Item 3B - Employe Benefits - InsuranceAGENDA IT EM:
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
Empl oyee Benefits -In su rance
AGENDA ITEM 11311
NOVEMBER 10,20 14
I l ,"?, SUBMITTED BY : Ca th erine Berry, Esq., Human Resources Director '...-A
DATE:
BACKGROUND:
October 9, 20 14
For U1e 20 15 renewal, o ur insurance broker, Hard en, co nta cted the major providers of
mcd .ica l, den tal, vision, li fe & volu nt ary life and short-tem1 & long-tcnn disability
in s urance servin g Northeast Florida. T he City currently pays a sub stanti al p01iion of
the premiums for medical insurance and the total prem ium s fo r basic li fe insurance,
which includes a free Emp loyee Assistance Program . The approved City Budget for
20 14 -20 15 anti c ip ated a 17% increase in employee in surance benefit costs to the City.
The viable plan options from the responding carri ers for each type of insurance are
discussed below, with medi ca l and life di scussed first as they represent cost to the
Ci ty:
MEDICAL:
Harden reached o ut to the five major ca rri ers ser ving the Northeas t Florida area:
Florid a Blu e (incumbent), Aetna, AvMed , Coventry and United HealthCare. United
Hea lthCarc o ffered the most comprehensive and least expens ive plan s with a
s ubstantia l cost savings to the City and for the employees' o ut -of-pocket ex penses.
The United plan s are sim il ar in benefits to what is offered thi s year by Florida Blue,
except th at Mayo C linic is included in network with Un ited . Choosing United
Health Care would rep re se nt a 3.1% decrease in ove rall premiums (-$28,5 I 7) from thi s
year 's tota l premiums. United ha s a lso offered to reimburs e us up to $5,000 for the
biometr ic we provide at ou r Employee Health Fair. The incumb ent, Florida Blue
initially propo sed an 18.2% inc rease in the p lans that they cutTen tty provide to the Ci ty,
but Hard en was able to negotiate these down to a 14.2% increase, or $13 1,625 over
this year's premiums. Un ited would thus represent a $160,142 prem iums savings over
Florida Bl ue for 2015. If we chose to go wi th Unit ed, we would not be ab le to go
back to Florida Blue for two years.
If we kept the emp lo yer con tributi on percentage the sa me as thi s year, Uni ted wou ld
represe nt a combi ned savi ngs to the emp loyees in premiums of$4,62 4 and a savings to
the City of $23,893. If we kept the employee premiums the same as this year, the
savi ngs to the City would be $28,517 .
Due to the substa nti a l sav in gs in premiums, benetits s imilar to what is cu rre ntly
provided and the fact that Mayo Clini c is in network , it is recom mended that the City
choo se Un ited HealthCa re for its medical insurance provider a nd keep the emp loyer
contlibution percent age the same as thi s year, giving the employees a break on their
premiums while sti ll sav ing the City $23,893 over what it is paying thi s year.
BUDGET:
LIFE:
AGENDA ITEM # 3B
NOVEMBER 10, 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 participating 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
$181,472.12 under the amount budgeted. The cost to the City for basic life
premiums over those paid this year will increase by $1,063.
RECOMMENDATIONS:
1. Approve all employee insurances listed below effective January 1, 2015 through December 31,
2015.
2
2. Authorize Ci ty Manager to sign related insurance renewa l documents:
City Sponsored:
Med ical -Uni ted HealthCare (OFQ)
Life & Supplement Life (EAP is inc lud ed)-Standard
Vo lunt ary Products:
Denta l -United HealthCarc
Vision -Hum ana
Supplemental Life -Standard
Shmt and long tenn disabilit y -Lincoln
ATTACHMENTS: Executi ve Summ ary
REVIEW e D BY C ITY MANAGER: ~ V"ec.-;2~
3
AGENDA ITEM II 38
NOVEM BER 10,2014
CITY OF ATLANTIC BEACH
Executive Summary
October 8, 2014
_.._ __,.,
~ •uJ.1•lt:..r•ll:~m
Medical
Current Florida Blu e Pl an
Ren ewal Florida Blu e Pl an
Recommended United HealthCare Plan
Life I AD&D
Cu r rent St andard Life/AD&D
Renewal Standard LlfeiAD&D
EAP
Recommend EAP with Life-Standard ($.35IEE)
• : r::TiT: lfR
-~ :• ..
Dental
Cu rren t Guardian Dental Plan s
Propose d Gu ard ian Pla ns
Recommended United HealthCare Pl ans
Supplemental Life I AD&D Package
Current & Recommended Standard Vol. LifeiAD&D
VIsion
Curre nt Humana
Recommended Humana
Voluntary Short and Long Term Disability -Lincoln
4
AGENDA I TEM# 3B
NOVEMBER 10,2014
lf•hhlH;II •
$926,936
$1,095,475
$898,419
$9018
$10,100
$500
~!ll!l~ •. • iTilThl·~·~il:t
$23,935
$26,164
$22,367
Rates Vary by Age
$5,925
$6,102
Rates Vary by Age