HomeMy WebLinkAboutItem 8.7 Establish Employee Health Care Benefits (2) CITY OF DUBLIN L�
AGENDA STATEMENT 1 "
CITY COUNCIL MEETING DATE: March 26 , 1984
SUBJECT Establishment of Employee Health Care Benefits
EXHIBITS ATTACHED Resolution Electing to be Subject to Public Employee ' s
Medical and Hospital Care Act and Fixing the
`1 Employer ' s Contribution
COMMENDATrON Adopt Resolution
FINANCIAL STATEMENT: Adequate funds for these benefits are included in the
current budget . Maximum annual cost to the City
approximately $19 , 775 .
DESCRIPTION Background
Staff has evaluated various opportunities to participate in Health Insurance
Programs . The most effective method of providing health care benefits to
City employees is through the Public Employee ' s Hospital and Medical Care
Act .
In establishing a health insurance package insurers look at the size and
composition of the group to be insured. Given the small size of the city
staff it is difficult to establish a comprehensive program at a competive
rate. Therefore, staff recommends participating in the program coordinated
by the California Public Employees Retirement System (PERS ) . This provides
options to the employee which would otherwise be difficult to provide
directly to a small group. The arrangement allows employees to have the
option of selecting traditional indemnity coverage or a helth maintenance
organization (HMO) , such as Kaiser .
Requirements
The legislation creating this program contains specific stipulations, which
the City must follow. Included in the requirements are the following :
a . All active and retired employees who are members of P. E.R.S. must
given an opportunity to enroll in the qualified plan of their choice .
b. The agency must contribute at least $16 . 00 per month toward the cost
of both the active and the retired employee ' s premium.
C. Agencies are required to contribute equally for retired and active
employees .
d . The City would contribute 3 percent of the total gross monthly
premium of employees (active and retired) to the Employee Contingency
Reserve Fend. This is used to reduce premiums , improve benefits or
offset premium increases . The primary use is to offset the costs of
retired .employees enrolled in the basic plans . The legislation
creating this fund provides for it to be variable, but is shall not
exceed 4 percent of the total monthly premium.
e. The agency must pay . 5 percent of the total gross monthly premium to
cover the administrative costs associated with the program.
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COPIES TO:
ITEM N0.
AGENDA STATEMENT : Establishment of Employee Health Care Benefits
Page 2
COSTS
Currently P . E .R. S . offers three indemnity plans and four HMO plans in this
area . The cost of insurance is shown below.
PERS HEALTH PLANS
INDEMNITY EMPLOYEE EMPLOYEE + 1 FAMILY
First Farwest $ 80 . 00 $ 158 .00 $ 204 . 00
.Cal Western/Occidental 85 . 19 178 . 00 215 .97
Blue Cross/Blue Shield 100 . 26 198 . 26 236 . 79
H M 0 EMPLOYEE EMPLOYEE + 1 FAMILY
Kaiser $ 55 . 29 $ 110 .58 $ 160 . 15
Health Plan America 80 . 60 161 .00 215 . 00
Take Care 81 . 00 160 .80 214 . 00
Foundation 85 . 00 174 .50 .222 .50
* Rates to change 7/1/84
The issue of cost containment in the provision of health benefits is an
important consideration. The P . E.R. S . Health Benefits Division has advised _
the City that a comprehensive report has been submitted to the P . E.R. S .
Board. The Board has indicated an interest in containing costs and the
report indentifies key areas where this may be accomplished. One
consideration is to offer a single indemnity plan. The report also
identifies the fact that P . E .R. S . is a large group which should provide
leverage in the insurance market . P . E.R. S. health plans now cover over
500 , 000 individuals . The options afforded by being a member of a large group
are significant to small agencies such as Dublin.
The proposed resolution establishes a maximum City contribution of' $199 per
month . If an employee selected a plan with a higher premium, the difference
would be paid by the employee through payroll deductions . It is anticipated
that P . E.R.S . will receive a rate increase July 1, 1984 . At such time,
Staff will evaluate the extent of the increase and may recommend an
adjustment of the City contribution.
It has been recognized that by participating in the plan the City becomes
obligated to pay health insurance costs for employees who retire. The City
must contribute at the same level as it provides to active employees . The
City could terminate its obligation if at a future date the council chose to
withdraw from the P . E .R. S . health plan . However , at the present this plan
offers the most effective method of providing benefits. Staff will continue
to monitor the provision: •:f health care benefits to assure that they are
provided in a cost effective manner .
Recommendation
The following action is required to enroll the City in the P.E.R.S. Health
Insurance Program. P . E.R.S . must receive the resolutions by April 10th for
the coverage to be effective on May 1 , 1984 . It is recommended that the City
Council adopt the "Resolution Electng To Be Subject to Public Employees '
Medical and Hospital Care Act and fixing The Employers Contribution. "
RESOLUTION NO. - 84
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
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ELECTING TO BE SUBJECT TO
PUBLIC EMPLOYEES ' MEDICAL AND HOSPITAL CARE ACT
AND
FIXING THE EMPLOYERS' CONTRIBUTION
WHEREAS, Government Code Section 22850 provides the
benefits of the Public Employees ' Medical and Hospital Care Act to
employees of local agencies contracting with the Public Employees '
Retirement System on proper application by a local agency; and
WHEREAS, Section 22852 . 6 of the Act provides that a
local contracting agency shall fix the amount of the employer ' s
contribution; and
WHEREAS, the City of Dublin, hereinafter referred to as
Public Agency, is a local agency contracting with the Public
Employees ' Retirement System; and
WHEREAS, the Public Agency desires to obtain for its
employees and annuitants the benefit of the Act and to accept the
liabilities and. obligations of an employer under the Act and
Regulations;
NOW THEREFORE, BE IT RESOLVED that
(a ) the Public Agency elects, to be subject to the
provisions of the Act ;
(b) the employer ' s contribution for each employee or
annuitant shall be the amount necessary to pay the full cost of
his enrollment, including the enrollment of his family members, in
a health benefits plan or plans up to a maximum of $199 .00 per
month plus administrative fees and Contingency Reserve Fund
assessments;
( c) the City Council does hereby appoint and direct,
. .Richard Ambrose, City Manager to file with the Board of
Administration of the Public Employees ' Retirement System a
verified copy of this Resolution, and to perform on behalf: of.-said
Public -.Agency -all functions required of it under the Act and
Regulations of the Board of Administration; :
(d) coverage` under : the Act to be .effective on
May 1 , 1984 . -
PASSED, APPROVED AND ADOPTED this - 26th ..day of -March, 1984 . . - ,
AYES:
NOES:
ABSENT:
Mayor
ATTEST:
City Clerk