02-10-2016 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Heidi Heller, City Clerk Sharon Provos, Finance Director DATE: January 29, 2016 RE: 2016 Health Insurance Opt Out As the Council is aware, the City provides an Opt Out benefit for those employees eligible for family health insurance coverage and who have coverage through a spouse’s health insurance plan. When an employee opts out of family health insurance, the result is a cost savings to the City even though the opt out benefit is paid to the employee. 2015 opt out payments for health insurance were $575 for staff and $595.90 for the City Administrator. The Parks & Recreation Director also received an opt out reimbursement given he and his spouse obtain health insurance through Medicare with supplement plans. The Director’s 2015 opt out was $1,010 and consisted of reimbursement of Medicare and supplement plan costs and resulted in a savings to the City of $268.00 per month had both he and his spouse been on the City’s coverage. With regard to 2016 opt out, the following is proposed: City Staff - 2016 opt out payment for staff is proposed to remain at $575 per month based on League of MN Cities Salary Survey results. This was discussed as part of 2016 Budget discussions. City Administrator – The City Administrator’s contract provides for payment of 100% of his family health insurance costs, or an opt out payment of 95% of that cost. In this case, the City Administrator is insured under the City’s plan and his spouse is insured at her place of employment. The additional cost of the City Administrator’s family health insurance coverage for 2016 would be $655.97 per month and does not include any allowance for the $2,000 deductible. Based on an opt out payment of the 95% proposed, his opt out payment would be $623 per month. Parks & Recreation Director – Both the Parks & Recreation Director and his spouse will obtain their health insurance coverage through Medicare for 2016. The savings to the City are $511 per month using this approach. Based on our past approach, we have split this savings with the Parks & Recreation Director. This results in a payment to him of $989 when you add in the cost of his purchased coverage. This is the same amount as was used in 2015. This payment will only be effective through May given his change in employment status.