. Approve all employee insurances listed below effective January 1, 2015 through December 31,
2015.
2
2. Aut horize City Mana ger to sign related in suran ce renewal docum ents:
City Sponsored:
Medical -United Health Ca re (OFQ)
Li fe & Supp lement Life (EAP is in clu ded)-S tand ard
Vo lun ta ry Products :
Den ta l -United HealthCarc
Vis ion -Hum ana
Suppl em ental Life -Standard
Sho rt and lo ng term disab ilit y -Lin co ln
ATTAC J IM ENTS: Exec utive Sum mary
REVIEW ED BY CITY MANAG ER : ~-~~ ,..7u.y
3
AGENDA ITEM# 80
O C'r0BER27, 20 14
CI TY OF AT LANTIC BEACH
Execut ive Summary
Oct obe r 8 , 20 14
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M e dical
Current Flo rida Bl ue Plan
Renew al Flor i da Blue Plan
Rec ommend ed Un ited Hea lt hCa r e Pl an
Life I AD&D
Curr ent St and ard life/AD&D
Re n e w a l St andard life/ AO &O
EAP
Re co mmend EAP wit h Li fe -Sta ndard ($.35/EE )
,,, •11 lf:liiT .. ; •liT' 1'-11
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Dental
Curren t Guard ian Dental Pl ans
Propose d Guar d ian Pl an s
Recommended United Hea l t hCare Pl an s
Supplemental life I AD&D Pac kage
Current & Recommen ded Standard Vol. Li fe/AD&D
VI sion
Current Hum ana
Recomme nd ed Humana
Voluntary Short and Lon g Term Disa bilit y -Lin coln
4
.. "'!.111811~111 •
AC ENOA ITE M #SD
OC TODER 27, 20 14
$926,936
$1,095,4 75
$898,419
$9018
$10,100
$5 00
, ..... I :riiT• tlTI o;y, • • ~"'
$23,935
$26,164
$22,367
Ra t es V ary by Age
$5,925
$6,102
Rat es Va ry by Age