City Council Meeting Date: September 3, 2024
To: Mayor and City Council
City Administrator Martig
From: Michelle Mahowald, Communications & Human Resources Director
Title
Consideration of 2025 Employee Benefits Renewal.
Body
Action Requested:
The Northfield City Council consider adopting a Motion approving rates and contributions for 2025 employee benefits coverage.
Summary Report:
The City of Northfield approved Gallagher Benefits Services as its broker for employee benefits in 2020. Gallagher Benefits Services Client Manager Colleen Schumann presented the renewal of health and other employee benefits to the employee benefits committee on August 1, August 12, and to the Council Employment Policy Committee on August 26. Gallagher’s presentation is attached.
Health Insurance History
In 2020, the City decided to switch from the Public Employees Insurance Plan (PEIP) to Blue Cross Blue Shield (BCBS). According to statute, the city must go out for proposal every 5 years for employee group benefits. This year, medical and dental quotes were requested from carriers. BCBS provided a final quote of 5% increase in premiums for 2025 and a 15% rate cap for 2026.
Rate adjustments are based on group make-up, include age and area, employer contribution assumptions, historic claims costs, a forecast of future claim costs, administrative costs, taxes and assessments.
Renewals (across all plans):
2012 Premium adjustment of minus 2%
2013 Premium adjustment plus 2.4%
2014 Premium adjustment plus 8.5%
2015 Premium adjustment of 3.1%
2016 Premium adjustment of 1.55%
2017 Premium adjustment plus 3.5%
2018 Premium adjustment plus .8%
2019 Premium adjustment plus 3.1%
2020 Premium adjustment of minus 5.9%
2021 Premium adjustment plus 3.59%
2022 Premium adjustment plus 8.6%
2023 Premium adjustment plus 9.0%
2024 Premium adjustment plus 1.5%
2025 Premium adjustment plus 5%
Financial Impacts:
2025 premium costs for full-time and part-time employer and employee shares and tables with the historical costs of medical insurance premiums are shown in the 2025 City of Northfield Health Insurance Renewal, 2025 Monthly Medical Costs, and 2025 Monthly Medical Cost Tables (attachments).
Note:
Labor contracts are settled through December 31, 2024 for all four union groups. Premium contributions were adjusted effective January 1, 2022, to $625 per month and 50/50 split on renewal change for single coverage and $850 per month and 50/50 split on renewal change for family coverage for full-time employees.
Effective January 1, 2022 part-time employees working 20-29 hours per week were eligible for health insurance. The employer contribution for part-time insurance is 50% of the full-time contribution to the premium and 50% of full-time contribution of Health Savings Account (HSA) for both single and family coverage.
Dental, Basic Life/AD&D, Long Term Disability Insurance
Guardian is the current dental provider of the low and high plans offered to employs. Guardian provided a rate hold for 2025. Guardian and Met-Life rates and benefits were most comparable and discussed at length by both committees. Two benefits were reviewed between the two plans: (1) Guardian provides a 5% benefit on major services and (2) $1,000 annual maximum benefit. Met-Life provides 25% and $1,250 annual maximum benefit which is more in line with “middle of the pack” benefit levels of municipal dental plans. Gallagher asked Guardian to quote Met-Life’s level of benefit for the two areas. Guardian quoted a 9% change in premium to match those benefits. The employee benefits committee recommends the change and takes on the increase in premium for other family members covered under the dental plan.
Full-time employees are eligible for dental coverage. 100% of the premium is paid for employees selecting the Low Plan.
Full-time employees are eligible for Basic Life + Accidental Death and Dismemberment (AD&D), Voluntary Life + AD& D, Long Term Disability, and Vision coverage. Rates will remain the same as 2024 for 2025.
Benefits Enrollment online enrollment platform
Human Resources staff will again use EASE online enrollment platform for 2025. The platform will show 2024 benefit selections and calculate benefit costs and options for employees.
Timelines:
Open enrollment educational meetings for employee and retiree benefits will begin in November. 2025 benefit information will be updated on the Inside Track (employee website portal). Enrollment will run through November 25.