City Council Minutes 11-13-2012 SpecialMINUTES
SPECIAL MEETING — MONTICELLO CITY COUNCIL
Tuesday, November 13, 2012 — 5:30 p.m.
Mississippi Room, Monticello Community Center
Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf
Absent: None
Other: Tracy Ergen, Wayne Oberg, Jeff O'Neill, DeEtte Wurm (insurance), Tony
Velishek (insurance)
1. Call to Order
Mayor Herbst called the Special Meeting to order at 5:30 p.m.
2. Purpose of Meeting: Discussion of Employee Benefits relative to health insurance
rate increase for 2013
Jeff O'Neill explained the purpose of the meeting is to outline the health insurance
program for the City and find ways to balance costs against benefits for employees. The
Personnel Committee requested a discussion with the full Council.
Jeff O'Neill honed over to Tracy Ergen for a presentation showing an overview of the
City's health insurance design plan and to get feedback from Council and staff.
Goal of the health benefit design is to manage the rising cost of healthcare for both the
city and employees. The design is transitioning away from traditional plan options to
HSA type plans. High Deductible Health Plans (HDHP) have benefits: lower premiums,
smart consumers, create a savings account to cover medical deductibles. When tied to an
HSA, employees can put money tax -free into a health savings account, which is always
available to the employee for use with health expenses.
A Transition Plan was first discussed in 2006 by Finance and HR staff. In 2011, the
HDHP plan was introduced and an HSA was added as an option to a traditional plan.
The 3 options were: #1 - $200/$600 deductible with $10 co -pays; #2 - $300/$900
deductible with $25 co -pays; #3 - $1500/$3000 deductible HSA. The City saved $58,658
in 2011 premiums with this change. Prior to 2011, all employees were on a traditional
plan. hi 2011, 46% of the employees elected to go to an HSA plan with the remainder
choosing one of the traditional plans. This continued into 2012 with 53% choosing an
HSA. 74% of employees have family plans in either the HSA or traditional option.
For 2013, renewal rates were announced to the City several months ago. The traditional
plans had higher rate increases than the HSA plan. The blended increase would be 8.7 %.
City staff study group (Jeff O'Neill, Wayne Oberg, Tracy Ergen) is proposing to
eliminate the $200 deductible base plan and keep the other 2 options, which include the
base plan of $300/$900 deductible with $25 co -pays and the HSA with $1750/$3500
deductible.
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It is recommended to stay with Health Partners as the provider for 2013. With option #1
base plan, the City would contribute $519.35 for single and $1167.47 for family with
employee contributing $162.04. For option #2 HSA, would have the City contribute
$519.35 for single and $1167.47 for family. With the HSA option, the premium is less
than the amount of the contribution so the additional amount would be a contribution
towards the employee's HSA.
Wayne Oberg explained how the benefit calculation would work in determining City and
employee share. Wayne Oberg also talked about the current contributions and the impact
for 2013 with increased deductibles for the HSA option. The net effect is a gain to the
employee due to the additional contributions from the City.
Wayne Oberg also discussed the budget impacts within each fund. The overall cost to the
City for Health benefits is $787,672 which is about 1 % increase for 2013.
Tracy Ergen talked about transition plans for 2014 -2015 with the recommendation to
establish the HDHP (HSA) as the base plan for contribution rates. A traditional plan
would require additional employee contributions. She also noted that the state's
Healthcare Exchange is scheduled to open in 2014 and Personnel Committee will be
looking into that further. In 2015, it is anticipated that the City would only offer HDHP
options.
Additional 2013 recommendations are related to changes in long -term disability and life
insurance providers. However, this would remove a popular eyecare provider so the City
is working with them to see if there is a solution. There is a recommendation to increase
the life insurance value from $25,000 to $30,000 to bring us closer to other cities. There
would be a net savings of approximately $4000 to the City with these changes.
Jeff O'Neill commented that he is open to questions from city employees.
Tom Pawelk asked about the cap for an HSA account. DeEtte Wurm explained that there
is no cap on the total that you can keep in an HSA account. There is a limit each year on
what can be added to an HSA. Tom Bose wanted to know the impact on his HSA
balance if he switches to a traditional option. Tracy Ergen explained that would be his
money to keep and use toward medical expenses. Dan Jones asked if the 2013 increase
was related to Monticello or to all Health Partner clients. Tracy Ergen confirmed that
that was based on Monticello experience only.
Mike Rogers asked if there was any potential for getting some benefits such as use of the
community center based on the much improved safety system that the City has developed
in the last few years. Tracy Ergen commented that they plan to discuss that with the
Personnel Committee at an upcoming meeting.
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Lloyd Hilgart asked if the 2013 increase was typical of most years. Tracy Ergen felt it
was close to what it has been the last few years. Prior to that, the increases were quite a
bit higher based on the traditional plans offered by the City.
3. Adiournment
TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 6:07 P.M.
LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0.
Recorder: Catherine M. Shuman ald-i
Approved: November 26, 2012
Attest:
C,i,fVAdininistrator
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