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STAFF REPORT <br />DATE: October 15, 2024 <br /> CONSENT <br /> <br />TO: Mayor and City Council <br />FROM: Karissa Goers, Administrative Services Director <br />AGENDA ITEM: 2025 Medical Insurance Renewals <br /> <br />BACKGROUND: Staff have received the 2025 renewal rates from Minnesota Public Employee <br />Insurance Program (PEIP) - medical insurance, Health Partners – dental, and OCHS, Inc. - life insurance <br />and long-term and short-term disability. We changed benefit brokers this year to DCI -Dattilo Consulting <br />Inc. and met with representatives Grant Dattilo and Michelle Hoen on Wednesday to discuss renewal <br />rates. An open enrollment meeting for employees will be scheduled for October 28th. <br /> <br />ISSUE BEFORE COUNCIL: <br />Should Council approve the insurance renewals as recommended? <br /> <br />PROPOSAL DETAILS/ANALYSIS: <br />The 2025 renewal rate for medical insurance coverage from Minnesota Public Employee Program (PEIP) <br />decreased by about 1.5% which was unexpected given recent trends and the information given to us from <br />NFP earlier in the year. PEIP is the health insurance offered to non-represented employees working at least <br />30 hours per week. Currently, it includes three different plans with two insurance carrier options to allow <br />for maximum flexibility in meeting staff needs. One major change for 2025 is that PEIP is discontinuing <br />the Value plan and will only be offering two plans going forward: the High Option or the HSA Option plan. <br /> <br />Staff have reviewed the total premiums and potential costs to the City in order to recommend the City <br />contribution amounts towards the medical premiums and Health Savings Accounts (HSAs). In previous <br />years the City has paid 100% of the premiums for the Value and HSA single coverage plans and a portion <br />of the premiums for the High single plan and the family plans. Staff feel since the Value plan is being <br />discontinued, that the City can contribute 100% of the premiums for both the single plans and continue to <br />pay a portion of the premiums towards the family plans. These rates can be seen in the “2025 Benefit Rates <br />and Contributions” sheet attached. Staff recommend keeping the monthly City contributions to the Health <br />Savings Account coinciding with the HSA plans at the current rates of $125 for single and $250 for family <br />coverage. <br /> <br />The 2025 renewal rate for dental insurance coverage from Health Partners increased 5.5% across all plans. <br />We have not seen an increase in dental rates in three years so this is an expected increase that was budgeted <br />for. Staff recommends the City absorb this increase and keep employer dental rate contributions at the <br />same percentage as previous years. <br /> <br />Life Insurance rates remain the same for 2025. <br /> <br />Long-Term Disability and Short-Term Disability insurance rates have no change for 2025. <br /> <br />Currently our Short-Term Disability insurance waiting period is 21 days, meaning an employee must be <br />out of work for 21 days before the insurance kicks in to cover an eligible event. Staff is proposing to elect <br />a 7-day waiting period so that Short-Term disability is more accessible when needed. This would change <br />the STD rate from .31 to .415 which is increase of $5060 annually.