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<br />WS – Item #4 <br /> <br />WORK SESSION STAFF REPORT <br />Work Session Item No. 4 <br /> <br />Date: June 17, 2013 <br /> <br />To: City Council <br /> <br />From: Jeff Karlson <br /> <br />Re: Update on Health Care Reform <br /> <br /> <br />Background <br /> <br />Staff has been trying to stay abreast of the health care reform act by particip ating in various <br />seminars. As expected, implementing the new law has presented unique challenges and <br />opportunities for employers. <br /> <br />In particular, an individual coverage mandate, the creation of insurance exchanges, and the <br />availability of federal premium s ubsidies for low -income workers in 2014 require employers to <br />decide whether to “play” (sponsor a health benefit plan that meets specific minimum <br />requirements) or “pay” (forgo plan sponsorship, pay a penalty and require employees to secure <br />coverage for them selves through the Minnesota Exchange). <br /> <br />However, the decision is more complex than simply “play” versus “pay.” There are a number of <br />approaches to help employers reshape their health benefits programs. In the weeks ahead, the <br />Council will need to select the approach that provides the optimal value in terms of both cost and <br />talent. In other words, finding the “sweet spot” whereby the City offers adequate benefits to <br />retain the talent we currently have. <br /> <br />Understanding the Affordable Care Act (ACA) and h ow to implement it is further complicated <br />by the fact that the IRS has not defined the meaning of several provisions in the mandate. <br /> <br />Another consideration is state law regarding the “aggregate value of benefits” that applies to <br />union contracts. This stat e law provides that “the aggregate value of benefits provided for <br />employees covered by a collective agreement shall not be reduced unless the public employer <br />and appropriate bargaining unit agree to a reduction in benefits ” (Minn. Stat. Sec. 471.6161). <br />Th is means that contributions toward premiums, HSA’s, and waiver of coverage will continue to <br />apply. T he City cannot get out of the insurance game like a private company can . <br /> <br />Health plans must provide a Summary of Benefits and Coverage to participants and <br />beneficiaries. Employers must provide employees a written notice of the ACA’s health <br />insurance exchanges by October 1, 2013. <br /> <br />Staff will arrange for Johnson -McCann Benefits to present information about the ACA at a <br />f uture work session.