04-08-1998 Council Agenda - Laserfiche WebLink

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515 Little Canada Road, Little Canada, MN 55117 -1600 (612) 484 -2177 / FAX: (612) 484 -4538 MEMORANDUM TO: Mayor Fahey and Members of the City Council FROM: Kathy Glanzer, Deputy Clerk DATE: April 2, 1998 RE: 1998 Health Insurance MAYOR Michael 1. Fahey COUNCIL Beverly Scalze Jim LaValle Steve Morelan Bob Pedersen ADMIMSTRATOR Joel R. Hanson Based on a 12.5% increase in health insurance coverage for City employees for 1998, underwriting forms were submitted to three other insurance companies. The results of this exercise was a proposal from Preferred One to provide essentially the same level of health insurance coverage at approximately 6.9% less than the 1997 rate provided by HealthPartners, the current carrier, and 17.5% from the proposed increase. 1998 health insurance premiums will be below the cap the City has placed on its contribution toward this cost. Therefore, there will be no out -of- pocket expenditure on the part of City employees toward health insurance coverage. The City's costs will decrease by $6,545.97 for the 1998 Budget. One City employee recently incurred a $300 deductible payment for out -of- network services. The resulting change in health care providers may result in another deductible having to be paid. (The Preferred One deductible for out -of- network services is $250.) Given the cost savings to the City in switching health care providers and in order to offset any inconvenience to City employees resulting from this change, staff feels reimbursement of additional deductible amounts that must be paid by employees which are a direct result of the switch is reasonable. This would be done on a prospective basis as costs are incurred. It is staff's recommendation that 1998 health insurance coverage be bound with Preferred One, and that the City reimburse any additional deductible expenses City employees may incur resulting from the change in health care providers. Page 10