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Home My WebLink About2013-2014 Employee BenefitsCM or SEBASTIM ,yt = ud +eY. HOME OF PELICAN ~ISLAND D ► 1 _ 7��fyu 110IF1 rl Subject: Employee Group Medical, Agenda No. )'2- 1� 13. 113 Dental, Vision and EAP Coverage for FY 2014 Department strative Services: .4Origin4 Ap rove or Submittal by: City Clerk: City Attorn Af Mi i, City Manager Date Submitted: July 30, 2013 For Agenda of. August 14, 2013 Exhibits: Gehring Group Evaluation of Health, Dental & Vision Renewals Employee Benefits Executive Cost Summary — Employee hired prior to 10 /1 /11 Employee Benefits Executive Cost Summary — Employee hired after 10 /l /11 EXPENDITURE AMOUNT BUDGETED: APPROPRIATION REQUIRED: N/A Included in the 2013 -2014 REQUIRED: N/A Proposed Annual Budget SUMMARY Effective September 30, 2013, the city's group medical, vision and EAP insurance contracts will expire. In order to provide these insurances to employees, the City retains the professional services of the Gehring Group (West Palm Beach, FL) as our insurance broker. As our broker, the Gehring Group provides the following services (1) uses their position in the market to solicit discount insurance rates; (2) conducts annual insurance Request For Proposals (RFPs) if necessary; (3) reviews proposals; (4) assists in employee open enrollment; (5) responds to employee claim issues; (6) compiles employee benefits database; (7) prepares and provides the employee benefit booklets; (8) provides updates to City Council; and (9) provides insurance consultation. The fee for their service is 2% of the annual premium which is built into the monthly premium rates. On May 22, 2013 as you will recall Christian Bergstrom, of the Gehring Group provided an update on the state of the City's health insurance claims as well as Health Care Reform. The City's claims experience continues to improve, however there will be additional fees associated with Health Care Reform. The planning strategy for the FY 14 group health insurance was to continue to monitor the claims experience and examine the initial Florida Blue (formally Blue Cross Blue Shield of Florida) renewal offer, and decide whether RFP or renewal negotiations was the more appropriate course of action. Additionally, in Fiscal Year (FY) 13 when the City went out for RFP for all group insurances, we selected the lowest bidder, Assurant, for the dental coverage. Unfortunately, though the premium rates were lower, there was a tremendous out -of- pocket expense for many employees on several treatments. The recommendations for the FY 2014 group insurances are as follows; Medical Insurance ✓ Florida Blue, our current provider, came in with an initial renewal rate increase of 9.4 %, but has agreed to lower their offer to a 4.6% increase if the City accepts the dental proposal and renews the current vision plan. Recommendation is to renew with Florida Blue, Blue Options HDHP 05190/05191 for one -year. Dental Insurance ✓ Assurant is offering no change in rates while Florida Combined Life (FCL), subsidiary of Florida Blue, is offering a 12.4% increase for the same dental plan the City had the prior year. The premium rates FCL have provided effective October 1, 2013, are lower than their proposal was for last year. Recommendation is to change providers from Assurant to Florida Combined Life for one -year. Vision Insurance ✓ Davis Vision, a subsidiary of Florida Blue and our current provider, is offering no change in rates with a 24 -month guarantee. Recommendation is to renew with Davis Vision for two - years expiring 1011115. EAP ✓ MHNet, our current provider, is offering no change in rates for one -year. Recommendation is to renew with MHNet for one -year. Financial Analysis Based on the above recommendations for all insurance coverage's, FY 14 employer costs will increase by $33,500. However staff's budget recommendation includes a 5% insurance increase assumption. Further, because of the City's new Health Reimbursement Account (HRA) program, our current unused balance is $94,163. Staff estimates health reimbursement charges in the amount of $40,000 to complete the FY, leaving an approximate roll forward balance to the next FY of $54,163. This amount will more than adequately cover any increases and leave the City within our estimates for FYI 4. Our experiences with Florida Blue and MH Net continue to be positive, and there are many physicians participating in these plans within the area. The Gehring Group will be presenting this item, and along with City staff, is available to answer any questions. RECOMMENDED ACTION Move to approve the following for Fiscal Year 2014: (1) Renew Employee Group Medical with Florida Blue for one -year. (2) Award Employee Group Dental to Florida Combined Life for one -year. (3) Renew Employee Group Vision to Davis Vision for two- years. (4) Renew Employee Assistance Program (EAP) to MHNet for one -year. City of Sebastian Health Insurance RFP Evaluation Effective Date: October 1, 2013 CURRENT INITIAL RENEWAL GEHRING AGROUP IN S U R A N C E B ROK ER S, & CONS U L T A N TS NEGOTIATED RENEWAL Plan Basics BlueOptions In Network HDHP 05190 IF 05191 I Out of Network BlueOptions In Network 1 1 05191 Out of Network BlueOptions In Network = Out of Network Lifetime Maximum Unlimited Unlimited Unlimited Deductible Aggregate Deductible Aggregate Deductible Aggregate Deductible Single $1,500 $3,000 $1,500 $3,000 $1,500 $3,000 Family $3,000 $6,000 $3,000 $6,000 $3,000 $6,000 Out of Pocket Maximum Includes Deductible and Coinsurance includes Deductible and Coinsurance Includes Deductible and Coinsurance Single $4,500 $9,000 $4,500 $9,000 $4,500 $9,000 Family $9,000 $18,000 $9,000 $18,000 $9,000 $18,000 Coinsurance 20% 40% 20% 40% 20% 40% Office Visits Physician Office Visit 20% after CYD 40% after CYD 20% after CYD 40% after CYD 20% after CYD 40% after CYD Specialist Visit 20% after CYD 40% after CYD 20% after CYD 40% after CYD 20% after CYD 40% after CYD Pre -Natal 20% after CYD 40% after CYD 20% after CYD 40% after CYD 20% after CYD 40% after CYD Physical Exam Benefit No Charge 40% No Charge 40% No Charge 40% Independent Clinical Lab CYD 40% after CYD CYD 40% after CYD CYD 40% after CYD Advanced Imaging 20% after CYD 40% after CYD 20% after CYD 40% after CYD 20% after CYD 40% after CYD Chiropractic 20% after CYD 40% after CYD 20% after CYD i 40% after CYD 20% after CYD 40% after CYD Urgent Care Center 20% after CYD 40% after CYD 20% after CYD 40% after CYD 20% after CYD 40% after CYD Hospital Tier 1/ Tier 2 Tier 1/ Tier 2 Tier 1/ Tier 2 Inpatient 20% / 25% after CYD 40% after $500 POD + CYD 20% / 25% after CYD 40% after $500 POD + CYD 20% / 25% after CYD 40% after $500 POD + CYD Outpatient 20% / 2S% after CYD 40% after CYD 20% / 25% after CYD 40% after CYD 20% / 25% after CYD 40% after CYD Emergency Room Visit 20% after CYD 20% after CYD 20% after CYD 20% after CYD 20% after CYD 20% after CYD Physician Services 20% after CYD 20% after INN CYD 20% after CYD 20% after INN CYD 20% after CYD 20% after INN CYD Mental Health Tier 1/ Tier 2 Tier 1/ Tier 2 Tier 1/ Tier 2 Inpatient 20% after CYD 40% after $500 POD + CYD 20% after CYD 40% after $500 POD + CYD 20% after CYD 40% after $500 POD + CYD Outpatient 20% after CYD 40% after CYD 20% after CYD 40% after CYD 20% after CYD 40% after CYD Prescription Drugs Generic CYD + $10 CYD + $10 CYD + $10 Brand Name CYD + $30 50% after CYD CYD + $30 50% after CYD CYD + $30 50% after CYD Non Preferred Brand CYD +$50 CYD +$50 CYD +$50 Tier N/A N/A N/A N/A N/A N/A Mail Order (90 day supply) 2.5x Retail Copay 50% after CYD 2.5x Retail Copay 50% after CYD 2.5x Retail Copay 50% after CYD Rates: Assumes purchase of FCL Dental & Vision EE Only 54 $476.83 $519.69 $496.65 EE +Spouse 15 $1,065.22 $1,168.72 $1,116.91 EE + Child(ren) 15 $823.53 $903.54 $863.48 EE +Family 12 $1,396.42 $1,532.10 $1,464.18 Monthly Premium $70,837.11 $77,532.36 $74,095.11 Annual Premium $850,045.32 $930,388.32 $889,141.32 $Increase N/A $80,343.00 $39,096.00 % Increase N/A 9.5% 4.6% City of Sebastian PPO Dental RFP Evaluation Effective Date: October 1, 2013 GEHRING AGROUP INSURANCE 8 R 0 K RSI & CONSULTANTS CURRENT RENEWAL ALTERNATIVE Nl SCHEDULE Plan Basics In Network Non Network In Network Non Network In Network Non Network Calendar Year Maximum $1,000 $1,000 $1,000 Deductibles Single $50 $50 $50 $50 $50 $50 Family $150 $150 $150 $150 $150 $150 Deductible Waived for Preventive Svcs Yes Yes Yes Yes Yes Yes Benefits Preventative 100% 100% 100% 100% 100% 100% Basic 80% 80% 80% 80% 80% 80% Major 50% 50% 50% 50% 50% 50% Orthodontia (Child Only) 50% 50% 50% 50% 50% 50% Service Information Out of Network Reimbursement 90th UCR 90th UCR 90th UCR Waiting Period - .Timely Entrants 12 Months: Ortho and Major 12 Months: Ortho and Major None Orthodontia Lifetime Max $1,000 $1,000 $1,000 Endodontics /Periodontics Major Major Major Rate Guarantee Expires 09/31/2014 12 Months 12 Months Employee 50 $21.85 $21.85 $24.56 Employee + Spouse 28 $44.10 $44.10 $49.56 Employee + Child(ren) 9 $60.57 $60.57 $68.07 Family 26 $82.83 $82.83 $93.08 Monthly Premium $5,026.01 $5,026.01 $5,648.39 Annual Premium $60,312.12 $60,312.12 $67,780.68 $ Increase N/A $0.00 $7,468.56 % Increase N/A 0.0% 12.4% City of Sebastian Vision RFP Evaluation Effective Date: October 1, 2013 GEHRING AGROUP INSURANCE BROA E A 5 A & CON SO LT ANT S CURRENT RENEWAL Davis Davis Vision Network In Network Non Network In Network Non Network Exam Copay $10 $10 Materials Copay $25 $25 Frequency Exam Copay 12 months 12 months Lenses 12 months 12 months Frames 24 months 24 months Benefits Payable Copay Reimbursement Copay Reimbursement Eye Exam $10 $30 $10 $30 Single Lenses $25 $25 $25 $25 Bifocal Lenses $25 $35 $25 $35 Trifocal Lenses $25 $45 $25 $45 Lenticular Lenses $25 $60 $25 $60 Lenses and Frames Reimbursement Reimbursement Contact Lenses (Elective) $100 $75 $100 $75 Contact Lenses Paid in Full $225 Paid in Full $225 (Medically Necessary) Frames $25 Copay $30 $25 Copay $30 Rate Guarantee Expires 09/31/13 24 Months Employee 50 $4.24 $4.24 Family 63 $12.69 $12.69 Monthly Premium $1,011.47 $1,011.47 Annual Premium $12,137.64 $12,137.64 $Increase N/A $0.00 Increase N/A 0.0% Employee Benefits Executive Cost Summary GEHRING AGROUP Effective Date: October 1, 2013 Contributions for EE's hired a f t e r 10/1/11 1 N S U N A N C E B R O K E R SA A C O N S U L T A N T S COVERAGE CURRENT RENEWAL HEALTH BlueCross BlueShield - 05190 05191 BlueCross BlueShield - 05190 05191 Open Access Point of Service Total Employer Employee Total Employer Employee Employee Only 53 $476.83 $451.83 $25.00 $496.65 $471.65 $25.00 Employee + Spouse 16 $1,065.22 $598.93 $466.29 $1,116.91 $626.72 $490.20 Employee + Child(ren) 13 $823.53 $538.51 $285.03 $863.48 $563.36 $300.12 Employee + Family 11 $1,396.42 $681.73 $714.69 $1,464.18 $713.53 $750.65 MONTHLY PREMIUM $68,382.02 $48,029.40 $20,352.62 $71,524.23 $50,197.40 $21,326.84 ANNUAL PREMIUM $820,584.24 $576,352.77 $244,231.47 $858,290.76 $602,368.74 $255,922.02 $ INCREASE N/A N/A N/A $37,706.52 $26,015.97 $11,690.55 INCREASE N/A N/A N/A 4.6% 4.5% 4.8% ACCOUNT HEALTH REIMBURSEMENT Total Employer Employee Total Employer Employee Employee Only 53 $1,500.00 $1,500.00 $0.00 $1,500.00 $1,500.00 $0.00 Employee + Spouse 16 $3,000.00 $3,000.00 $0.00 $3,000.00 $3,000.00 $0.00 Employee + Child(ren) 13 $3,000.00 $3,000.00 $0.00 $3,000.00 $3,000.00 $0.00 Employee + Family 11 $3,000.00 $3,000.00 $0.00 $3,000.00 $3,000.00 $0.00 ANNUALCOST DENTAL $199,500.00 $199,500.00 Assurant $0.00 $199,500.00 $199,500.00 Florida Combined Life $0.00 PPO Total Employer Employee Total Employer Employee Employee Only 50 $21.85 $21.85 $0.00 $24.56 $24.56 $0.00 Employee + Spouse 28 $44.10 $27.41 $16.69 $49.56 $30.81 $18.75 Employee + Child(ren) 9 $60.57 $31.53 $29.04 $68.07 $35.44 $32.63 Employee + Family 26 $82.83 $37.10 $45.74 $93.08 $41.69 $51.39 MONTHLY COST $5,026.01 $3,108.29 $1,917.72 $5,648.39 $3,493.56 $2,154.83 ANNUAL COST $60,312.12 $37,299.48 $23,012.64 $67,780.68 $41,922.69 $25,857.99 $ INCREASE N/A N/A N/A $7,468.56 $4,623.21 $2,845.35 % INCREASE N/A N/A Hartford N/A 12.4% 12.4% 12.4% LIFE Total Employer Employee Total Hartford Employer Employee Life Rate / $1,000 $0.19 $0.19 $0.00 $0.19 $0.19 $0.00 AD &D Rate/ $1,000 $0.030 $0.030 $0.00 $0.030 $0.030 $0.00 Total Life and AD &D $0.220 $0.220 $0.00 $0.220 $0.220 $0.00 Life Volume $1,300,500.00 $1,300,500.00 $0.00 $1,300,500.00 $1,300,500.00 $0.00 MONTHLY PREMIUM $286.11 $286.11 $0.00 $286.11 $286.11 $0.00 ANNUALPREMIUM $3,433.32 $3,433.32 $0.00 $3,433.32 $3,433.32 $0.00 $ INCREASE N/A N/A N/A $0.00 $0.00 $0.00 INCREASE N/A N/A N/A 1 0.0% 0.0% 0.0% LONG TERM DISABILITY Hartford Hartford Total Employer Employee Total Employer Employee LTD Rate / $100 $0.370 $0.370 $0.00 $0.370 $0.370 $0.00 LTD Volume $508,049.00 $508,049.00 $0.00 $508,049.00 $508,049.00 $0.00 MONTHLY PREMIUM $1,879.78 $1,879.78 $0.00 $1,879.78 $1,879.78 $0.00 ANNUAL PREMIUM $22,557.38 $22,557.38 $0.00 $22,557.38 $22,557.38 $0.00 $ INCREASE N/A N/A N/A $0.00 $0.00 $0.00 INCREASE N/A N/A N/A 0.0% 0.0% 0.0% Total Employer Employee Total Employer Employee Employee 50 $4.24 $4.24 $0.00 $4.24 $4.24 $0.00 Family 63 $12.69 $6.35 $6.34 $12.69 $6.35 $6.34 MONTHLY PREMIUM $1,011.47 $612.21 $399.26 $1,011.47 $612.21 $399.26 ANNUALPREMIUM $12,137.64 $7,346.49 $4,791.15 $12,137.64 $7,346.49 $4,791.15 $ INCREASE N/A N/A N/A $0.00 $0.00 $0.00 % INCREASE N/A N/A N/A 0.0% 0.0% 0.0% SUMMARY TO TAIL ANNUAL PREMIUM Total $1,118,524.70 Employer $846,489.44 Employee $272,035.26 Total $1,163,699.78 Employer $877,128.62 Employee $286,571.16 $ INCREASE N/A N/A N/A $45,175.08 $30,639.18 $14,535.90 INCREASE N/A N/A N/A 4.0% 5.3% Employee Benefits Executive Cost Summary GEHRING /GROUP Effective Date: October 1, 2013 Contributions for EE's hired prior to 10/1/11 I N S U R A N C E 9 A O A L A sI : CONSULTANTS COVERAGE I CURRENT RENEWAL HEALTH BlueCross BlueShleld - 05190 05191 BlueCross BlueShield - 05190 OS191 Open Access Point of Service Total Employer Employee Total Employer Employee Employee Only 53 $476.83 $451.83 $25.00 $496.65 $471.65 $25.00 Employee + Spouse 16 $1,065.22 $746.03 $319.20 $1,116.91 $781.78 $335.13 Employee + Child(ren) 13 $823.53 $625.18 $198.35 $863.48 $655.07 $208.42 Employee + Family 11 $1,396.42 $911.63 $484.80 $1,464.18 $955.42 $508.77 MONTHLY PREMIUM $68,382.02 $54,038.61 $14,343.42 $71,524.23 $56,531.34 $14,992.89 ANNUAL PREMIUM $820,584.24 $648,463.26 $172,120.98 $858,290.76 $678,376.08 $179,914.68 $ INCREASE N/A N/A N/A $37,706.52 $29,912.82 $7,793.70 INCREASE N/A N/A N/A 1 4.6% 4.6% 4.5% ACCOUNT HEALTH REIMBURSEMENT Total Employer Employee Total Employer Employee Employee Only 53 $1,500.00 $1,500.00 $0.00 $1,500.00 $1,500.00 $0.00 Employee + Spouse 16 $3,000.00 $3,000.00 $0.00 $3,000.00 $3,000.00 $0.00 Employee + Child(ren) 13 $3,000.00 $3,000.00 $0.00 $3,000.00 $3,000.00 $0.00 Employee + Family 11 $3,000.00 $3,000.00 $0.00 $3,000.00 $3,000.00 $0.00 ANNUAL COST DENTAL $199,500.00 $199,500.00 Assurant $0.00 $199,500.00 $199,500.00 Florida Combined Life $0.00 PPO Total Employer Employee Total Employer Employee Employee Only 50 $21.85 $21.85 $0.00 $24.56 $24.56 $0.00 Employee + Spouse 28 $44.10 $32.98 $11.13 $49.56 $37.06 $12.50 Employee + Child(ren) 9 $60.57 $41.21 $19.36 $68.07 $46.32 $21.76 Employee + Family 26 $82.83 $52.34 $30.49 $93.08 $58.82 $34.26 MONTHLY COST $5,026.01 $3,747.53 $1,278.48 $5,648.39 $4,211.84 $1,436.56 ANNUAL COST $60,312.12 $44,970.36 $15,341.76 $67,780.68 $50,542.02 $17,238.66 $ INCREASE N/A N/A N/A $7,468.56 $5,571.66 $1,896.90 INCREASE I N/A N/A N/A 1 12.4% 12.4% 12.4% Total Employer Employee Total Employer Employee Life Rate / $1,000 $0.19 $0.19 $0.00 $0.19 $0.19 $0.00 AD &D Rate / $1,000 $0.030 $0.030 $0.00 $0.030 $0.030 $0.00 Total Life and AD &D $0.220 $0.220 $0.00 $0.220 $0.220 $0.00 Life Volume $1,300,500.00 $1,300,500.00 $0.00 $1,300,500.00 $1,300,500.00 $0.00 MONTHLY PREMIUM $286.11 $286.11 $0.00 $286.11 $286.11 $0.00 ANNUALPREMIUM $3,433.32 $3,433.32 $0.00 $3,433.32 $3,433.32 $0.00 $ INCREASE N/A N/A N/A $0.00 $0.00 $0.00 INCREASE N/A N/A N/A 0.0% 0.0% 0.0% LONG TERM DISABILITY Hartford Hartford Total Employer. Employee Total Employer Employee LTD Rate / $100 $0.370 $0.370 $0.00 $0.370 $0.370 $0.00 LTD Volume $508,049.00 $508,049.00 $0.00 $508,049.00 $508,049.00 $0.00 MONTHLY PREMIUM $1,879.78 $1,879.78 $0.00 $1,879.78 $1,879.78 $0.00 ANNUAL PREMIUM $22,557.38 $22,557.38 $0.00 $22,557.38 $22,557.38 $0.00 $ INCREASE N/A N/A N/A $0.00 $0.00 $0.00 INCREASE N/A N/A N/A 0.0% 0.0% 0.0% Total Employer Employee Total Employer Employee Employee 50 $4.24 $4.24 $0.00 $4.24 $4.24 $0.00 Family 63 $12.69 $8.47 $4.23 $12.69 $8.47 $4.23 MONTHLY PREMIUM $1,011.47 $745.30 $266.18 $1,011.47 $745.30 $266.18 ANNUAL PREMIUM $12,137.64 $8,943.54 $3,194.10 $12,137.64 $8,943.54 $3,194.10 $ INCREASE N/A N/A N/A $0.00 $0.00 $0.00 INCREASE N/A N/A N/A 0.0% 0.0% 0.0% SUMMARY TOTAL ANNUAL PREMIUM Total $1,118,524.70 Employer $927,867.86 Employee $190,656.84 Total $1,163,699.78 Employer $963,352.34 Employee $200,347.44 $ INCREASE N/A N/A N/A $45,175.08 $35,484.48 $9,690.60 INCREASE N/A N/A N/A 4.0% 5.1%