1. Health InsurancerK ��
City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997 -Telephone (406) 758-7000 Fax - (406) 758-7758
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REPORT TO: Honorable Mayor and City Council
FROM: Chris Kukulski, City Manager
SUBJECT: Health Insurance
MEETING DATE: June 21, 2004
BACKGROUND: Attached is a spread sheet that represents the current and recommended
health insurance premiums from Blue Cross and Blue Shield. The health Insurance committee
which is made up of two representatives for the AFSCME Union, and one representative from
each of the other bargaining units, retirees and non union staff is recommending that the city no
longer remain self insured.
Also included on the spreadsheet are the costs per the Council discussion of June 16, 2004 of
splitting the increase 50150 and the insurance committees recommendation on how to create a
new rate structure.
FISCAL EFFECTS: The increased cost will be dependent on which direction the Council
recommends. The health insurance committee's recommendation will result approx. a 6.5 mill
increase and the 50150 proposal would increase will result in approx. a 4.25 mill increase.
RECOMMENDATION: The City Council provide the city manager with direction as to what
portion of the insurance premiums are to be paid by the city and which are to be paid by the
employees.
Respectfully submitted,
Chris A. Kukulski, City Manager
Suggested rate splitting increase 50150 council /employee
Fully Funded Blue Choice 70/30 plan
plus $125,000 run out FYI
2004 rates
RATE CITY EMP RATE CITY
$ 468.00 $
$ 923.00 $
$ 1,063.00 $
Retirees -medicare
$ 221.25 $
$ 442.50 $
416.00 $ 52.00
758.00 $ 165.00
846.00 $ 217.00
100%
- $ 221.25
$ 442.50
EMP
$ 364.00 $ 364.00 $ -
$ 720.00 $ 656.50 $ 63.50
$ 834.00 $ 731.50 $ 102.50
Retirees -medicare 100%
$ 196.00 $ $ 196.00
$ 375.00 $ $ 375.00
18-Jun-04
Committee comments:
The problem with this rate is that the employee share for two party $165 is three times the single rate $52.
The rate should be no more than twice the single rate. Blue Cross's total rate for two party S923 is shghlty less
twice the single $468.
Additionally the employee increase for family from $102.50 to $217 is 112%, City increase is 14%.
2 party increase from $63.50 to S165 is 159%, City increase is 14%.
HEALTH COMMITTEE - recommended rate structure
Fully Funded Blue Choice 70J30 plan
plus $125,000 run out
FYI
2004 rates
RATE CITY
EMP
RATE
CITY
EMP
$ 468.00 $ 418.00
$
50.00
$ 364.00
$ 364.00
$ -
$ 923.00 $ 823.00
$
100.00
$ 720.00
$ 656.50
$ 63.50
$ 1,063.00 $ 913.00
$
150.00
$ 834.00
$ 731.50
$ 102.50
Retirees -medicare
100%
Retirees -medicare
100%
$ 221.25 $ -
$
221.25
S 196.00
$ -
$ 196.00
$ 442.50 $ -
$
442.50
$ 375.00
$ -
$ 375.00
Committee Comments:
Committee felt a flat rate for employees was fair and equitable.
Consideration - the County family rate for employees is $202 a month, however, their deductible is $300 with 75/25 plan.
Our plan has a $1,000 deductible and a 70/30 co -pay which means more out of pocket to our employees.
The increase to employees will be just over 50% for both two party and family.
ASFCME raises..30 hour=$52.00 a month