HomeMy WebLinkAboutResolution No. 2015-28Suggested by: Administration
CITY OF KENAI
RESOLUTION NO. 2015 -28
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING
THE CITY MANAGER TO ENTER INTO A CONTRACT WITH PREMERA BLUE CROSS
BLUE SHIELD OF ALASKA TO PROVIDE EMPLOYEE HEALTH CARE TO CITY
EMPLOYEES EFFECTIVE JULY 1, 2015.
WHEREAS, Pursuant to KMC 23.40.120 the City provides major medical, dental, and
vision insurance to its employees; and,
WHEREAS, the City's current provider for this insurance, PREMERA Blue Cross Blue
Shield of Alaska; and,
WHEREAS, the City currently utilizes PREMERA's Select Envoy Plan for which a
premium renewal rate increase of 37.9% was provided to the City; and,
WHEREAS, PREMERA Blue Cross Blue Shield of Alaska has provided a quote for
alternate coverage utilizing its Plus Envoy Plan at a premium increase of 20.75 %; and,
WHEREAS, the Administration met with City employees to discuss the proposed
switch of plans with no opposition from employees; and,
WHEREAS, providing quality health care is a component of a comprehensive
compensation package which allows the City to recruit and retain quality employees to
provide the services of the City for its residents.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, that the City Council authorizes the City manager to execute a contract with
PREMERA Blue Cross Blue Shield of Alaska, utilizing PREMERA's Plus Envoy Plan, to
provide group medical, dental and vision benefits to the employees of the City of Kenai
effective July 1, 2015
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of May,
2015.
PAT PORTER, MAYOR
ATTES .
Sandra o igh City Clerk
Approved by Finance:
u
"Villaye with a Past, C# with a Future"
TTo: Rick Koch, City Manager
FINANCE DEPARTMENT
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014
From: Terry Eubank, Finance Director
Date: May 13, 2015
Re: Recommendation for passage of Resolution 2015 -28.
The purpose of the memo is to recommend passage of Resolution 2015 -28 that will authorize a
switch in health care plans for City employees with coverage remaining with PREMERA Blue Cross
Blue Shield of Alaska. KMC 23.40.120 requires the City to provide medical, dental and vision
coverage to its employees. This coverage has been provided by PREMERA Blue Cross Blue Shield
of Alaska since July 2014.
Recently the City received a quote to provide the current insurance, PREMERA's Select Envoy
Plan, which would have resulted in a 37.9% increase in monthly premiums. A 37.9% premium
increase would have resulted in an increase of $584,895 in employee health care costs for FY16.
Working with PREMERA, the Administration is recommending alternate coverage using
PREMERA's Plus Envoy Plan which will reduce the premium increase to $318,338. Plan
differences between the Select Envoy and Plus Envoy plans do not exist if PREMERA preferred
providers are utilized. Selection of PREMERA participating or non - participating providers will
result in greater coinsurance to the employee and no out of pocket limits should non - participating
providers be used.
The following is a financial comparison of the City's current plan and the proposed plan.
Health Care Premium
City Self- Insured Deductible
FSA/HRA Administration
Employee Life Insurance
Employee Wellness Program
Total Cost of Health Care
FY15 PREMERA
$1,441,380
156,975
12,000
16,800
20,000
$1.647.155
FY16 PREMERA Difference
$1,759,718
$318,338
161,850
4,875
12,000
-0-
16,800
-0-
20,000
-0-
$1 368
$323.2.13
City Funded Portion $1,504,103 91.31% $1,795,780 91.14% $294,677
Employee Funded Portion 143,052 8.69% 174,588 8.86% 31.536
Total $1 �647 155 100.00% $ 100,00% $323.213
A comparison of employee monthly health care premiums is as follows:
Monthly Premium
FY15 PREMERA FY16 PREMERA Difference
Employee
$ 62.00
$ 72.00
$ 10.00
Employee /Child(ren)
115.00
134.00
19.00
Employee /Spouse
126.00
147.00
21.00
Employee /Family
171.00
201.00
30.00
Part time Employee
306.00
369.00
63.00
Meetings conducted with employees regarding this proposed switch yielded no opposition.
recommend the switch in plan and believe it is in the best interest of the City and its employees.