11-22-2004 CC - Laserfiche WebLink

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Item No: 9B Meeting Date: 11/22/04 Type of Business: Consent Agenda Administrator Review: _______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Resolution 6397 Establishing City Contribution Levels for Employees Electing the Health Savings Account Option in the Employee Benefits Program Background: The City Council has expressed interest in offering Health Savings Accounts (HSA) to active employees as a new type of insurance in place of traditional health maintenance organizations (HMO). It was thought that switching to HSA would be a lengthy and time-consuming process. We recently learned that the State of Minnesota Public Employees Insurance Program (PEIP) would begin offering an HSA in January. This can be offered to Mounds View employees as an option along side the traditional HMO plans. Since it doesn’t involve changing from PEIP to another insurance program, addition of the HSA could be accomplished quickly. An open enrollment meeting for City staff was held on November 4, 2004 to discuss all aspects of employee benefits for 2005. A representative of PEIP was at the meeting and introduced the HSA concept to employees. Numerous employees expressed interest in the concept and the PEIP representative agreed to come back for a second meeting devoted solely to HSA. One of the things needed for a productive meeting is to be able to state what the City’s contribution to benefits will be for an employee who elects the HSA. Discussion: Under the existing labor agreements with AFSCME and the Public Works Union, the City will contribute up to $682.30 per month toward employee benefits during 2005. This will be entirely used up on HMO premiums for any employee selecting family coverage. Employees selecting single HMO coverage have a remainder that they are allowed to use toward single or family dental insurance, basic life insurance, and supplemental life insurance. Employees made different selections from these options and the cost varies, but could exceed $400 per month in 2004 and could exceed $460 per month in 2005.