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HomeMy WebLinkAboutResolution No. 2021-38KENAI CITY OF KENAI RESOLUTION NO. 2021-38 Sponsored by: Administration A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING CONTRACTS FOR EMPLOYEE HEALTH CARE AND OTHER BENEFITS EFFECTIVE JULY 1, 2021. WHEREAS, as part of a comprehensive employee benefit package and pursuant to KMC 23.40.120 the City provides group medical, dental, vision, life, and supplemental life insurance to its employees; and, WHEREAS, the City's current provider for group medical, dental and vision is PREMERA Blue Cross Blue Shield of Alaska, and UNUM for both life and supplemental life insurance; and, WHEREAS, PREMERA Blue Cross Blue Shield of Alaska has provided a renewal quote for continuing group medical and vision coverage at an average premium increase of 8.5% and continuing group dental at an average premium increase of 3%; and, WHEREAS, the standard benefit cycle is on a calendar year basis; and WHEREAS, the City plans to seek ways to improve the benefit value to employees and the City by considering plan and provider changes that would be effective on January 1, 2022; and WHEREAS, Unum has provided a quote with a $0.01 increase in rates, changing to $0.19 per $1,000 of group life insurance and AD&D with a two-year rate hold; and, WHEREAS, providing quality major medical, dental, vision, life, and supplemental life insurance 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 Section 1. That the City Council authorizes the City Manager to execute a contract with PREMERA Blue Cross Blue Shield of Alaska to provide group medical insurance, group dental insurance and group vision insurance to the employees of the City of Kenai effective July 1, 2021 for an estimated annual premium of $3,149,602. Section 2. That the City Council authorizes the City Manager to execute a contract with Unum to provide life and supplemental life insurance to the employees of the City of Kenai effective July 1, 2020 for an estimated annual premium of $ 20,587. Section 3. That the City Council authorizes funding of an employee only HRA at $1,800 including $1,650 for group medical deductible and prescription copay and $150 for vision related �y expenses. Resolution No. 2021-38 Page 2 of 2 r-, Section 4. That the City Council authorizes funding of an employee with dependent(s) HRA at $3,600 including $3,300 for group medical deductible and prescription copay and $300 for vision related expenses. Section 5. That this resolution takes effect July 1, 2021. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 2nd day of June, 2021. BRIAN GABRIEL SR., MAYOR ATTEST: e, 7, F -'")U A 0000 N41 Jami H inz, MMC, City Clerk 9 �'Approved by Finance:`%L� (j 0? L_, KENAI City of Kenai 1 210 Ficialgo Ave. Kenai, AK 99611-7794 1907.283.7535 1 www.lcenaixity MEMORANDUM TO: Mayor Brian Gabriel and Kenai City Council THROUGH: Paul Ostrander, City Manager FROM: Stormy Brown, Human Resources Terry Eubank, Finance Director DATE: May 26, 2021 SUBJECT: Resolution 2021-38 - Employee Health Insurance Renewal Resolution 2021-28 will authorize renewal of the City's employee health care plan and additional coverage types with PREMERA Blue Cross Blue Shield of Alaska and other providers as summarized here. KMC 23.40.120 requires the City to provide medical, dental and vision coverage for its employees. As negotiations with these health care providers are now complete, the following summaries and updates are provided in support of the negotiated FY22 City of Kenai employee benefits offerings. The Administration is recommending the following: 1. Renewal with PREMERA Blue Cross Blue Shield of Alaska for employee group medical insurance. Renewal premiums are an average of 8.5% higher than FY2021 rates. The City was not offered a one-month premium holiday, as it had been offered in the last two renewals. There are no changes being made to the plan design through the end of the calendar year. The Administration will begin a project to develop improved plan design and potential changes in vendors in an effort to find sustainable options for coverage in calendar year 2022 and beyond. 2. Renewal with PREMERA Blue Cross Blue Shield of Alaska for employee group dental insurance. Renewal premiums, include a 3% increase over last year. The project noted above is intended to address improvements to our group dental as well. 3. Renewal with UNUM for employer-provided and employee supplemental life insurance. UNUM provided a renewal quote with modest increases. The result of this renewal, including changes to the employee census, as well as the provider updates and related changes, will result in a total increase of $378,268 or 14.34% with a projected decrease in Employee Health Care Fund reserves of $191,323 in FY22. Total billings to City departments will be $2,823,679, a 7.09% increase; the employee cost share increase by 1% to 12% will generate employee contributions of $443,316, resulting in a 26.93% increase. Your support for the renewal as presented by the Administration is respectfully requested.