Agenda Packets - 2000/05/01 - Laserfiche WebLink

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Based upon a discussion with Laura Kushner, Director, Human Resources Management and Personnel Services at the League of Minnesota Cities, there are still a few public employers within the state that pay a percentage of health insurance premiums, however the trend has been away from such arrangements. She indicated that her past experience has been that it is difficult and costly to remove percentage of premium language in contracts, and at times, can also complicate changes from existing coverages and deductibles (ie changes in copays, prescription costs, maximum out of pocket costs, etc.). She did indicate, that she is aware of some employers who have agreed to share a large rate increase with employees on a percentage basis for one year (in other words, if the premium increase exceeds x%, Y% will be paid by the employer and Z% by the employee). For 2000, everyone except police union employees had the City contribution towards insurance increase from $350 to $360 effective January 1, 2000, which lowered the employee’s cost $10 for the first several months. Since police union employees did not have a contract in place, no change was made for their insurance costs. If the police contract provides a different City contribution than is presently provided to other employees, the City would have to determine whether it will grant such a change to other employees, and when such a change would take place. It would then also have to determine how to handle the first several months when employee’s contributions decreased, how to handle employees that have since retired, and would probably need to modify the collective bargaining agreement with public works employees if they were also to receive the same benefit change. Since the City’s insurance provider provides several different policies and coverages with different costs, it would also need to insure that language was clear as to whether it would pay %’s of the lowest cost policy and coverage or % of any policy and coverage. Assuming that the City would provide 80% of the cost of $10,000 life insurance and 80% cost of the lowest cost family health insurance cost, the following is the estimated cost: Police union $3,500 Other General Fund non-union 2,500 Other General Fund union 1,100 Other Funds non-union 1,200 Other Funds union 1,100 The above costs are for 2000 assuming a full year. Actual costs would depend upon classes of employees granted any change and effective dates of any such change. Funding At this time, I am unaware of any General Fund revenues that will be exceed the budget by any substantial amount, nor am I aware of any General Fund expenditure line item that will under budget by any large amount. Two other funding sources are contingencies and reserves. The 2000 budget for contingencies was $51,162. The General Fund reserves at the beginning of the year will be somewhere around three million dollars. Retirements and prior usages of reserves will reduce these amounts in 2000.