City Council Meeting Date: October 3, 2023
To: Mayor and City Council
City Administrator Martig
From: Michelle Mahowald, Communications & Human Resources Director
Title
Consideration of 2024 Employee Benefits Renewal.
Body
Action Requested:
The Northfield City Council consider adopting a Motion approving rates and contributions for 2024 employee benefits coverage.
Summary Report:
The City of Northfield approved Gallagher Benefits Services as its broker for employee benefits in 2020. Gallagher Benefits Services Area Vice President Jessica Nikunen presented the renewal of health and other employee benefits to the employee benefits committee on September 13 and to the Council Employment Policy Committee on September 18.
The City decided to switch from the Public Employees Insurance Plan (PEIP) to Blue Cross Blue Shield (BCBS) in 2020. Gallagher negotiated a 13% rate cap for 2024 BCBS medical coverage. BCBS delivered a 1.5% average increase from current rates (+$22,713).
One change was made to our 2024 plan design. The IRS increased the HSA deductible to $3,200 for single coverage and $6,400 for family coverage in 2024. See Medical Plans Renewal Summary - BlueCross BlueShield of Minnesota in the attached PDF. The changes are highlighted in blue print.
Rates 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%
Financial Impacts:
2024 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 2024 City of Northfield Health Insurance Renewal, 2024 Monthly Medical Costs, and 2024 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. The employer contribution will remain the same for 2023.
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).
Dental, Basic Life/AD&D, Long Term Disability Insurance
The 2024 dental renewal called for a 7% change from 2023 for the 2024 renewal. Eligibility for dental coverage maintains at 30 hours per week or more. 100% single coverage for employees selecting the Low Plan.
Eligibility and rates for Basic Life + Accidental Death and Dismemberment (AD&D), Voluntary Life + AD& D, Long Term Disability, and Vision coverage will remain the same as 2023.
EASE online enrollment platform
Human Resources staff will again use EASE online enrollment platform for 2024. The platform will show 2023 benefit selections and calculate benefit costs and options for employees.
Timelines:
Open enrollment educational meetings for employee and retiree benefits will begin in October. 2024 benefit information will be updated on the Inside Track (employee website portal). Enrollment will run through the middle of November.