HomeMy WebLinkAboutResolution No. 2022-42KENAI
CITY OF KENAI
RESOLUTION NO. 2022-42
Sponsored by: Administration
A RESOLUTION AUTHORIZING CONTRACTS FOR EMPLOYEE HEALTH CARE AND OTHER
BENEFITS EFFECTIVE JULY 1, 2022.
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 and dental coverage at a premium increase of 4.0%; 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, 2023; and
WHEREAS, the City's contract with Unum was negotiated last year and included a two-year rate hold
provision meaning there is no increase in FY2023; 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, 2022 for an estimated annual
premium of $3,075,669, with an option to cancel after 6 months.
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, 2022
for an estimated annual premium of $ 20,516.
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 expenses.
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.
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Resolution No. 2022-42
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Section 5. That this resolution takes effect July 1, 2022.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 1st DAY OF JUNE, 2022.
EST:
AQ,, S�- -
Michelle 4 MMC, City Clerk
Approved by Finance: f/,1
Brian Gabriel Sr., Mayor
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K N A
City of Kenai 1210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www.kenaixity
MEMORANDUM
TO: Mayor Brian Gabriel and Kenai City Council
THROUGH: Paul Ostrander, City Manager
FROM: Christine Cunningham, Human Resources Director
Terry Eubank, Finance Director
DATE: May 24, 2022
SUBJECT: Resolution 2022-42 - Employee Health Insurance Renewal
Kenai Municipal Code 23.40.120 requires the City to provide life, major medical, dental, and vision
coverage for eligible employees. Resolution 2022-42 authorizes the renewal of the City's
f employee health insurance plan with Premera Blue Cross Blue Shield of Alaska and life insurance
with Unum Group. The Administration reviewed health and life insurance renewals, market
i options, plan design, and contribution strategies with our health and life insurance benefits
consultant and recommend the following renewals, which represent no change to the current plan
design at this time:
Medial/ Rx/ Vision
Direct renewal with Premera Blue Cross Blue Shield of Alaska with a 4% increase from FY22
plan costs resulting in an estimated plan year cost of $2,957,083, aggregated through 12
months.
Dental
Direct renewal with Premera Blue Cross Blue Shield of Alaska with a 4% increase from FY22
plan costs resulting in an estimated plan year cost of $118,586, aggregated through 12
months.
Life Insurance
Direct renewal with Unum Group for employer-provided basic life insurance at the same cost
as FY22, $20,516.
This renewal includes changes to the employee census and will result in an increase in Employee
Health Care Fund reserves of $107,419 from FY22. The City's share of the total cost of the health
plan, including broker fees, HRA administration fees, and wellness program costs and fees, is
estimated at $3,046,664. The employee cost share will increase by 1%, from 12% to 13%,
generating an estimated $456,576 in employee health plan contributions.
V There is no change to the basic life and Accidental Death & Dismemberment (AD&D) insurance
coverage paid in full by the City. This coverage includes an Employee Assistance Program (EAP),
and employees are able to purchase a variety of voluntary additional life and supplemental
insurance coverages under the plan, which are paid by the employee through payroll deduction.
In addition to the life, medical, dental, and vision insurance, as part of the health insurance plan,
the City provides a wellness program and Health Reimbursement Arrangement (HRA), which
reimburses employees for medical deductible and prescription copays. Resolution 2022-42
authorizes funding for the employee HRA in the amount of $1,800 per employee, including $1,650
for group medical deductible and prescription copay and $150 for vision -related expenses for the
employee -only; and $3,600 per employee, including $3,300 for group medical deductible and
prescription copay and $300 for vision -related expenses for employees with dependent coverage.
The Administration plans to work with the City's consultant to develop an improved plan design
with potential changes in providers in an effort to find sustainable options for coverage beginning
in the calendar year 2023.
Your support for the employee health insurance plan renewal is respectfully requested and will
allow the Administration to move forward with FY23 benefits open enrollment for employees.
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