Loading...
HomeMy WebLinkAboutResolution No. 2010-36he ay of KENAI, ALASKA CITY OF KENAI RESOLUTION NO. 2010 -36 Suggested by: Administration A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING SHARING COST SAVINGS FROM THE CALENDAR YEAR 2009 HEALTH INSURANCE PLAN WITH EMPLOYEES. WHEREAS, the City maintains a health insurance plan that includes a $1,500 individual or $3,000 family deductible; and, WHEREAS, the cost for this plan is significantly less than the premium for the 5200 individual and $400 family deductible plan; and, WHEREAS, the City self insures the $1,300 per individual and $2,600 difference in the deductible; and, WHEREAS, the maximum exposure for this self insurance was calculated to be $230,500; and, WHEREAS, the actual cost of the self insurance was $92,291 less than the maximum exposure; and, WHEREAS, as a motivation for the employees to reduce the City's self insured health care costs, when the plan was implemented the administration told the employees that it would seek to share Calendar Year cost savings with them; and, WHEREAS, the administration recommends that half the savings be shared with employees; and, WHEREAS, sufficient funds are appropriated in the various departmental health insurance accounts. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that in recognition of the fact that there was a savings of approximately $1,000 per employee in the Calendar Year 2009 health insurance plan due to under utilization of the self insurance cost calculated in the plan, the City Manager is authorized to pay $500 to each current employee that was covered by health insurance in 2009. Resolution No. 2010 -36 Page 2 of 2 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 16TH day of June, 2010. ATTEST: Carol L. Freas, City Clerk Approved by Finance: PAT PORTER, MAYOR the KENA ALASKA Rick Koch, City Manager From: Terry Eubank, Finance Director Date: June 9, 2010 Re: Resolution 2010 -36 "Village with a Past, c# with a Future" FINANCE DEPARTMENT 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 283 -7535 ext 221 FAX: 907 283 -3014 In January 2007 the City implemented a new health insurance plan that increased the employee's deductible substantially with the resulting insurance premium being significantly lower than the prior low deductible plan. The City then self insured for the increased deductible by reimbursing the employees through a healthcare reimbursement account for the increased deductible. During the first two years of the plan, the City saw annual savings of more than $90,000 of which it shared approximately half with the employees as recognition of the employee's efforts to reduce the City's self insured health care costs. Again in calendar year 2009 the City's expenditures for the self- insured health care costs was significantly under its maximum and budgeted amount. The City budgeted $230,500 for its portion of self insured health care yet incurred only $138,209 in actual expenditures for a saving of $92,291 or $1,025 per eligible employee. In recognition of their efforts and motivation for employees to continue to reduce the City's self insured health care expenditures the administration recommends that approximately half, $500.00 per eligible person, be shared with the employees.