01-09-2013 Council Agenda - Laserfiche WebLink

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515 Little Canada Road, Little Canada, MN 551174600 (651) 766- 4029 / FAX: (651) 766 -4048 www.ci.l i t tle -ca nada. nm.us MEMORANDUM TO: Mayor Blesener and Members of the City Council FROM: Kathy Glanzer, City Clerk DATE: January 4, 2013 RE: 2013 Health Insurance Opt Out MAYOR Bill Blesener COUNCIL Rick Montour John Keis Michael McGraw Shelly Boss ADMINISTRATOR Joel R. Manson 2012 opt out payments for health insurance were $535 for staff and $894 for the City Administrator. The Parks & Recreation Director also received a partial opt out reimbursement given he obtained health insurance through Medicare with a supplement while his spouse remained on the City's health insurance plan. The Director's opt out consisted of reimbursement of his Medicare costs and payment of his spouse's insurance premium and resulted in a savings to the City of $155.75 per month had both he and his spouse been on the City's coverage. With regard to 2013 opt out, the following is proposed: City Staff - 2012 opt out payments for staff to remain at $535 per month based on League of MN Cities Salary Survey results. This was discussed as part of 2013 Budget discussions. City Administrator — The City Administrator's contract provides for payment of 100% of his family health insurance costs, or an opt out payment. The Administrator's opt out was based on 80% of the City's family health insurance costs. Over the past couple of years the previous Finance Director recommended changes in the way the City Administrator's opt out was calculated first tying the increase to the rate of health insurance premium increase (11.5% for 2013) and then tying increases to the same percentage increase that is applied for City Staff opt out. In discussing this issue with the City Administrator and in an attempt to return to a consistent policy, it would be our recommendation that opt out return to 80% of the City's family health insurance costs. City family health insurance is $1,282 per month, resulting in an opt out of $1,026 per month. Parks & Recreation Director — Both the Parks & Recreation Director and his spouse will obtain their health insurance coverage through Medicare for 2013. The City currently provides $1,000 per month for family health insurance coverage. Our proposal is to reimburse the Director for his health insurance costs as well as factor an offset relative to the tax implications. The result would be an opt out amount of $859.50, which results in a cost savings to the City of $140.50 per month.