HomeMy WebLinkAboutResolution No. 2013-29Suggested by: Administration
CITY OF KENAI
RESOLUTION NO. 2013 -29
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING
THE CITY MANAGER TO ENTER INTO A CONTRACT WITH UNITED HEALTH CARE
TO PROVIDE EMPLOYEE HEALTH CARE TO CITY EMPLOYEES EFFECTIVE JULY 1,
2013.
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, AETNA through the State of
Alaska Political Subdivision Health Insurance Plan, provided renewal rates to the City
that will result in an estimated $1,698,619 in annual premium; and,
WHEREAS, United Health Care has provided a quote for comparable coverage that will
result in an estimated $1,542,545 in annual premium; and,
WHEREAS, the administration in conjunction with the City's Employee Health Care
Committee, a committee employee representative from each City department, analyzed
the United Health Care quote and schedule of coverage and recommends United
Health Care as the City's employee health care provider effective July 1, 2013; 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, the City Council authorizes the City manager to execute a contract with
United Health Care to provide group medical, dental and vision benefits to the
employees of the City of Kenai effective July 1, 2013
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 15th day of May,
2013.
PAT PORTER, MAYOR
ATTE
San ra Mo igh, City OClerk
Approved by Finance: y��
Ike
"Villaye 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
To: Rick Koch, City Manager
From: Terry Eubank, Finance Director
Date: May 9, 2013
Re: Recommendation for passage of Resolution 2013 -29.
The purpose of the memo is to recommend passage of Resolution 2013 -29 that will authorize a
switch in the provider of the City's employee health care. KMC 23.40.120 requires the City to
provide medical, dental and vision coverage to its employees. This coverage has been provided by
AETNA through the State of Alaska Political Subdivision Plan since January 2008.
Recently the City received a quote to provide this insurance from an alternate carrier that will result
in a minimum of 9% savings in premiums paid. Other benefits of the new carrier include the option
for employees with coverage from another source to opt out of coverage, flexibility in plan design,
and potential savings based upon the claims history of City employees.
The following is a financial comparison of the City's current plan and the proposed plan from UHC.
Health Care Premium
City Self- Insured Deductible
FSA/HRA Administration
Employee Life Insurance
Employee Wellness Program
Total Cost of Health Care
City Funded Portion
Employee Funded Portion
Total
AETNA
UHC
Difference
$1,698,619
$1,542,545
$156,074
194,512
194,512
-0-
12,000
12,000
-0-
16,800
16,800
-0-
20,000
20,000
-0-
$1.941.931
$178
$156.074
$1,769,827
91.14%
$1,627,613
91.14%
$142,214
172,104
8.86%
158,244
8.86%
13,860
$1.941931
100.00%
$178
1Q00%
$1��Q74
A comparison of employee monthly health care premiums is as follows:
Monthly Premium
UHC AETNA Difference
Employee
$ 61.00
$66.00
$ 5.00
Employee /Child(ren)
115.00
124.00
9.00
Employee /Spouse
132.00
144.00
12.00
Employee /Family
178.00
194.00
16.00
Part time Employee
324.00
354.00
30.00
With the assistance of the Employee Health Care Committee, the new plan was thoroughly evaluated
and was found to provide comparable coverage for City employees and their families. United Health
Care (UHC) is the largest single provider of coverage in the United States. In no way do I believe
the transition from AETNA to UHC will be without bumps. I do believe an estimated, minimum
savings of $156,074 in insurance premium for comparable coverage is worth the effort it is going to
require by Finance staff and City employees.
"Villaye with a Past, C# with a Future"
EMPLOYEE HEALTH CARE COMMITTEE
\Ike ci�0/ 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
KENAI \ALASKA Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014
To: Rick Koch, City Manager
From: The Undersigned Committee Members
Date: May 8, 2013
Re: Recommendation of United Health Care as the medical, dental & vision insurance
provider for City employees pursuant to KMC 23.40.120
The members of the City's Employee Health Care Committee, comprised of an employee
representative from each department (cannot be a Department Head), have met and reviewed
proposals to provide employee medical, dental and vision coverage to City employees by
AETNA, the City's current provider, and United Health Care. The committee was provided a
financial analysis prepared by the City's Finance Director, as well as plan descriptions and
schedule of benefits. The committee submitted questions and requests for clarification to United
Health Care, and reviewed United Health Care's responses.
Based upon this review the undersigned members believe the coverage quoted by United Health
Care is comparable to that currently offered by AETNA and recommend United Health Care as
the medical, dental & vision insurance provider for City employees pursuant to KMC 23.40.120,
effective July 1, 2013. This recommendation is contingent upon amendment to the City's Health
Reimbursement Agreement plan document to include provision that will allow reimbursement to
City employees for copayment amounts for prescription drug purchases.
& Beautification
Castimore, Finance
Erica Shinn, Airport
Corene Hall, City Clerk Office
/`
David Ross, Police
Jacqueline Van Hatten, Legal
Mark Anderson, Fire
Curt Wagoner, Public Works
Carver, Planning
-- .-