04-25-2001 Council Agenda - Laserfiche WebLink

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MAYOR Michael 1. Fahey COUNCIL Beverly Scalze Jim LaValle Matt Anderson Rick Montour 515 Little Canada Road, Little Canada, MN 55117-1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson Email: cityhall@ci .little- canada.mn.us MEMORANDUM TO: Mayor Fahey and Members of the City Council FROM: Joel R. Hanson, City Administrator DATE: April 19, 2001 RE: Increase in Health Insurance Cap As you are aware, the City currently contributes a maximum of $386 per month for health insurance coverage for employees and their families. The City pays single coverage in full. In preparing the 2001 Budget, I did not provide for an increase in the health insurance cap of $390. In looking at this number, I estimated a 15% increase in premium while factoring in no change in the make up of the group. At that time it appeared that the $390 City contribution would be more than adequate. I also had the results of a benefits survey conducted by the Stanton Group on employee health insurance benefits being paid by other cities (see survey attached). However, since my calculations anticipated no increase was necessary, I did not recommend an increase as part of my budget recommendations. The City received a very favorable renewal rate for employee health insurance coverage for this year. However, due to employment changes, total employee health insurance costs are higher than I anticipated at budget time. As a result, the monthly charge to employees is $23.00. Therefore, I would propose that consideration be given to the results of the benefit survey attached, and that the cap for employee health insurance be increased by $23 per month from $386 per month to $409 versus the average capatation amount of $465. We will then revisit this topic during the 202 budget discussions. Please note this survey group is the same that has been compared to in the past to get our capatation amount.) Page 11