City Council Agenda Report
Meeting Date: October 3, 2023
From: Michael Earl, Director of Human Resources
Department: Human Resources
Submitted by: Michael Earl, Director of Human Resources Subject
2024 Calendar Year Medical, Dental, Vision, Life, and Employee Assistance Program Benefit Proposals for City Employees and Retirees
Recommendation
Approve the acceptance of the 2024 Calendar Year Medical, Dental, Vision, Life, and Employee Assistance program proposals and authorize the City Administrator to execute 2024 calendar year carrier agreements with Blue Shield of California, Anthem, MetLife, EyeMed, Mutual of Omaha, and Anthem PRISM EAP.
Background
Each year, with the assistance of the City’s insurance benefits brokerage and consulting firm, currently Alliant Insurance Services, Inc., the City reviews its various lines of coverage for employees and retirees to ensure that the City is continuously receiving competitive rates. Blue Shield of California currently provides four (4) medical plans for employees and early retirees.
For calendar year 2024, Blue Shield of California submitted a proposal with the desired benefits and coverage at competitive rates. The Access+ HMO 15, TRIO ACO HMO 15, PPO Combined Deductible, and HDHP PPO Savings Embedded plans were negotiated between the carrier and broker with final renewal rate increases of 6%.
Blue Shield of California has continuously provided the City with competitive rates while maintaining the same level of coverage for employees and retirees. In 2023, the renewal for all Blue Shield plans came in at a 6% increase. The City's final negotiated renewal premium rate increases continue to remain below the market trend for comparable plans in the state of California. Furthermore, Blue Shield of California has continuously provided a wellness stipend of between $25,000 and $30,000 for which the City may use to offset the costs of providing a variety of programs and services. It is recommended that the City continue to contract with Blue Shield of California for the 2024 calendar year.
Anthem currently provides two (2) Medicare plans for retirees. For calendar year 2024, Anthem submitted a proposal with the desired benefits coverage at competitive rates. The Anthem Medicare HMO and the Anthem Medicare PPO were negotiated with a final rate increase of 5%.
Anthem has continuously provided the City with competitive rates while maintaining the same level of coverage for Medicare eligible retirees. It is recommended that the City continue to contract with Anthem for the 2024 calendar year.
MetLife currently provides two (2) dental plans for employees and retirees. For calendar year 2024, MetLife submitted a proposal with the desired benefits and coverage at competitive rates.
For both the Dental HMO plan and the Dental PPO plan, MetlLife has proposed no increase for 2024 and a cap of no more than 6% upon renewal in the following year. It is recommended that the City continue to contract with MetLife for the 2024 calendar year.
EyeMed currently provides vision insurance benefits for City employees. There is no change in the premiums for the 2024 plan year. It is recommended that the City continue contract with EyeMed to provide vision insurance benefits for 2024.
Mutual of Omaha provides employees with Basic Life Insurance for the employee and eligible dependents. The proposal submitted by Mutual of Omaha continues the existing program with no changes to the levels of benefits and guarantees the current rates through December 31, 2024. It is recommended that the City continue to contract with Mutual of Omaha for the 2024 calendar year.
The City also provides an Employee Assistance Program (EAP) benefit provided through Anthem PRISM EAP. The renewal for the EAP provides the same coverage with no increase in premiums for 2024. It is recommended that the City continue to contract with Anthem PRISM for EAP benefits.
Fiscal Impact
The total annual estimated premium for all lines of coverage is $5,515,773. The amount will vary slightly based on enrollment of employees and retirees and their plan selections. Furthermore, the total annual premium is offset by employee and retiree contributions. Below is a breakdown of the approximate cost per line of coverage:
Blue Shield of California: $4,915,789
Anthem: $184,604
MetLife: $361,369
EyeMed: $46,081
Mutual Of Omaha: $4,178
Anthem PRISM EAP: $3,752
Sufficient funds for this expenditure are available in the Insurance Premiums - Medical Account for each City Department’s Fiscal Year 2023-24 budget and will be subsequently budgeted for the remainder of the renewal period.
Attachments
1. Benefit Renewal Confirmation Documents