City Council
259 N. Wilma Avenue
Ripon, CA 95366
MEMO
To: Honorable City Council
From: Kevin Werner, City Administrator
Date: 10/11/2022
Subject: 2023 Health and Welfare Plan for City Council and Employees RECOMMENDED ACTION:
Staff is recommending the City Council consider approving the following:
1. Provide the following health and welfare plans to all City employees during calendar year 2023:
• Kaiser Healthcare
• CSAC Blue Shield Healthcare
• Sunlife Dental
• VSP-Sunlife Vision
• Sunlife Life Insurance
• Sunlife Long-term Disability
2. For Administrative Staff and Non-represented Police Department employees1 participating in the Blue Shield healthcare plan for calendar year 2023, the City and employees are to share in the premium increase above the premium maximum of $1,755.
3. For Administrative Staff and Non-represented Police Department employees1 participating in the Kaiser healthcare plan for calendar year 2023, the City and employees are to share in the premium increase above the premium maximum of $1,850.
4. For calendar year 2023, the City to continue reimbursing Administrative Staff and Nonrepresented Police Department employees1 participating in the Blue Shield healthcare
plan for 100 percent of the deductible cost. Also, the City to reimburse these employees for co-insurance cost after $2,000 is paid by the employee.
1 The negotiated Memorandum of Understanding for each represented group includes the same benefit.
BACKGROUND/DISCUSSION:
Bohannon’s Insurance Group has received renewal quotes for the City provided health and welfare plans for calendar year 2023.
Annual Cost Summary
Below is comparison of the calendar year 2022 health and welfare annual premium cost to the 2023 renewal quotes received:
Table 1 -- Annual Premium Renewal Summary
Plan 2022 2023 % Change
Kaiser Healthcare $935,526 $966,637 +3.3%
CSAC Blue Shield Healthcare $596,864 $653,486 +9.5%
Sunlife Dental $91,052 $91,052 -
MES Vision $16,434 $16,434 -
Sunlife Life Insurance/LTD $14,832 $14,832 -
Total $1,654,708 $1,742,441 +5.3%
Employee Monthly Premium Responsibility
As of January 1, 2015, the City and employees began sharing in premium increases above a defined baseline premium. For calendar year 2022, the baseline premium was $1,850 and $1,650 per month for Kaiser and Blue Shield participants, respectively. Staff is recommending the 2023 premium baseline for Blue Shield participants be increased from $1,650 to $1,755 per month because of the larger annual increase in the 2023 premium increase of +9.5% from Blue Shield, as compared to the +3.3% Kaiser increase. This baseline premium increase will maintain a similar employee contribution to an employee’s share of the premium increases that have occurred since 2015 for both those employees with Blue Shield and Kaiser. The additional expense to the City as a result of this change to the baseline premium is $20,000.
The following table summarizes the changes to the employee monthly premiums from calendar year 2022 to 2023.
Table 2 -- Summary of Monthly Premiums
CATEGORY 2022
PREMIUM b
2023
PREMIUM b
EMPLOYEE
RESPONSIBILITY
CITY
RESPONSIBILITY
Employees w/ Blue Shielda
Plan a
Employee Only $773.41 $842.42 $0 $842.42
Employee + Spouse $1,548.37 $1,687.42 $0 $1,687.42
Employee + Children $1,566.84 $1,705.89 $0 $1,705.89
Employee + Family $2,045.27 $2,225.52
$235.26
(2022:$197.63)
)
$1,990.26
Employees w/ Kaiser Plan
Employee Only $731.83 $754.74 $0 $754.74
Employee + Spouse $1,599.88 $1,650.26 $0 $1,650.26
Employee + Children $1,480.61 $1,526.41 $0 $1,526.41
Employee + Family $2,209.98 $2,278.69
$214.35
(2022:$179.99) $2,064.34
Note(s):
a. The reimbursement for deductible and co-insurance is not included. Employees participating in the Blue Shield plan are reimbursed 100 percent of the Blue Shield plan healthcare deductible cost. Also, the City reimburses these employees coinsurance cost after the first $2,000 is paid by the employee. The maximum reimbursement by the City is $3,000 individual/$8,000 family, per year.
b. Includes healthcare, dental, vision, and chiropractic premiums.
Reimbursement of Employee Deductible and Co-Insurance
Starting in 2013, the City changed the previously offered Blue Shield Gold Plan to a Silver Plan, which provided a significant premium savings, although included a higher deductible and coinsurance requirement. The City agreed to reimburse the employees for 100 percent of the deductible cost and co-insurance cost, after the employee pays the first $2,000 of the coinsurance.
Below is a summary of the premium savings realized from switching from the Blue Shield Gold Plan to the Silver Plan compared to the actual deductible and co-insurance reimbursement cost.
Table 3 -- Summary of Deductible and Co-Insurance Cost
Year Premium
Savings
Reimbursement
Cost
Annual
Savings
2013 $188,786 $31,377 $157,409
2014 $197,084 $52,953 $144,131
2015 $194,508 $47,877 $146,631
2016 $206,672 $35,648 $171,024
2017 $215,730 $34,935 $180,795
2018 $215,583 $49,950 $165,633
2019 $210,111 $37,398 $172,713
2020 $219,501 $27,800 $191,701
2021 $236,459 $25,816 $210,643
2022 $256,668 $30,000 (a) $226,668
Note(s):
a. Reimbursement cost is projected based on the actual cost received through August 2022.
This program has allowed the City to continue to provide a high level of healthcare benefit to the employee during a time when healthcare costs were experiencing significant cost increases.
RESOLUTION NO. 22-40
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RIPON ADOPTING AN INCREASE IN THE COST OF
HEALTH AND WELFARE BENEFITS TO BE PROVIDED TO
NON-REPRESENTED EMPLOYEES AND CITY COUNCIL
MEMBERS IN CALENDAR YEAR 2023
WHEREAS, the City Council of the City of Ripon is desirous of providing health and welfare benefits for all employees of the City of Ripon (“Employees”) for calendar year 2023; and
WHEREAS, consistent with State law and pursuant to Ripon Municipal Code Chapter
2.04.010, each member of the City Council is entitled to receive health benefits at the same level, and including the same coverage, as City employees; and WHEREAS, previously the City agreed to pay 50 percent of the premium increase above the maximum monthly contribution of $1,850 for employees enrolled with Kaiser Permanente and $1,650 for employees enrolled with Blue Shield; and WHEREAS, the City Council is desirous of increasing the maximum monthly contribution amounts for Kaiser Permanente and Blue Shield to $1,850 and $1,755, respectively; and
WHEREAS, pursuant to Ripon Municipal Code 2.04.010, prior to the City Council approving any increase in the cost of providing health benefits to City Council members, the City Council may consider whether to accept said increase at a public meeting after public input.
Thereafter, the City Council may adopt a resolution approving said increase, or a portion of said increase.
NOW, THEREFORE, BE IT RESOLVED, the following summarizes the health and welfare plans to be provided for calendar year 2023:
• Kaiser Healthcare
• CSAC Blue Shield Healthcare
• Sunlife Dental
• VSP Sunlife Vision
• Sunlife Life Insurance
• Sunlife Long-term Disability
BE IT FURTHER RESOLVED, that for calendar year 2023, the City agrees to pay 50 percent of the premium increase above the maximum monthly contribution of $1,850 for employees enrolled with Kaiser Permanente and $1,755 for employees enrolled with Blue Shield; and
BE IT FURTHER RESOLVED that the City Council of the City of Ripon does hereby approve the increase in cost for the City to provide health benefits for calendar year 2023 to City employees and Council members, as described in the table below.
CATEGORY
2022
PREMIUM b
2023
PREMIUM b
EMPLOYEE
RESPONSIBILITY
CITY
RESPONSIBILITY
Employees w/ Blue Shield Plan a
Employee Only $773.41 $842.42 $0 $842.42
Employee + Spouse $1,548.37 $1,687.42 $0 $1,687.42
Employee + Children $1,566.84 $1,705.89 $0 $1,705.89
Employee + Family $2,045.27 $2,225.52
$235.26
(2022:$197.63) $1,990.26
Employees w/ Kaiser Plan
Employee Only $731.83 $754.74 $0 $754.74
Employee + Spouse $1,599.88 $1,650.26 $0 $1,650.26
Employee + Children $1,480.61 $1,526.41 $0 $1,526.41
Employee + Family $2,209.98 $2,278.69
$214.35
(2022:$179.99) $2,064.34
Note(s):
a. The reimbursement for deductible and co-insurance is not included. Employees participating in the Blue Shield plan are reimbursed 100 percent of the Blue Shield plan healthcare deductible cost. Also, the City reimburses these employees coinsurance cost after the first $2,000 is paid by the employee. The maximum reimbursement by the City is $3,000 individual/$8,000 family, per year.
b. Includes healthcare, dental, vision, and chiropractic premiums.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Ripon this 11th day of October, 2022, by the following vote:
RESULT: ADOPTED BY CONSENT VOTE [UNANIMOUS]
MOVER: Daniel de Graaf, Council Member
SECONDER:Michael Restuccia, Vice Mayor
AYES: Uecker, Restuccia, Zuber, de Graaf, Barton
THE CITY OF RIPON,
A Municipal Corporation
By ________________________________
DEAN UECKER, Mayor
ATTEST:
By: ___________________________
LISA ROOS, City Clerk