ITEM TITLE:
Annual Renewal of City/School Health Insurance Benefit Plan for Period Beginning 4/1/2021
SUBMITTED BY: Rhea E Cragun, Human Resource Director
FISCAL NOTES:
Expenditure Required: $2.73MM (City, April-December, 2021)
Unencumbered Balance: $2.53MM
Funding Source: Cost code 41300, pro-rated among all staffed departments
RECOMMENDATION:
Approve
SUMMARY STATEMENT:
• This agenda item formalizes the annual renewal of the health insurance benefit plan.
• The School has separately reviewed and approved their plan renewal specifications.
• Renewal Premium Change:
o City: +0.1%; total monthly $2347.71 to $2350.61; $2.90 increase
§ Employer monthly: $2234.83 to $2237.61; $2.78 increase
§ Employee monthly: $93.12 to $93.24; $0.12 increase
o School: -0.1%
• Plan Changes: None
o Staff will provide Council with a follow-up plan review in the fall, emphasizing fund balance as a measure of plan solvency, and recommending changes in conjunction with Broker, ERT and Stakeholder
• Notes regarding 2021 Budget
o In preparing this agenda item, Finance staff discovered an error in the citywide budgeted health-care costs.
o The error results in a $196K budget shortfall for calendar 2021, based on full employment and now-known insurance renewal rates.
o If citywide employment vacancy rates are within historic ranges (4% - 8%), then no further budget revisions will be necessary to correct this error.
o The error resulted from mistakenly using the prior year’s (2019) health insurance premiums, rather than the known 2020 premiums, which reflected an 8% increase.
o Staff has discussed this budgeting error and its causes, and has taken steps to ensure it will not be repeated in future budgets.