ITEM TITLE:
Approval of Renewal of Employee Health Care Plan and Insurance Broker Contract for Twelve Months Beginning April 1, 2017
SUBMITTED BY: Brian Carlson, Finance Director
FISCAL NOTES:
Expenditure Required: N/A
Unencumbered Balance: N/A.
Funding Source: N/A
RECOMMENDATION:
Approve the status-quo annual plan renewal and broker contract for twelve months beginning April 1, 2017
SUMMARY STATEMENT:
The 2017-2018 plan renewal includes a 4.38% increase in total expected cost, which is the basis of the City’s payroll deductions and monthly premiums. The bulk of this increase (65%) is driven by increased prescription drug costs and utilization. The rest of the increase is split evenly between stop-loss premiums, dental coverage, and plan administration.
The Broker’s fee is unchanged from 2016-2017, and is articulated in a separate attached contract.
The 2017 City Budget assumed a 7.5% annual increase, which is effectively a 10% increase when pro-rated for a partial year, as the plan renews in April. Staff anticipates a $115k surplus carry-forward in calendar 2018 resulting from this discrepancy.
The Valdez City Schools renewal includes a 1.14% increase, driven primarily and evenly by increases to dental coverage and stop-loss premiums.
Craig Kestran will join the meeting by telephone to answer council questions.