CityOfSanAntonioLaborProposaltoSAPOA

February20,2015

OnFebruary20,2015theCityofSanAntonioofferedtothePoliceUnionafouryearlaborproposal:
Pay increases resulting in $40,910,065 additional wage costs for the City which provide each
officerwithwageincreasestotaling9.5%.
a. 2%lumpsumpaymentbasedonannualtotalcompensationincludingbasepay,longevity,
supplementalpayandovertimepayableinFY2015followingratificationoftheagreement
b. 2%wageincreaseeffectiveOctober1,2015
c. 2.5%wageincreaseeffectiveOctober1,2016
d. 3%wageincreaseeffectiveOctober1,2017

Officerssharingthecostofhealthcare
Employee only coverage available with no premium cost to employees; dependent coverage is
subsidized by the City with employees paying premiums for dependent coverage. Healthcare
changeswillbeeffectiveJanuary1,2016.TheestimatedhealthcarecosttotheCity,ascertified
byArthurJ.GallagherandbasedonFY2014healthcarecost,is$11,300peremployeeperyear.
TheLegacyPlanisavailableforonlyFY2016withpremiumsforemployeesanddependents.

PhasingoutofCityfundingfortheLegalDefenseFundoverthreeyears;continuationoftuition
reimbursementwithcapsandjobrelatedcriteria;elimination/revisionoftheevergreenclause;
eliminationofpatrolcarmileagelimitation;andcertainotherlanguagechanges.

TotalContractCostofPoliceContract
The total cost of the contract (wages, specialty pays, overtime, benefits, and patrol vehicles) in
theFY2015GeneralFundAdoptedBudgetis$316.8million
ThetablebelowshowstheprojectedcostofthecontracttotheGeneralFundreflectingtheCitys
February20LaborProposal

AnnualAmount
FiscalYear
($inMillions)1
FY2015
$321.9
FY2016
$329.9
FY2017
$338.3
FY2018
$350.9
1) ContractcostreflectsCitysFebruary20laborproposal;healthcareinflationof10%throughFY2016and8%for
FY2017andFY2018;fullyfundingallauthorizeduniformpositions;andanystepincreasesandlongevity
increasesestimatedasauthorizedunderthecurrentCBAwhichdonotresultfromtheFebruary20CityProposal

AsdirectedbytheCityCouncil,theCitysproposalkeepspublicsafetyexpensesatnomorethan66%of
theGeneralFundforthetermoftheagreement.

PreparedbyJeffreyLonda,Ogletree,Deakins,Nash,
Smoak&Stewart,P.C.&CityofSanAntonioOMB

Page1of1

February23,2015

City of San Antonio

Details of City February 20 Health Benefits Proposal to SAPOA

Effective January 1, 2016, the City of San Antonio offers Police uniformed employees a choice of three Healthcare Benefit Plans with
employeepremiumsdescribedonpage2.

TheCitysproposalprovidesthedefinedhealthcarebenefitsdescribedonpage2.Thesebenefitsareofferedtoemployeesatthepremium
costsstatedonpage2.Thepremiumcostsstatedonpage2willapplyduringcalendaryear2016andwill,alongwithbenefits,besubjectto
adjustmentduringsubsequentyears.SeeFutureChangesbelow.

FY 2016:
3Plans:Legacy,ValueandCDHP.
ValueandCDHP:Employeeonlycoveragehasnopremiumcosttoemployees;dependentcoverageissubsidizedbytheCitywith
employeespayingpremiumsfordependentcoverage.
LegacyPlanavailableforonlyFY2016withpremiumsforemployeesanddependents.
EstimatedhealthcarecosttotheCity,ascertifiedbyArthurJ.GallagherandbasedonimplementationforFY2014,was$11,300per
employeeforthatfiscalyear.
Healthcarecostsareestimatedtoincrease10%annuallyforeachofthefiscalyears2015and2016,resultinginanestimated
healthcarecosttotheCityofapproximately$13,600peremployeeforthehealthcareplanoptionseffectiveJanuary1,2016.

FY 2017 & FY 2018:

2Plans:ValueandCDHP.
ValueandCDHP:Employeeonlycoveragewithnopremiumcosttoemployees;dependentcoverageissubsidizedbytheCitywith
employeespayingpremiumsfordependentcoverage.
Healthcarecostsareestimatedtoincrease8%annuallyforeachofthefiscalyears2017and2018.

Future Changes to Healthcare (Benefits and/or Employee Contributions)

HealthcareBenefitPlansandEmployeeContributionswillbereviewedannuallyaspartoftheCitysBudgetProcess.
CityandSAPOAwilluseanagreeduponactuarialformulatodeterminetotalfundingneededtofundplanbenefits.Anydeficiencyor
excessinfundingwillresultinanadjustmenttothebenefitplansand/oremployeecontributionstomeet100%ofthefunding
requirementsoftheCitysSelfInsuranceFund.
Prepared by City of San Antonio OMB & Gallagher Benefit Services, Inc.
Page 1 of 2
Tuesday, March 10, 2015

City of San Antonio

Details of City February 20 Health Benefits Proposal to SAPOA

AttachmentI

LEGACYPLAN(1)

INNetwork

EmployeePremiums(MonthlyDeduction)
EEOnly

EE&Child(ren)

OutofNetwork

VALUEPLAN
INNetwork

$112.90
$218.70
$296.20
$456.80

EE&Spouse
EE&Family

OutofNetwork

CDHP
INNetwork

OutofNetwork

$0.00
$93.60
$134.60
$228.20
$2,000perEmployee(2)

$0.00
$134.20
$192.90
$327.10

HealthSavingsAccount

PlanDesign
Individual

$250

$500

$500

$1,000

$4,000

$8,000

AnnualDeductible

Family

$500

$1,000

$1,000

$2,000

$8,000

$16,000

CoinsurancePercentage
Max.OutofPocket
(includesdeductiblesandcopays)

Individual
Family

20%
$850
$2,000

40%
$1,700
$4,000

20%
$2,500
$5,000

50%
unlimited
unlimited

0%
$4,000
$8,000

50%
$8,000
$16,000

50%
afterdeductible

0%
afterdeductible

50%
afterdeductible

50%
afterdeductible

0%
afterdeductible
0%AfterDed,
PreventiveDrugs
SubjecttoCo
Pays$10/$25/$40
0%AfterDed,
PreventiveDrugs
SubjecttoCo
Pays$20/$50/$80

50%
afterdeductible

$25PCP$50
SPEC

OfficeVisitCoPay
20%
afterdeductible

EmergencyRoomCoPay

40%
afterdeductible

$50

UrgentCareCenterCoPay
$150OOPper
individual,$300OOP
perfamily(in
SeparateBrand
DrugDeductibleor additiontoOOPlimit
above)
outofpocketcap

$100

RX30dayTier1/
Tier2/Tier3

$0generic/20%
brand/30%non
preferredbrand

20%generic/40%
brand/50%non
preferredbrand

$10/$25/$40

RX90dayTier1/
Tier2/Tier3

$0generic/10%
brand/20%non
preferredbrand

20%generic/40%
brand/50%non
preferredbrand

$20/$50/$80

Pharmacy

Notes:
(1)LegacyPlanofferedonlytoincumbentemployeesandonlyforcalendaryear2016
(2)H.S.AcontributionbyCityof$2,000in2016,and$1,000in2017and2018
Prepared by City of San Antonio OMB & Gallagher Benefit Services, Inc.
Page 2 of 2
Tuesday, March 10, 2015

$250

CityofSanAntonioHealthcareProposaltoSAPOA

LEGACY (1)
Employee

CONSUMERCHOICE (2)

VALUE

MonthlyPremiums

City

Total

City

Employee

Total

City

Employee

Total

EmployeeOnly

$730.0

$112.9

$843.0

$493.4

$0.0

$493.4

$417.9

$0.0

$417.9

EmployeeplusChild

$874.0

$218.7

$1,092.7

$753.9

$134.2

$888.1

$658.6

$93.6

$752.2

EmployeeplusSpouse

$1,184.4

$296.2

$1,480.5

$867.8

$192.9

$1,060.8

$778.4

$134.6

$912.9

EmployeePlusFamily

$1,369.6

$456.8

$1,826.4

$1,128.3

$327.1

$1,455.5

$1,029.1

$228.2

$1,257.3

Note
1)LegacyPlanofferedonlytoincumbentemployeesandonlyforcalendaryear2016
2)HealthSavingsAccount(H.S.A.)contributionbytheCityperemployeeof$2,000in2016,and$1,000in2017and2018

PreparedbyGallagherBenefitServices,Inc.
CompiledbyOMB

Printedon3/11/2015

March 12, 2015

Buddy Morris
Area President
Gallagher Benefit Services, Inc.
601 NW Loop 410, Suite 325
San Antonio, Texas 78216
Re: Certification of City of San Antonios 2016 Total Premium Estimates and Employee
Contribution Amounts
Dear Buddy:
Healthcare Analytics Consulting (HCA), a division of Arthur J. Gallagher, has completed the
Certification of the City of San Antonios 2016 Total Premium Estimates and Employee Contribution
Amounts and determined all values contained in the Summary of Results section of this document to
be reasonable and acceptable based on claim information and benefit design supplied to HCA.
Scope
HCA was asked to develop total premium estimates for 2016 based on updated claims information and
updated member migration assumptions. HCA was asked to review the methodology used to calculate
Employee Contributions and provide a Certification of the City of San Antonios 2016 Total Premium
Estimates and Employee Contribution Amounts.
Methodology
The Apex.HRM (HRM) model provides a complete commercial healthcare plan rating capability,
including the cost impacts of alternative plan design features and premium rate setting for both first
dollar and specific/aggregate stop loss coverage. HRM is considered one of the industrys best in
managing plan design and calculating program costs. The actuarial values for plan designs are based
on HRM and measure the portion of the plan costs expected to be reimbursed by the employer after
member cost share from a normative population.
Data was supplied to HCA that provided detail regarding the clients percentage of claims serviced InNetwork, splits between Medical and Prescription Drug claims, and distribution of claims at specific
levels for their employees. Analysis of this data was performed and the potential impact of variances in
this data and the standard population inhernet in the HRM Model was considered in developing the
cost per employee cost estimates. Updated claims information through December of 2014 was
provided to HCA.
Actuarial judgement was used in considering the opportunity for employee selection in the choice of
benefit plans when more than one plan is offered to a population.

Arthur J. Gallagher & Co.

Healthcare Analytics Consulting
125-310 Village Boulevard, Princeton, NJ 08540
Phone: 609.452.2488 Fax: 609.452.2668
2015 GALLAGHER BENEFIT SERVICES, INC
www.AJG.COM

Summary of Results
2016 Total Premium and Percentage of Employee Contribution
Scenario #1
Total Premium
Employee Contribution
Percentage

Low
$32,509,408
$6,423,188
19.8%

Midpoint
$34,747,980
$6,423,188
18.5%

High
$36,986,553
$6,423,188
17.4%

Scenario #2
Total Premium
Employee Contribution
Percentage

Low
$33,141,929
$6,623,228
20.0%

Midpoint
$35,308,710
$6,623,228
18.8%

High
$37,475,491
$6,623,228
17.7%

Cost to City
Scenario #1
Cost to City with H.S.A
Cost Per Employee

Low
$27,986,220
$11,789

Midpoint
$30,224,792
$12,732

High
$32,463,365
$13,675

Scenario #2
Cost to City with H.S.A
Cost Per Employee

Low
$27,944,701
$11,771

Midpoint
$30,111,482
$12,684

High
$32,278,263
$13,597

Migration Assumptions
Scenario #1
Enrollment

Legacy
20%

Value
40%

CDHP
40%

Scenario #2
Enrollment

Legacy
20%

Value
50%

CDHP
30%

Data Reliance
Benefit plan designs, subscriber counts, base claim projections, administrative expense projections,
member premiums, HSA contributions and cost per employee were supplied to HCA and assumed to
be accurate for the purpose of this review.

2015 GALLAGHER BENEFIT SERVICES, INC.

ARTHUR J. GALLAGHER & CO. | AJG.COM

Limitations
Our estimates are based on generally accepted actuarial techniques applied in a consistent manner and
determined in accordance with the Actuarial Standards of Practice (ASOPs) established by the
Actuarial Standards Board (ASB) and with applicable laws and regulations.
The undersigned is a member of the American Academy of Actuaries, meets the Qualification
Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States promulgated by
the American Academy of Actuaries, and has the education and experience necessary to perform the
work.
If you have any further questions, please call.
Sincerely,

Robert L. Jordan, ASA, MAAA, FCA

Client Consulting Actuary
cc:

Mark Rosenberg, HCA

2015 GALLAGHER BENEFIT SERVICES, INC.

ARTHUR J. GALLAGHER & CO. | AJG.COM