O-2002-2594 - Laserfiche WebLink

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It . . . REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: ADDroDriation Requested By: Source of Funds: Medical Fund Department: Account Number: 014-6144-515-6011 Report: Resolution: Ordinance: X Amount Budgeted: 3,500,000.00 Exhibits: Ordinance Amount Requested: ':l)c;oo)ooo 00 Budgeted ltem:crES J NO Exhibits: Sehedule nf Prnpnlled Rpnpfitll Chang,lI SUMMARY & RECOMMENDATION At the July 15, 2002, City Council meeting, staff presented a status report on the Employee Health Services Fund, Due to rising costs of health care services, Council was notified of the need to implement several changes to the medical fund. As part of the FY2002-2003 budget, Council approved an increase of the City's contribution to the medical fUnd by approximately 29% (from $3,500.00 to $4,500.00) per employee. Although the City would continue 100% of contributions for employee only coverage, employees were required to double their contributions toward dependent coverage effective October 1, 2002. Contributions by retirees remain unchanged at this time. The City must implement even more changes during the current budget year. Staff, the City's Third Party Administrator (TML-IEBP), and benefits consultant (The Welch Company) propose changes to the Medical Plan Design (Exhibit A) to become effective January 1, 2003. How the medical plan is designed determines the percentages of benefits employees would receive for health care and out-of-pocket dollars employees should expect to pay. Based on annualized claims for 2002, ($2,700,000.00) the City anticipates savings from the medical plan redesign of approximately $309,000.00 for the 2003 benefit year, in addition to the estimated $300,000.00 increased contribution by the City. Staff Recommendation Adopt an ordinance authorizing redesign of the medical plan (Exhibit A). Action Required bv Council: Adopt an ordinance authorizing redesign of the medical plan (Exhibit A). lr-pR. Date