Title
A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT WITH MUTUAL HEALTH SERVICES (MHS) FOR CERTAIN HEALTH BENEFIT PLAN SERVICES; AND DECLARING AN EMERGENCY.
Brief Description: The City of Hudson provides certain health benefits (medical and prescription drug coverage) to regular full-time city employees. The attached legislation seeks Council’s authorization for the City Manager to enter into a contract with Mutual Health Services (MHS) to provide claims administration for the period of January 1, 2025, through December 31, 2025.
Body
Legislative History
None.
Purpose & Explanation
The purpose of this resolution is to authorize the City Manager to enter into a health benefit plan contract with MHS. Staff is recommending entering into a contract with MHS to provide claims administration for the period of January 1, 2025, through December 31, 2025.
The City has historically been fully insured for medical and prescription drug claims. The renewal rates received in the past made staying fully insured advantageous. However, the City received a renewal quote from Medical Mutual for calendar year 2025 that was a 29.8% increase. The City did a request for proposals for both fully insured and self-insured plans. We received no other proposals to remain fully insured. The top proposal for self-insured was a combination of BRM Specialty for stop loss insurance, Mutual Health Sevices for claims administration, and TrueRX for prescription drug administration. Moving to self-insured would require a 10% increase on medical premiums over 2024 to fund the anticipated claims at the appropriate level. Moving to self-insured would save the City an estimated $450,000 over remaining fully insured. The employee contribution percentage for 2025 remains the same as 2024 at 15%.
Staff is once again recommending that the City fund a Health Reimbursement Account (HRA) for each employee equal to the employee’s deductible, a maximum of $2,500/$5,000 (single/family) per employee to cover the City’s potential liability.
Timing Considerations
Open enrollment for health insurance is December 4 through December 13, 2024.
Fiscal Impact
Currently Budgeted
Supplemental Appropriation Required
X Appropriation Not Required.
Recommendation
Suggested Action
Staff recommends City Council approve the attached Resolution authorizing the City Manager to enter into the health benefit plan contract with Mutual Health Services. Staff also recommends the legislation be passed as an emergency measure, so it is in place for open enrollment.
Submitted by,
Thomas J. Sheridan, City Manager,
Jeff Knoblauch, Assistant City Manager - Finance Director
Brian Griffith, Director - Management & Budget
Suzanne Havranek, HR Manager