Item 3.811111
OtkgoF
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Finance
Gary Groen, Finance Director
November 13, 2012
PRESENTER(s):
REVIEWED BY:
ITEM #:
Consent Agenda
Lori Johnson, City Administrator
3.8
AGENDA ITEM DETAILS
RECOMMENDATION:
I recommend the City Council approve the employee health, life, short-term and long-term disability
insurance contracts effective January 1, 2013.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
Yes, one year contract with HealthPartners
No
Yes, three year contract with Assurant
The City's health, life, and disability policies renew on December 31. Renewal rates for health insurance
with HealthPartners are very favorable. On the other hand, the renewal rates for disability insurance
with Standard were proposed to triple. For that reason, quotes were requested for the life and disability
insurance contracts and a new provider, Assurant, is recommended.
Health Insurance — The City currently provides health insurance for the City's employees through
HealthPartners. The health insurance program is a high deductible H.S. A. with a $3,000/$6,000
deductible. The health insurance premium renewal rates for 2013 represent a .84% increase over the
2012 rates. Attached is the 2013 HealthPartners rate information for your review. The total health
insurance program cost was estimated at $91,200 in the preliminary 2013 budget presented in
September. Based on the HealthPartners quote received, the actual annual cost will be approximately
$550 less than the budget estimate.
Life, Short-term disability and Long-term disability Insurance — The City provides life, short-term and
long-term disability insurance for the City's employees. The Assurant employer premium is $564.42 per
month and is approximately $600 less than the total amount included in the 2013 preliminary budget
presented in September. The rates quoted are based on a three year contract with a three year lock on
the life and long term disability premiums and a two year lock on short term disability premiums. The
Assurant premium rates are similar to the existing rates.
The action requested is to approve the contracts as noted above. The City's contribution for 2013 will
be discussed at the budget workshop meeting on Monday, November 26.
SUPPORTING DOCUMENTS: X ATTACHED -i NONE
List: Medical Insurance and Other Benefit Rate Information
MOTION: (Please word motion as you would like it to appear in the minutes.)
Approve the renewal of the health insurance contract with HealthPartners and the life, short-term and
long-term contracts with Assurant.
BUDGET INFORMATION
FUNDING: BUDGETED: X YES
General, Building Safety, Water & Sewer Funds NO
ACTION TAKEN
❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes)
COMMENTS
M41 -1A
MIR HealthPartnerso
Empower Embedded HSA 3000-100
and Open Access is the pian and
network on which you will
automatically be renewed unless we
hear from you prior to 12/10/2012
Medical Rate Information
Group Name: City of Otsego
Group Number: 23243
Renewal Date: 01/01/2013
Current Plan: Emb HSA 3000-100
Current Network: Open Access
Current Monthly Rate
Effective untll 12131/2012
Emb HSA 3000-100
1241, g�Lf
New Plan: Emb HSA 3000-100
New Network: Open Access - 94%k'
New Monthly Rate
Effective beginning 01/01/2013
Emb HSA 3000.100
Age
0-18
$188.00
$189.60
19-24
$188.00
$189.60
25-29
$188.00
$189.60
30-34
$201.60
$203.30
35-39
$201.60
$203.30
40-44
$205.10
$206.80
45-49
$276.40
$278.70
50-54
$347.90
$350.80
55-59
$441.90
$445.60
60-64
$545.30
$549.90
65+
$562.60
$567.30
65+ Medicare
$279.50
$281.80
1 Child
$155.10
$156.40
2 Children
$310.20
$312.80
3 Children
$465,30
$469.20
If you wish to change your Network, indicate your selection on the Alternative Plan Optlons page and return to Health Partners,
Underwriting Requirements and Provisions:
■ HealthPartners charges premiums for up to three children, regardless of family size.
■ Premiums for adults aging into a new age bracket will be adjusted the first of the month following their birth date.
■ The Medicare rate category applies to individuals age 65 or older having both Medicare Part A and B in a group having
19 or fewer employees.
■ 75% participation after eligible waivers.
■ Employer will contribute a minimum of 50% of the single premium.
■ Please note: Out-of-state employees may be moved to the HealthPartners NationalONESM plan that most closely
matches the current plan upon renewal. Please contact your broker or your HealthPartners Account Executive for
additional options.
Area:2 Table: 0.860 Area:2 Table: 0.840
W. 33rd Avenue South le Bloomington, MN 55425 ■ healthpartners.com N 952-883-5200
CompareRatelnfoMed Revised 01/01/2012 Prepared: October - 2012
R-00009065
Assurant Employee Benefits
Southdale Office Centre, 6600 France Avenue South, Suite 314
Minneapolis, MN 55435
T 952.920.8990 800.328.0153 F 952.920.8218
LIFE
Group Name: City of Otsego
Presented By: Financial Concepts Twin Cities
This proposal is good for a future effective date through 0310112013.
Wilm I MEN
Life Life AD&D AD&D
Description Amount Maximum Amount Maximum
All eligible employees $10,000 $10,000 $10,000 $10,000
Guarantee Issue The lesser of $10,000 and the current life carrier Guarantee Issue amount
Spouse Amount $5,000
Child Amount $500 15 days but less than 6 months
$5,000 6 months but less than 19 years (25 years if a full-time student)
MONTHLY RATES
RATE PER $1,000
VOLUME
MONTHLY
PREMIUM
NUMBEROF
EMPLOYEES
LIFE
0.17
170,000
$28.90
17
AD&D
0.04
170,000
$6.80
17
DEPENDENT LIFE
1.78 per
employee
2 employees
with dependents
$3.56
TOTAL
$39.26
Rates are guaranteed for 36 months.
Contributions Employer 100%
Employee 0%
Participation Requirement 100% minimum participation required
Rounding Multiples of earnings are rounded to the next higher $1,000, if not already an
exact multiple of $1,000.
Age Reductions At age 65, reduce by 33% of the original schedule amount; at age 70, reduce by
33% of the in force amount.
Assurant Employee Benefits Is the brand name used for insurance products underwritten and Issued by Union
Security Insurance Company.
City of Otsego 10/05/2012 09:26:06 2742413/1
Assurant Employee Benefits
Southdale Office Centre, 6600 France Avenue South, Suite 314
Minneapolis, MN 65435
T 962.920.8990 800.328.0153 F 952.920.8218
SHORT-TERM DISABILITYILINK
Group Name: City of Otsego
Presented By: Financial Concepts Twin Cities
This proposal is good for a future effective date through 0310112013.
NON -OCCUPATIONAL COVERAGE
Description
Weekly Benefit
Maximum
Minimum
Date Benefits Begin
Accident
Sickness
Benefit Duration
Benefit Integration
Rate Guarantee
All eligible employees
60% of covered earnings
$500
$25
1 st day
8th day
13 weeks
Full Family Direct
24 months
RATE (PER $10 OF WEEKLY BENEFIT)
COVERED WEEKLY BENEFIT
MONTHLY PREMIUM
ELIGIBLE EMPLOYEES
0.29
7,447
$215.96
17
Contributions 100% employer; 0% employee
Participation Requirement 100% minimum participation required
Quality of Care Benefit Not selected
Rehabilitation Benefit Included
Survivor Benefit No
Dual Definition of Disability Allows Insured participants to qualify for benefits under an own occupation or an
earnings test; includes zero day residual, unlimited partial disability and a 100%
Return -to -Work Incentive
Assurant Employee Benefits Is the brand name used for insurance products underwritten and issued by Union
Security Insurance Company.
City of Otsego 10/0512012 09:26:37 2742413/1
Assurant Employee Benefits
Southdale Office Centre, 6600 France Avenue South, Suite 314
Minneapolis, MN 55435
T952.920.8990 800.328.0153 F 952.920.821 B
LONG-TERM DISABILITY
Group Name: City of Otsego
Presented By: Financial Concepts Twin Cities
This proposal is good for a future effective date through 0310112013.
Description
All eligible employees
Monthly Benefit
60% of covered monthly pay
Maximum
$5,000
Minimum
$100
Elimination Period
90 days; Zero day residual
Maximum Benefit Duration
For disabilities occurring before age 60, Social Security Normal Retirement Age
(SS NRA)
Dual Definition of Disability
Unlimited partial disability
Own Occupation Test
24 months, excluding the Elimination Period; then any occupation
OR Earnings Test
80%; indexed at 7.5%
Benefit integration
Full Family Direct
Pre -Existing Condltlon
At Issue
616/24 with transfer
New Entrants
6/6/24
Rate Guarantee
36 months
RATE (PER $100 OF MONTHLY PAYROLL)
COVERED MONTHLY PAYROLL
MONTHLY PREMIUM
ELIGIBLE EMPLOYEES
0.43
71,906
$309.20
17
Assurant Employee Benefits is the brand name used for insurance products underwritten and issued by Union
Security Insurance Company.
City of Otsego 9910/0512012 09:29:17 2742413/1