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HomeMy WebLinkAboutAGENDA REPORT 1990 0620 CC REG ITEM 08HMOORPARK ITEM . BERNARDO M. PEREZ STEVEN KUENY Mayor % =RPARK, CALIFORNIA o P 92 City Manager SCOTT MONTGOMERY City Council Meeting f CHERYL J. KANE Mayor Pro Tern of 199Q o City Attorney ELOISE BROWN 2 PATRICK RICHARDS, A.I.C.P. Councilmember ACTION: v ;� Director of CLINT HARPER, Ph.D. o j" Community Development Councilmember "'E _ �`� R. DENNIS DELZEIT PAUL W. LAWRASON, Jr. City Engineer Councilmember BY JOHN V. GILLESPIE LILLIAN KELLERMAN Chief of Police City Clerk RICHARD T. HARE TO: HONORABLE CITY COUNCIL City Treasurer FROM: RICHARD HARE, DEPUTY CITY MAN E i DATE: JUNE 15, 1990 SUBJECT: EMPLOYEE AND DEPENDENT HEALTH INSURANCE COVERAGE BACKGROUND: The City of Moorpark currently provides employee and dependent health coverage through Western Life Insurance Co. Western Life was originally selected as the City's carrier effective May 1, 1989 just prior to the announcement of the bankruptcy of First Far West, our former carrier. Over the last year employees have indicated general satisfaction with Western Life's claims processing and services. There have been only three significant complaints with regard to their service. The original renewal with Western Life was scheduled for May 1st, however, there was not adequate time to meet with employees to compare other plans and options, so an extension of coverage was negotiated with Western Life Insurance at last year's rates. Western Life provided a new quotation with an effective policy period of six months from July 1, 1990 to December 31, 1990. The new quotation is a significant increase over last year's rate. There is also an associated rate increase of 13% on a $5,000 term life insurance policy on each employee. The preferred provider listing is expanded, however, all other elements of the plan remain the same and there is no related increase in benefits. Currently, the City pays the entire employee and dependent premium. Additionally, the City pays one half of the dependent premium directly to employees who are eligible to receive dependent coverage but opt not to cover their dependents. In the City's MOU with PEAVC it was agreed that the City would continue this benefit for dependent coverage up to a 20% increase or $150 on the dependent premium repayment rate alternative. 799 Moorpark Avenue Moorpark, California 93021 (805) 529 -6864 r The new Western Life plan six month rate is $172.81 for employee only coverage up from $143.78 which is a 20% increase. With dependent coverage the rate is $436.54. This combined rate is a 17% increase. The increasing costs of health care are pushing the limits established for this benefit. Under the renewal rate structure the increase in dependent coverage is at 15 %. In the event the renewal rates in December increase another $11.43 for dependent coverage employees would be responsible for any the additional costs above that amount. Meetings were held with employees to discuss the increasing rates and the benefit options. In order to receive some relief in rates it would be necessary to join the Southern California Joint Powers Insurance Authority plan which has significantly lower rates, but a higher deductible and a limited preferred provider listing or the benefits would have to be decreased to obtain a lower rate from Western Life or another private carrier. The rates offered by the Authority under a pooled loss program includes the choice between the optional use of preferred providers and a deductible of $200 and a plan with a mandatory use of preferred providers with no deductible. The rates under the Authority plan are $145.97 for employee coverage and $417.44 for family coverage. The employee rate is 15% less and the family rate is 4% less than the Western Life rates. The staff has been working with the Insurance Authority and with our private carrier broker, Tolman & Wiker, to develop options which will control our costs for health insurance coverage. All of the options presented thus far are dependent upon restructuring the plan benefits RECOMMENDATION• Authorize the City Manager to renew employee and dependent health insurance coverage with Western Life Insurance Company maintaining the current level of benefits and consistent with the Memorandum of Understanding between the City of Moorpark and PEAVC. Further, direct staff to investigate alternative benefit plans and providers for consideration prior to December 31, 1990.