City Council Meeting Date: October 5, 2021
To: Mayor and City Council
City Administrator Martig
From: Communications & Human Resources Director Mahowald
Title
Consideration of 2022 Employee Benefits Renewal.
Body
Action Requested:
The Northfield City Council consider adopting a motion approving rates and contribution for 2022 employee benefits coverage.
Summary Report:
The City of Northfield approved Gallagher Benefits Services as its broker for employee benefits in 2020. Gallagher presented the renewal of health, dental, and other employee benefits with the Council Employment Policy Committee on June 16 and with the employee benefits committee on September 27. Gallagher went to market for Life, Long Term Disability, and voluntary Vision insurance in August. Those results were presented by staff to the Council Employment Policy Committee on September 22, 2021.
The City decided to switch from the Public Employees Insurance Plan (PEIP) to Blue Cross Blue Shield in 2020. See slide 4 in attached presentation showing the change in premium with Blue Cross Blue Shield vs. what the premium would have been if the City stayed with PEIP.
See slide 7 in attached presentation for details on 2022 Blue Cross Blue Shield medical plan design changes:
1. Gender Confirming Care
2. Gene Therapy Treatment
3. 2022 Pharmacy Copay structure change
4. Sharecare Fitness Incentive
Rates 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. Gallagher negotiated a not to exceed 13% rate cap for 2023.
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%
Financial Impacts:
See separate attached PDF showing 2022 costs for full-time and part-time employer and employee shares.
Note:
Labor contracts are settled through December 31, 2021 for all four union groups. Premium contributions will increase 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 in 2022.
Effective January 1, 2022 part-time employees working 20-29 hours per week are 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).
Dental, Basic Life/AD&D, Long Term Disability Insurance
The dental renewal called for a 0% change from 2021 for the 2022 renewal. Eligibility maintains at 30 hours per week or more.
Gallagher went to market for proposals on Life, Long Term Disability, and a new benefit: optional Vision coverage.
Life Insurance - renew with Securian. 36 month rate guarantee to 12/31/2024. Benefit maximum increase to $500,000 from $300,000 and guarantee issue to $200,000 from $150,000. Estimated Annual Premium decreases from $14,038 to $12,850 -11.11% decrease. Eligibility maintains at 30 hours per week or more.
2. Long Term Disability - renew with Madison National Life. 36-month rate guarantee to 12/31/2024. Current long-term disability rate per $1,000 volume is $0.145. Renewal decrease $0.129. 2021 total annual cost $10,103. Renewal $8,988. -11.0% decrease. Eligibility maintains at 30 hours per week or more.
3. New - Voluntary Vision Coverage - Avesis MO Vision Plan. Coverage for lenses, frames, and contact lenses. Eye exam is covered under our Blue Cross Blue Shield medical plan at 100% as preventative coverage. Eligibility includes employees working 14 hours per week or more.
Rates per month
Employee (EE) Only $5.69
EE + Spouse $11.14
EE + Child(ren) $11.61
EE + Family $15.22
EASE online enrollment platform
Human Resources staff are moving to EASE online enrollment platform for 2022. The platform will calculate benefit costs and options for employees. It’s user friendly and costs less than upgrades to the Laserfiche benefits enrollment system we’ve used over the past few years.
Timelines:
Open enrollment for employee and retiree benefits will kick off as soon as staff have set up EASE. Typically, enrollment starts around November 1. If we can implement sooner we will hold enrollment in October. The Inside Track, employee website portal, will be updated with 2022 benefit information over the next few weeks. Gallagher Benefit Services and Human Resources will hold virtual and in person benefit educational meetings.