HomeMy WebLinkAbout#03 -Health Insurance RenewalSTAFF REPORT
DATE: November 4, 2020
TO: Honorable Mayor and Council
AGENDA ITEM 2021 Insurance Renewals
SUBMITTED BY: Jake Dickson, Assistant City Administrator
BACKGROUND:
On October 12 staff met with NFP Representative Andy Weitnauer to discuss renewal rates for health
insurance coverage from Minnesota Public Employee Insurance Program (PEIP). A renewal meeting for all
covered staff was held on October 21, 2020.
ISSUE BEFORE COMMITTEE:
Should Council approve the insurance renewals as recommended?
PROPOSAL:
The 2021 renewal rate for health insurance coverage from Minnesota Public Employee Insurance Program
(PEIP) increased by 9.7%, which is less than the anticipated rate change of 10% but higher than last years
5.17% increase due to an anticipated increase in claims in 2021 as healthcare facilities make services available.
PEIP has been well received by City staff, and offers a variable plan for differing levels of need.
FISCAL IMPACT:
The 9.7% increase in rates from PEIP results in an annual increase in cost to the City of $15,365.53.
The City will see no cost change in renewing dental, basic life insurance, short term disability insurance, and
long term disability insurance.
OPTIONS:
1)Approve Resolution No. 2020-91
2)Amend and approve Resolution No. 2020-91
3)Make no approval.
RECOMMENDATION:
“Move to approve Resolution No.2020-91”
ATTACHMENTS:
1)2021 PEIP renewal letter
2)Resolution No. 2020-91
CONSENT
September 24, 2020
Kristina Handt
City Of Lake Elmo
3800 Laverne Avenue No
Lake Elmo, MN 55042
RE: January, 2021 PEIP Renewal for City Of Lake Elmo
Dear Ms. Handt:
Thank you for your participation in the Public Employees Insurance Program (PEIP) Pool. We hope that the
program has fulfilled your insurance needs.
The January 2021 PEIP renewal of 9.7% is higher than the previous 10 year’s average of about 3%. Groups being
slotted for the first time could be slightly higher or lower than these figures. The reason for the higher increase this
year is based largely on two factors:
1. PEIP added approximately 200 groups in the last three years. While claims overall have increased, the loss
ratio of the new groups (2017, 2018 and 2019) is 113% (claims/premium). These groups have significantly
increased the program’s claims projections for 2020.
2. The COVID-19 virus has created a completely unforeseen claims impact. While short term claims (March –
July) may have slightly decreased, the long term impact could result in significantly higher future claims.
PEIP is taking a cautious view because it is so difficult to project what will happen with the C OVID-19 virus.
We hope this approach will get us back to the more traditional level of renewal increases.
While this is a difficult renewal, please remember the historical performance of the PEIP pool. Over the past 11
years program renewals have averaged 65% below annual trend/inflation figures. Even with the January renewal
factored into PEIP, the average renewal increase has been 3.7% over 11 years. The State and Deloitte (plan
actuaries) are reviewing the experience very closely and will react to any future changes in the plan experience.
History of PEIP Pool Renewals
July Group Average January Group Average
By combining all PEIP groups into
one pool, the risk is spread over a large group
of members (54,000) , providing more stability
of rates (historically below healthcare trends in
Minnesota).
July, 2010 = +8.0%
July, 2011 = -6.6%
July, 2012 = -3.3% January, 2013 = +5.0%
July, 2013 =+6.0% January, 2014 = + .5%
July, 2014 = +1.9% January, 2015 = +2.4%
July, 2015 = +2.0% January, 2016 = +5.5%
July, 2016 = +5.9% January, 2017 = +3.5%
July, 2017 = +1.3% January, 2018 = +.2%
July, 2018 = + .2% January, 2019 = +2.5%
July, 2019 = +3.7% January, 2020 = +5.2%
July, 2020 = +10.7% January, 2021 = +9.7%
Combined Pool Average = 3%
*History includes all ACA taxes
Page 2
Plan Changes for 2021
New to PEIP for 2021, the online enrollment portal is now available to be used for all groups. You should have
received an email with the instructions for your group access.
There are no material plan changes for 2021.
The PEIP 2021 clinic directory will be available on the PEIP website by October 15, 2020. Please make sure
members review their clinics for any cost level changes.
During open enrollment, your insurance eligible employees will have the opportunity to change health plans and
carrier networks. Please have the open enrollment completed by November 12, 2020. Updated plan summaries
and other enrollment information will be forwarded to you in a separate email. Forms can also be found on PEIP’s
website at www.innovomn.com. Retirees over age 65, individual Medicare Advantage and Cost policies are
available. Please call Innovo Benefits Administration at 1-800-829-5601 or contact your plan administrator for
more details or visit our website at www.innovomn.com.
Employees and dependents who wish to change health plans or networks must complete an Enrollment Form (or
online enrollment) for the change. A primary care clinic number for each member is required. Participants
staying with the same carrier who wish to change their primary care clinic must contact the carrier directly.
Primary care clinics can be changed at any time by calling the customer service number on the member’s ID card.
All completed Enrollments and any changes to your group's eligibility requirements must be submitted to
Innovo Benefits Administration, PEIP's administrator, by November 12, 2020 (please plan your open enrollment
to meet that deadline).
**** Please send enrollment/changes to Innovo for those employees making a plan, carrier or family change s
only. No form is required for those employees maintaining current coverage. *****
As the sponsor of the group insurance, you may change or add additional PEIP product options (e.g. life and dental
coverages) and change your eligibility requirements at this time. Eligibility criteria includes number of hours
worked per week to be eligible, new employee waiting periods before coverage becomes effective, etc. Any
changes made to your current eligibility policy must be made in writing and sent to Innovo.
A PowerPoint presentation that explains the plan choices and instructions on completing the em ployee enrollment
will be sent in a separate email with the enrollment materials.
Please submit all forms via fax, email or mail to:
Innovo Benefits Administration
Attn: PEIP
7805 Telegraph Road, Suite 110
Bloomington, MN 55438
Secure Fax: 952-746-3108
Email: service@innovomn.com
Page 3
Please forward the renewal rate information to your COBRA, Minnesota continuation, disabled, and early retiree
participants (if any). If PEIP manages your COBRA, Innovo will send out the information to these participants.
If you have any questions, please call 952-746-3101 or 1-800-829-5601 or email shawn@innovomn.com. We look
forward to another year of serving you.
Sincerely,
Shawn Byrne
Manager
CC: Agent (if applicable)
Follow-up Email: benefit charts, enrollment forms, renewal rates
CITY OF LAKE ELMO
1/1/2021 Renewal Rates
Advantage Plans
In accordance with MN Stat.471., renewal rates for retirees who are under age 65 are blended with the rates for
active employees. Eligible retirees currently on continuation are included in the rate structure.
2020 vs 2021 MEDICAL RATES
Current Rates Renewal Rates
2021
Advantage High Option Single
Family
$543.78
$1410.46
$594.82
$1546.44
Advantage Value Option Single
Family
$490.92
$1269.34
$536.78
$1391.50
Advantage HSA Option Single
Family
$386.70
$990.30
$422.36
$1085.10
If you work with an agent, please confirm commission amount with them. Rates shown include commission, if
Applicable.
2020 VS 2021 DENTAL RATES – PREVENTIVE PLAN (CLOSED TO NEW ENROLLMENT), if applicable
Current Renewal
Monthly Rate - Employer Pays 90% or More of Cost $11.30
$34.27
$11.72
$35.57
Monthly Rate - Employer Pays 50-89% Of Cost $12.29
$38.02
$12.76
$39.48
2020 VS 2021 DENTAL RATES – COMPREHENSIVE PLAN, if applicable
Current Renewal
Monthly Rate - Employer Pays 90% or More of Cost $38.70
$92.24
$40.16
$95.73
Monthly Rate - Employer Pays 50-89% Of Cost $42.81
$101.15
$44.43
$104.95
2021 LIFE RATES, if applicable
Basic Life/AD&D N/A
Dependent Life $1.18
Supplemental Life
(Per Thousand)
Age
<35
35-39
40-44
45-49
50-54
55-59
60-64
65-69
$.11
$.13
$.17
$.26
$.44
$.71
$.79
$1.49
CITY OF LAKE ELMO
WASHINGTON COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2020-91
A RESOLUTION APPROVING HEALTH CARE PLAN AND ESTABLISHING CITY
CONTRIBUTION TO EMPLOYEE HEALTH INSURANCE BENEFITS FOR 2021.
WHEREAS, the Lake Elmo City Council has determined that it is the best interest of the
City to provide a health insurance plan to help maintain the health of its current
employees and to enable the city to attract and retain a quality workforce; and
WHEREAS, it is now necessary to determine the insurance plan and contributions to
premium costs for the period from 1/1/2021 to 12/31/2021;
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL
OF THE CITY OF LAKE ELMO, WASHINGTON COUNTY, MINNESOTA, that
it should and hereby does approve the PEIP Advantage Plan for the period of 1/1/21 to
12/31/21; and
FURTHER BE IT RESOLVED, that for calendar year 2021, the City of Lake
Elmo’s contribution to the total cost of providing health insurance benefits shall be
as follows:
Advantage Plan: 90% of premium for single coverage and 80% of premium for
family coverage.
Value Option: 100% of premium for single coverage and 90% of premium for
family coverage
HSA Compatible: 100% of premium for single coverage and $100/month to HSA;
95% of premium for family coverage and $200/month to HSA.
This resolution was adopted by the City Council of the City of Lake Elmo on this day of
, 2020.
Mike Pearson, Mayor
ATTEST:
Julie Johnson, City Clerk