01-12-2022 Council Packet - Laserfiche WebLink

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STAFF REPORT TO:Mayor Keis and Members of City Council FROM:Heidi Heller, City Clerk/HR Manager DATE:January 12, 2022 RE:Approve 2022 Employee Benefits – Health Insurance Plan and Opt-Out and Add Opt-Out for Health Insurance Eligible Part-time Employees ACTION TO BE CONSIDERED: Approve PEIP, Public Employees Insurance Program, as the City’s health insurance provider, and Opt-Out payments of $575/month for family coverage and $250/month for single, under age 26, coverage for full-time employees. Add a pro-rated Opt-Out option for part-time employees that are eligible for health insurance. BACKGROUND: In March 2019, the City changed from Health Partners to PEIP, Public Employees Insurance Program, and was able to substantially reduce health insurance premium costs. The City and staff have been happy with PEIP, and while their rate increases have been higher than what was initially expected, they still remain lower than what we would otherwise be getting. The pandemic has played a large role in these higher increases. The City’s health insurance provider will remain as PEIP for 2022, and the base employee contribution for family coverage will remain the same at $355/month in 2022. As the Council is aware, the City provides an Opt-Out benefit for those full-time employees eligible for family health insurance coverage and who have coverage through a spouse’s health insurance plan, or employees that are under age 26 and remain on a parent’s insurance plan. When an employee opts out of the city’s health insurance plan, the result is a cost savings to the City even though the Opt-Out benefit is paid to the employee. 2022 Opt-Out payments for health insurance have remained at $575/month for family coverage and $250/month for single, under age 26, coverage for many years, and no changes to these amounts are proposed for 2022. In 2021, the Personnel Policy was amended to offer health insurance benefits to part-time regular employees who work at least 30 hours per week. Previously only full-time employees were eligible. The part-time employee’s cost of the health insurance is pro-rated based on the average number of hours they work. Staff is requesting the Council consider offering Opt-Out to all employees that are eligible for health insurance. Part-time employees working at least 30 hours per week would receive an Opt-Out amount that is pro-rated based on the number of hours they work. For example, an employee working 32 hours per week works 80% of 40 hours (full-time), therefore they would receive 80% of the full Opt-Out amount ($187.50 under age 26 or $431.25 family). There is currently one part-time employee that works at least 30 hours per week, and also eligible for family health insurance benefits, and therefore would also qualify for Opt-Out if approved. It is unlikely the employee will be able to utilize this benefit for 2022. Part-time employees help to create operational efficiency, one of the City’s Strategic Plan initiatives.