Minutes of the special meeting of the Fayetteville municipal council: August 24, 2021
Background: The benefits program for 2022 is described below:
Health insurance: The one-year retrospective period of the city’s health claims shows a utilization rate of 91.2% of claims paid versus premiums paid. Under the city’s current renewal rate guarantee with the Arkansas Blue Cross Blue Shield, this utilization rate would result in a 6% premium increase for 2022 for the city’s medical plans. City staff and the broker have reviewed the plan structures and use of the city’s current offerings of the HSA, HDHP and PPO plan and recommend plan changes to both plans to reverse the 6% premium increase and lower premiums for both in 2022 compared to current premiums in 2021.
The 2022 HDHP plan will have a lower deductible ($ 2,800 individual / $ 5,600 family), once the deductible is reached, the coinsurance will be 80%, maximum network ($ 5,600 individual / $ 11,200 family). By adopting this plan structure, the overall premium will decrease by 7.4% compared to the premiums for the current year.
However, the PPO 2022 plan will have a higher deductible ($ 1,500 for one person / $ 3,000 for a family); this plan will provide co-payments for primary care, specialists and emergency care visits, coinsurance will be 80%, maximum out of pocket ($ 4,500 individual / $ 9,000 family).
By adopting this plan structure, the overall premium will decrease by 0.6% compared to the premiums for the current year.
Staff and broker recommend renewing with Arkansas Blue Cross Blue Shield for 2022 with proposed changes to the plan structure and premium reductions of 7.4% for the HDHP option and 0.6% for the ‘PPO option. Switching to the proposed plans, staff said the annual cost savings would exceed $ 800,000 in premiums.
COBRA: Staff recommend changing providers for COBRA administration to Consolidated Administration Services (CAS). Switching to CAS will cost $ 2,556 more per year over WageWorks based on current registrations. CAS is an Arkansas-based supplier that will provide better communication and support for internal and external customers than the current supplier.
City paid life insurance and LTD benefits: OneAmerica has maintained the rate for employer-paid basic life insurance and employer-paid private life products for 2022. Staff recommend renewing with OneAmerica for the same insurance coverage and same current rates.
Flexible expense accounts: Staff recommend that American Fidelity continue as a flexible expense account administrator with no service charge.
Health savings accounts: Staff recommend First Security Bank to continue as an administrator of no-charge health savings accounts for services.
Dental insurance paid by employee: Delta Dental has a rate withholding for 2022. Staff recommend renewing with Delta Dental.
Benefits paid by volunteer employees: OneAmerica has a 2022 rate withholding on short-term disability insurance and employee-paid life insurance. Staff recommend renewing with OneAmerica for these products.
Additional benefits paid by employees: Staff recommend continuing to provide additional benefits to employees through American Fidelity, including: Disability Insurance, Accident Only Insurance, Cancer Insurance, Critical Illness Insurance, life insurance, AF term life insurance, AAF permanent life insurance and hospital insurance.
Discussion of August 17:
Those with opposing comments to the plan criticize the proposed increases in the maximum reimbursable expenses of the high-deductible health plan. Some of those opposed have said they would rather pay a premium increase rather than risk the potential of a higher annual expense.
The council voted 6-1 to postpone the article until next Tuesday (August 24). Petty voted against.
Discussion of August 24:
Missy Cole, the city’s director of human resources, shared data showing the city’s actual annual claims paid in 2020 in the current plan compared to what the proposed plan would have been:
She then showed the impact on costs:
Finally, she showed what is the maximum exposure to an employee or a family:
During the public comments, Cody Ashworth said he understands that there are only a small number of people who will be affected by the rate change, but he said those affected simply could not. manage the increase.
Nick White, a police department patroller and chairman of the city’s police union, said the organization did not support the proposed new plan, but would prefer a rate hike that would keep maximum out-of-pocket expenses closer to what it is now.
Captain Jimmy Vinyard, representing the city’s firefighters union, said his group was also opposed to the proposed tariff change and would rather pay a premium increase rather than face the possibility of a higher annual expense.
Council member Teresa Turk said health insurance is part of a perk and if the city wants to recruit and retrain police and firefighters it would be wise to support what employees have said they want. She said she knew the price would be higher, but it might be worth making sure city staff are happy.
Council member Sloan Scroggin agreed and said he had heard from enough city employees to know they were opposed to the proposed change. He said he could not support the new plan and would prefer the previous option with the resulting 6% rate hike.
Mayor Jordan said if council wants to change the package to include the current program’s high-deductible health plan with the required 6% rate hike, it will ensure that next year’s budget is set. so as to cover additional expenses. .
Board member Sarah Bunch said she supports what employees want, but fears the city will continue to face such problems in the future with rising insurance costs.
The council amended the 8-0 package and voted unanimously to adopt the resolution.
This meeting was adjourned at 6:10 p.m.