02-12-2018 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Heidi Heller, City Clerk DATE: February 9, 2018 RE: Health insurance/Opt out for Public Works Employee As the Council is aware, the City participates in the cost of employee health insurance. Employees with family coverage pay $355 per month towards the premium and the City covers the remainder of the costs. Employees who have other health insurance and opt out of the City’s health insurance plan are paid $525 per month as an Opt Out benefit. One of our Public Works employees has had health insurance coverage through his spouse’s employer’s insurance plan. She is now retired and was able to keep her existing health insurance plan through age 65. She will be turning 65 in March 2018, so the family will no longer be eligible to continue on her health insurance. The city employee and his dependent will be joining the City’s Health Partners insurance as a family plan, and his wife will be going on Medicare and have supplemental Medicare health and prescription policies through Blue Cross Blue Shield rather than go on our plan. In the past, the City has created a modified opt-out plan when an employee and/or spouse is able to use Medicare rather than the City’s health insurance plan since supplemental Medicare plans are much cheaper than the City’s health insurance policy. This employee’s situation is unique in that they still have a dependent and need a family health insurance plan. The Health Partners premium costs for this employee and his dependent are $1,026 per month. The employee contribution for family coverage is $355 per month. The spouse’s supplemental Medicare insurance and prescription plans will cost $286 per month, and the City will contribute $2,000 per year into his Health Savings Account as is standard with all employees due to our high deductible plan. Staff recommends that the employee be reimbursed for his spouse’s out-of-pocket expenses for Medicare supplemental insurance, as well as recommending that the City pay one-half of the $355 per month employee cost share for family health insurance. The net impact of this change is that the employee will save $177.50 per month in health insurance costs, have health insurance coverage for his dependent and spouse, and receive $166.68 per month into his HSA account, while the City will save $554 per month over the cost of having the entire family on our Health Partners plan.