Title
A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT WITH SUMMACARE FOR CERTAIN HEALTH BENEFIT PLAN SERVICES; AND DECLARING AN EMERGENCY
Executive Summary: The City of Hudson provides certain (medical and prescription drug coverage) health benefits to regular full-time city employees. The attached legislation seeks Council's authorization for the City Manager to enter into a contract with SummaCare for certain health benefit plan services for the period of January 1, 2015 thru December 31, 2015.
Body
Legislative History
None.
Purpose & Explanation
The purpose of this resolution is to authorize the renewal of the City's health insurance plan with SummaCare. The original renewal quote was in excess of 16% however after negotiations with SummaCare, the amended renewal rate is 11.7%. Staff is recommending entering into a contract with SummaCare for medical and prescription drug coverage for the period of January 1, 2015 thru December 31, 2015.
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 $2,000/$4,000 (single/family) per employee to cover the City's potential liability. For 2014, it is estimated that approximately 49% of the HRA account will be used. We recommend rolling over the HRA savings into 2015 which reduces the estimated cost of health care to an increase of 5.54% as compared to 2014.
Staff is proposing no increase in the employee contribution percentage of 11.5% for the first half of 2015 and increasing employee contribution to 13% for the second half of 2015. The following is a breakdown of the monthly contributions that employees would experience in the first half of 2015: $72.94 per month for single coverage; $151.54 per month for employee/spouse coverage; $144.14 per month for employee/child(ren) coverage; and $214.24 for family coverage. This represents an average increase of 6.4% to employees over 2014.
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