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ce 2cl* Ceanaik <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(612) 484-2177 / FAX: (612) 484-4538 <br />MEMORANDUM <br />TO: Mayor Hanson and Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: March 6, 1992 <br />RE: Employee Health Insurance Update <br />MAYOR <br />Raymond G. Hanson <br />COUNCIL <br />Beverly Scalze <br />Bill Blesener <br />Rick Collova <br />Jim LaValle <br />ADMINISTRATOR <br />Joel R. Hanson <br />As you will recall, last year we set a cap on the amount of <br />contributions to employee health insurance at $31,000. The <br />basis for doing so was to control the City's rising health <br />insurance costs. Also at that time, we obtained quotations <br />for other providers with health insurance coverage. Based <br />on these quotations, it was the decision of the employees <br />to utilize Medica (formerly PHP) as our health care <br />provider. The renewal of this policy occurred on March 1, <br />1992 and we experienced a 22.6% increase in premium <br />charges. <br />We evaluated obtaining insurance through other providers. <br />We did not find any comparable plans that were available at <br />less premium cost. The employees feel they would like to <br />keep the present level of benefits. Therefore, the <br />capitation level has now been reached and employees will be <br />responsible for a portion of health care costs associated <br />with dependent coverage. <br />Before addressing the employee's responsibility for costs, <br />I believe the Council must revisit the level of <br />capitation. I would recommend that it be adjusted in the <br />following manner: <br />* Increase by $3,000 for the addition of another <br />full -time employee (Parks and Recreation <br />Director). <br />* Increase by $700 to fund increase in cost for the <br />City Administrator's coverage pursuant to <br />employment agreement. <br />Page 11 <br />