Title
Employee Benefits Renewal FY2014
History
The Horton Group completed a market analysis on behalf of Village of Orland Park and has provided final recommendations for the 01/01/2014 renewal of the following benefit programs:
• Medical/RX
• Dental
• Vision
• Life and AD&D
• STD - ASO
• Flexible Spending Account (FSA)
• Employee Assistance Program (EAP)
• Crisis Response Program (Community)
• Virgin Health Miles (Wellness Initiative)
• CHC Biometric Screenings (Wellness Initiative)
A summary of these recommended options is attached to this agenda item for reference.
Based on the final analysis provided by The Horton Group, the following carriers/vendors associated with each benefit offering effective 01/01/2014 are being recommended:
• BlueCross BlueShield of Illinois (Medical/RX)
• Delta Dental of Illinois (Dental)
• EyeMed (Vision)
• Dearborn National (Life/AD&D)
• Guardian (STD - ASO)
• Allied Benefit Systems (Flexible Spending Account Administration)
• Metro Family Services (Employee Assistance Program)
• Metro Family Services (Crisis Response Program - Community)
• Virgin HealthMiles (Pedometer and Rewards Program - Wellness Initiative)
• CHC (Biometric Screenings - Wellness Initiative)
• The Horton Group (Benefit Consultant)
A summary of the projected annual expense for each benefit offering is provided below.
Line of Coverage Annual Expense Comments
Medical/RX $5,424,458 0% increase
Dental $275,419 6.72% increase overall
Vision $36,475 0% increase
Life and AD&D $63,967 18.42% decrease
FSA $3,000 0% fee increase, assumes 36 fees at 5.75 pepm, and $500 adm.
STD - ASO $3,787 $1,400 increase over 2013
Virgin Health Miles $22,000 20% decrease
CHC Wellness $35,000 Expect 100 new participants (235 in 2013) at $105 per screening
Horton Retainer $57,500 no change, quarterly payments of $14,375
EAP $19,500 no change
Crisis Response $30,000 no change
As you know, the Village Medical/Rx plan is self-funded and is administered by an insurance carrier to provide the appropriate medical networks and administrative services. Proposals for the FY2014 Medical/Rx insurance administrator renewal are based on the carriers’ estimations of the Village’s expected claims for the year, stop loss coverage, and run-in claims. To ensure the best possible pricing, The Horton Group works on behalf of the Village to negotiate with carriers to obtain the best and final offers.
BlueCross BlueShield of Illinois (BCBS) presented the most competitive proposal resulting in a flat renewal. The BCBS proposal accounts for expected claims, stop loss coverage, Affordable Care Act (ACA) fees and a general health insurance reserve. The proposal includes maintaining our current HDHP/HSA, Silver, Gold and HMO plans. Slight modifications have been made to the plan designs in accordance with the Affordable Care Act (ACA) and collective bargaining agreements.
Effective 01/01/2014, non-union and IBEW employee premium contributions will continue to be based on a percentage of the overall premium cost and participation by the employee and their enrolled spouse in the biometric screenings. A healthcare equalizer for non-union and IBEW employees has been included in the preparation of the FY2014 budget to help equalize the employee premium expense amongst employee groups. Non-union and IBEW employee contributions are as follows for each medical plan offering:
• HDHP/HSA 3%
• HMO 10%
• Silver Plan 10%.
• Gold Plan - Employees will contribute the difference between the cost to the Village of the PPO (Silver) and the current PPO (Gold) which ranges from 20% for single coverage to 30% for family coverage.
Employees in the AFSCME, Deputy Chief and Commanders, and Police Supervisors groups will make employee contributions based on flat rates which are outlined in the collective bargaining agreements effective, May 1, 2011 through April 30, 2015. These rates include a wellness incentive rate for those employees that participate in the biometric screening. Other employees covered by labor agreements but not specified above will make insurance contributions as outlined in their labor agreements, pending interest arbitration.
In addition, $117,000 is included in the Insurance Fund for the employer seeding of the HSA accounts for those employees enrolled in the High Deductible Plan.
Mr. Michael Wojcik from the Horton Group was present at the Finance Committee meeting on October 7, 2013 to explain the renewal process and results and answer any questions.
On October 7, 2013, this item was reviewed by the Finance Committee, recommended for approval and referred to the Village Board of Trustees for consideration.
Financial Impact
The FY2013 budget will include $6,038,606 in the Insurance Fund and $49,500 in the General Fund (EAP/Crisis Response) to cover the expenses associated with the Village’s employee insurance program.
Recommended Action/Motion
I move to approve entering into agreements with the recommended carriers/vendors and associated expenses effective January 1, 2014.
And
I move to approve retaining the Horton Group’s services at the recommended rate for FY2014.