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We/ of <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 <br />www.cilittle-canada.mn.us <br />MEMORANDUM <br />TO: Mayor Blesener and Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />Kathy Glanzer, City Clerk <br />DATE: March 22, 2007 <br />RE: Renewal of Employee Health Insurance <br />MAYOR <br />Bill Blesener <br />COUNCIL <br />Ricic Montour <br />Barbara Allan <br />John Keis <br />Michael McGraw <br />ADMINISTRATOR <br />Joel R. Itanson <br />The City has received employee health insurance renewal quotes from Health Partners. <br />Current coverage is Health Partners Open Access 15 -100% which came in at a 23.13% <br />rate increase for our coverage year of April 1, 2007 through March 31, 2008. The <br />increase is attributable to our plan having a 189.05% experience rating. <br />We have discussed numerous options with our agent including going out for underwriting <br />with other carriers. Based on his analysis of our group as well as rate ranges being <br />offered by other carriers, the City's best option is to remain with Health Partners at this <br />time. That being said, we have looked at other health insurance plans within the Health <br />Partners system. <br />Staff then conducted a detailed analysis of various Health Partners plans, including a high <br />deductible plan, and concluded that either the Open Access 15 -100% (23.13% rate <br />increase) or the Open Access 15 -80% (15.20% rate increase) are the plans that are most <br />feasible for this renewal period. Please see the Plan Summary comparison attached. You <br />will note that the primary difference between the two plans is that under Open Access 15- <br />80% plan employees will be subject to 20% of the cost of hospitalization (inpatient and <br />outpatient) up to the Annual Out -Of- Pocket Maximums. <br />Also attached is a comparison of employee renewal costs. Please be advised that the cost <br />to the City is capped. The City's cap was increased in the 2007 Budget from $710 per <br />month for employees with coverage beyond "employee only" to $760. As you are aware, <br />the City annually reviews employee insurance contributions being made by other cities <br />and adjusts the cap accordingly. The employee cost comparison is based on the $760 <br />cap. The City pays 100% of health insurance coverage for "employee only" coverage. <br />1 <br />