HomeMy WebLinkAboutResolution No. 2014-30M
Suggested by: Administration
CITY OF KENAI
RESOLUTION NO. 2014 -30
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, 2014.
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, United Health Care,
provided premium renewal rates to the City that result in a 46% increase in health
care rates and a 19% increase in dental rates; and,
WHEREAS, PREMERA Blue Cross Blue Shield of Alaska has provided a quote for
comparable coverage at a $673,372 savings in annual premiums; and,
WHEREAS, the Administration met with City employees to discuss the proposed
switch of providers to PREMERA Blue Cross Blue Shield of Alaska 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 to provide group medical, dental and
vision benefits to the employees of the City of Kenai effective July 1, 2014
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 7th day of May,
2014.
-,0
PAT PORTER, MAYOR
A ST:
SaAdr,a Modigh ity Clerk
Approved by Finance: --
M
"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 1, 2014
Re: Recommendation for passage of Resolution 2014 -30.
The purpose of the memo is to recommend passage of Resolution 2014 -30 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
United Health Care since July 2013.
Recently the City received a quote to provide this insurance from an alternate carrier that will result
in a projected 46.7% savings in premiums paid. Employees will maintain the ability opt out of
coverage provided he /she has coverage from another source.
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
UHC
PREMERA
Difference
$2,114,752
$1,441,380
$673,372
156,975
156,975
-0-
12,000
12,000
-0-
16,800
16,800
-0-
20,000
20,000
-0-
$2 2�
$16�
$673.372
$2,118,831 91.31%
$1,504,103
91.31%
$142,214
201,696 8.69%
143,052
8.69%
13,860
$2 2 527 100. %
$1.647.155
100.00%
$156.074
A comparison of employee monthly health care premiums is as follows:
Monthly Premium
UHC PREMERA Difference
Employee
$ 82.00
$ 62.00
$ 20.00
Employee /Child(ren)
155.00
115.00
40.00
Employee /Spouse
180.00
126.00
54.00
Employee /Family
246.00
171.00
75.00
Part time Employee
433.00
306.00
127.00
Meetings conducted with employees regarding this proposed switch yielded no opposition.
recommend the switch in provider and believe it is in the best interest of the City and its employees.