TITLE
Consider a memorandum/resolution recommending to the Employee Benefit Trust the renewal rates for agreements with the Scott and White Health Plan (SWHP) for medical insurance and with MetLife for dental insurance, effective October 1, 2015.
SUMMARY
AGENDA ITEM
Group Employee Medical and Dental Insurance Benefits
ORIGINATING DEPARTMENT
Human Resources
BACKGROUND INFORMATION
The City of Killeen provides medical and dental insurance for each employee so that each has access to health care. The City currently pays 100% of the medical and dental care premiums, base plan, for all eligible employees. Employees may purchase additional medical and dental care coverage for their family members, if they choose. The current carriers are the Scott and White Health Plan (SWHP) and MetLife, respectively.
DISCUSSION/CONCLUSION
Medical insurance benefits are reviewed annually. The original proposed renewal for the SWHP FY16 rate was +15.50% of the FY15 rate, negotiated down to +7.75% by our benefits consultant. This increases the employee-only premium from $357.35 per month to $385.05 per month. The proposed renewal rate for medical insurance benefits provides competitive pricing for employee medical insurance and adds access to chiropractic care to the plan design.
Dental insurance benefits are also reviewed annually. The proposed renewal for MetLife FY16 rate, +7% of the FY 15 rate, was also negotiated by our benefits consultant. This increases the employee-only premium from $21.98 per month to $23.52 per month. The renewal rate for dental insurance benefits also provides competitive pricing for the employee dental insurance and includes no changes to the plan design.
The Employee Insurance Committee has reviewed these proposed renewals at meetings held on June 25 and August 10, 2015. They join the Human Resources staff, the City’s Well-Being Committee in recommending that the agreement for employee medical insurance be renewed with Scott and White at a rate of +7.75% and that the agreement for employee dental insurance be renewed with MetLife at a rate of +7.0%.
FISCAL IMPACT
The medical insurance plan proposed reflects a 7.75% increase in premiums to the City. Based on the average of 880 full-time employees per month who are eligible to participate in medical insurance, the annual fiscal impact of this recommendation is an estimated increase in cost of $292,406.40 for FY16. The new rates would be effective October 1, 2015.
|
Medical Insurance |
Current FY 14-15 |
Proposed FY 15-16 |
Increased Cost Per Employee Per Month |
|
City Cost Per Month |
$314,468.00 |
$338,835.20 |
$27.69 |
The dental insurance plan proposed reflects a 7% increase in premiums to the City. Based on the average of 1,094 employees per month who are eligible to participate in dental insurance, the annual fiscal impact of this recommendation is an estimated increase in cost of $20,217.12 for FY16. The new rates would be effective October 1, 2015.
|
Dental Insurance |
Current FY 14-15 |
Proposed FY 15-16 |
Increased Cost Per Employee Per Month |
|
City Cost Per Month |
$24,046.12 |
$25,730.88 |
$1.54 |
Costs for both have been incorporated into the City’s FY16 proposed budget, delivered to the City Council earlier in June.
RECOMMENDATION
It is recommended that City Council recommend the renewal of Scott and White Health Plan as the provider for employee medical insurance to the Employee Benefit Trust and authorize the City Manager to execute an agreement with Scott and White Health Plan for medical insurance effective October 1, 2015, and that the City Manager be authorized to execute any necessary change order in accordance with state and local law.
It is recommended that City Council recommend the renewal of MetLife as the provider for employee dental insurance to the Employee Benefit Trust and authorize the City Manager to execute an agreement with MetLife for dental insurance effective October 1, 2015, and that the City Manager be authorized to execute any necessary change order in accordance with state and local law.