For City-Wide Distribution: New Insurance

Authorized for distribution by the City Manager's Office.

TO: All Employees (Supervisors: Please print for those employees without email.) Last December, the City Council expressed concern over the growing cost of health insurance and asked staff to involve employees in the selection process for new insurance. Seventeen (17) employees were selected to the Insurance Review Committee: Dennis Arhelger (Parks), Michael Dane (Finance), Harold Dominguez (City Manager), Brian Dunn (Fire), Jeff Fant (Police), James Flores (Code Compliance), Armendina Garcia (HR), Margaret Howard (Finance), Tom Kerr (Water Utilities), Toni Kirkham (Water Utilities), Ty Meighan (PIO), Veronica Sanchez (HR), Joy Shelton (Permits), Carl White (Parks/Recreation), Will Wilde (Water Utilities), Anthony Wilson (Civic Events) and Steve Wilson (Police). Four (4) retirees were also on the Committee: Stephen Brown, David Hermes, Curtis Milbourn and Teresa Special. The Committee worked closely with Holmes Murphy Consulting to develop a request for proposals that would attract bids that would reduce premiums without reducing coverage. The bids closed on August 19. The City is seeking new benefits for: health, dental, vision, basic life/AD&D, voluntary life/AD&D, post-65 retiree health and flexible spending accounts. Several health options were received during the bid process. Primarily there are four health plans that warrant consideration: one is a full choice option (our current plan), one option allows choice, but a decision on which network to use (Shannon or Community) must be made at enrollment time, and two options are exclusive provider options (one exclusively with Shannon and one exclusively with Community). Of these four choices: one lowers premiums, one stays flat, and two are premium increases. Recently a survey was sent out to employees on this subject. The results of the survey so far are:

1. If you could get premiums lower than todays cost but you were limited to an exclusive provider
network with the same or better coverage as today would you want that? YES = 227; NO = 79.

2. What is your primary consideration on health insurance? Select only one. Low cost = 210;
Freedom to seek treatment from wherever you want = 92.

3. If your doctor is not covered by the exclusive provider network, you would: Change your doctor to
someone within the exclusive provider network = 197; Continue to see your doctor understanding you might pay more for treatment = 105. Next Tuesday, November 1, the City Council will make a decision on which providers to select for benefit coverage starting in 2012. This is the first item on the regular agenda and should start around 9:15 AM. Employees are welcome to attend the Council Meeting but should schedule vacation for the time away from work. Once the provider selections have been made, the specific dates for open enrollment will be announced. Open enrollment will be conducted during the month of November. If you have any questions, feel free to contact Human Resources or any of the Insurance Committee members listed above. Thank you.