01-14-2015 Council Packet - Laserfiche WebLink

Home Browse Search

515 Little Canada Road, Little Canada, MN 55117-1600 (651) 766-4029 / FAX: (651) 766-4048 www.ci.little-eanada.mn.us MEMORANDUM TO: Mayor Keis and Members of the City Council FROM: Kathy Glanzer, City Clerk DATE: January 5, 2015 RE: 2015 Health Insurance Opt Out MAYOR John Keis COUNCII. Rick Montour Michael McGraw Tom Fischer Christian Torkelson ADMINISTRATOR Joel R. Hanson As the Council is aware, the City provides an Opt Out benefit for those employees eligible for family health insurance coverage and who have coverage through a spouse's health insurance plan. When an employee opts out of family health insurance, the result is a cost savings to the City even though the opt out benefit is paid to the employee. 2014 opt out payments for health insurance were $575 for staff and $1,126 for the City Administrator. The Parks & Recreation Director also received an opt out reimbursement given he and his spouse obtain health insurance through Medicare with supplement plans. The Director's 2014 opt out was $980 and consisted of reimbursement of Medicare and supplement plan costs and resulted in a savings to the City of $254.00 per month had both he and his spouse been on the City's coverage. With regard to 2015 opt out, the following is proposed: City Staff - 2015 opt out payment for staff is proposed to remain at $575 per month based on League of MN Cities Salary Survey results. This was discussed as part of 2015 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 of 80% of that cost. The cost of the City Administrator's family health insurance coverage for 2015 would be $1,559.97 per month. The 80% amount was proposed by him when he was able to move to his spouse's plan. That option is no longer available. The City Administrator's cost of health insurance coverage for himself is $932.71 per month. The cost to add his spouse on the City's plan would be $627.26 per month. Given the impact this change has on him financially, he would like to increase the percentage to 95%. Therefore, based on an opt out payment of the 95% proposed, his opt out payment would be $595.90 per month. Parks & Recreation Director — Both the Parks & Recreation Director and his spouse will obtain their health insurance coverage through Medicare for 2015. 'fhe City currently provides $1,280 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 $1,012, which results in a cost savings to the City of $268 per month.