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Home My WebLink AboutAGENDA REPORT 1996 0619 CC SPC ITEM 03ACity of Moorpark Agenda Report TO: The Honorable City Council FROM: Richard Hare, Deputy City Manager' DATE: June 18, 1996 (CC Mtg. 6/19/96) SUBJECT: Consider Employee Health Insurance Plan and Long Term Disability Insurance ITEM •� « �� i. /J�il��♦ The current health insurance carrier for the City is United Insurance of America. The policy period will end on June 30, 1996. United Insurance of America is dropping the small group market, has increased the City's premium 59 percent and is only offering a six month rate guarantee. Staff has therefore, with the assistance of the City's commercial insurance broker Tolman & Wiker, requested proposals from several insurance carriers, the Southern California Joint Powers Insurance Authority (SCJPIA) and the Public Employees Retirement System (CALPERS). The carriers were asked to match the current benefit plan provided by United Insurance as closely as possible. Proposals were initially received by Tolman & Wiker and were then reviewed with staff. After reviewing a total of ten insurance proposals, Principal Mutual Life Insurance provided the only proposal which matched or exceeded the benefits of United Insurance. Attachment A compares the Principal Plan and the current United Plan. Although the non - preferred provider cost to the employee is increased from twenty percent to thirty percent, the deductible is decreased from $500 to $250 and the maximum annual out of pocket is decreased from $2,000 to $1,000. Additionally, the lifetime maximum benefit is increased from $2,000,000 to $5,000,000. Principal Mutual also has an expanded health care preferred provider agreement. Ventura Foundation for Medical Care is the largest health care Preferred Provider Organization (PPO) in Ventura County and was used by United Insurance as the City's PPO. Principal also uses the Ventura Foundation and allows the selection by the employees of a second area PPO which will cover Los Angeles County and other area counties. If the City Council authorizes the change to Principal Mutual Life Insurance, it will be effective as of July 1, 1996. The employee premium is based on a tier system depending on the employees age, with a total monthly premium of $13,345.37 per month for existing staff. Our current medical premium with United Insurance is a two tier system, employee and family. Our current monthly premium is $13,352.37. The premiums are not significantly different at the preferred rates and the benefits are comparable. A standard rate quote would increase the City's monthly cost $3,000. This would be a 23 percent increase. We will not know the actual rate until the individual employee enrollments are completed and the group underwriting is done by the company. If the company notes significant chronic and costly conditions existing in this group then they will assign the standard rate. Individual health histories are confidential, therefore it is not known with certainty what the outcome of the underwriting will be, but based on our previous claims loss history it is not anticipated that we would receive a standard rating. Pursuant to Section 701 of the Memorandum of Agreement, an insurance briefing is scheduled to review the proposed medical plan with all full -time staff prior to implementation. LONG TERM DISABILITY The City's long term disability insurance is held with Standard Disability. As with the medical insurance, Standard Insurance Company has also raised their rates significantly. Tolman and Wiker provided proposals from AIG, The Guardian, Paul Revere and Reliance Standard. Staff reviewed the proposals with the intent to match or exceed the benefits provided by our current company. Standard Reliance was able to match the coverage and also offer a child care benefit. The child care benefit allows for child care expenses to be paid up to a maximum of $250 per month, in the event the employee is placed on long term disability. A chart illustrating the coverage is attached. Our current rate is .49 per 100 per month for a total of $659.75. The lowest quote, Standard Reliance, is slightly higher at .56 per 100 per month, a total of $729.69. This is a 14 percent increase estimated to be an additional $839.00 per year. The policy rate for Reliance Standard is guaranteed for three years. Staff recommends transferring health insurance coverage to Principal Mutual Life Insurance Company and long term disability insurance to Reliance Standard and direct the City Manager to implement the agreement for both coverages effective July 1, 1996. Attachment: "A" Health Insurance Coverage Comparison Chart "B" Reliance Standard LTD Chart ATTACHMENT "A" INSURANCE COMPARISON CHART C:\WPDOCS\CC.REP\INS.CHA PRINCIPAL MUTUAL UNITED INSURANCE OF AMERICA DED. 250.00 500.00 CO -PAY 90/70 90/80 OUT OF 1000/2000 1000/2000 POCKET MAX. OFFICE 10.00 / 20.00 10.00 CO -PAY PPO NORTHERN CALIF. FOUNDATION VENTURA Co. FOUNDATION Max. $5,000,000 $2,000,000 Lifetime Limit PRESCRIP. 5.00 GENERIC 5.00 GENERIC DRUGS 5.00 PLUS 25% BRAND 10.00 BRAND EMPLOYEE 25,000 15,000 LIFE DEPENDENT SPOUSE BENEFIT 5,000 NONE LIFE CHILD BENEFIT 2,000 (6 MONTHS - 19 YRS.) C:\WPDOCS\CC.REP\INS.CHA i ATTACHMENT "B" Case Name: CITY OF MOORPARK Broker: TOLMAN & WIKER Group Representative: ERIC KIEHNLE Number of Employees: 38 Expiration Date: SEPTEMBER 8, 1996 Effective Date: AUGUST 1, 1996 Eligibility:All full -time active employees working 30 hours or more a week, except any person working on a temporary or seasonal basis. Basic Proposal Data : Benefit Percentage: 66 2 %3% Monthly Maximum: $6,000 Elimination Period: 90 Days Benefit Duration: EXT ADEA -B Social Security Integration: Full Family Survivor Benefit: 3 months Mental & Nervous Coverage: 2 Years then Hospital confined Drug & Alcohol Coverage: 2 Years Pre - Existing Limitation: 3 12 (No Loss No Gain provided in Takeover) Own Occupation Coverage: 24 months Partial Disability Yes Residual Disability: Yes Work Incentive Benefit: Yes Child Care Benefit: 12 months Maternity Coverage: Same as any other Disability Minimum Benefit. $100.00 per month. Rate Guarantee: 3 Years Insurable Monthly Payroll: Monthly Premium: $130,301.00 Rate per $100 Payroll $729.69 .56 Additional options available from your RSL Group Sales Representative.