01-13-2021 Council Packet - Laserfiche WebLink

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STAFF REPORT TO:Mayor Keis and Members of City Council FROM:Heidi Heller, City Clerk DATE:January 13, 2020 RE:2021 Employee Benefits – Health Insurance, Opt Out & STD/LTD/Life ACTION TO BE CONSIDERED: Approve 2021 employee benefits: PEIP as the City’s health insurance provider, Opt-Out payments of $575/month for family coverage and $250/month for single, under age 26, coverage, and switching to Ochs for disability and life insurance. BACKGROUND: Health Insurance - In March 2019, the City changed to PEIP, Public Employees Insurance Program, and was able to substantially reduce health insurance premium costs. The past two years of increases with PEIP have been much less than what other insurance plans have seen, and staff has been very satisfied with PEIP. The employee contribution for family coverage would remain the same at $355/month in 2021. 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, or employees who 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. Staff recommends no changes to the opt out payments for health insurance of $575/month for family coverage and $250/month for single, under age 26, coverage. Disability & Life Insurance Plans - The City offers short-term and long-term disability policies for all regular employees, and a life insurance policy for regular full-time employees. Employees can also purchase additional life insurance for themselves, a spouse or dependents. The City has been with Unum for the last five years and the rates have not increased because of multi-year rate locks and the addition of a new policy. The rate locks have now expired and Unum initially proposed a 30% increase for 2021. Staff requested pricing from another company, Ochs, and their total pricing quote for the same three policies was 2.33% less than our 2020 rates with Unum. Unum did counter offer with a 6.56% increase, but staff has opted to switch to Ochs, Inc. which is a subsidiary of Securian Financial Group. The Ochs plans will offer the same coverage as we had with Unum. RECOMMENDATION: Staff recommends PEIP as the City’s health insurance provider, the 2021 Opt-Out payments remain at $575/month for family coverage and $250/month for single, under age 26, coverage, and switching to Ochs for Short-term & Long-term disability and life insurance policies.