CC SR 20191106 J - 2020 health insurance
RANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 11/06/2019
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA DESCRIPTION:
Consideration and possible action to adopt the health benefit rates for the new calendar
year
RECOMMENDED COUNCIL ACTION:
1) Adopt Resolution No. 2019-__, A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF RANCHO PALOS VERDES, CALIFORNIA, AMENDING
RESOLUTION NO. 2018-81 INCREASING THE CITY’S MAXIMUM MONTHLY
CONTRIBUTION AMOUNTS FOR EMPLOYEE AND COUNCIL MEMBER
HEALTH INSURANCE PREMIUMS.
FISCAL IMPACT: Included in the Fiscal Year 2019-20 budget.
Amount Budgeted: Included in the FY 19-20 budget
Additional Appropriation: N/A
Account Number(s): Various
ORIGINATED BY: Julie DeZiel, Human Resources Manager
REVIEWED BY: Gabriella Yap, Deputy City Manager
Angelina Garcia, Interim Director of Finance
APPROVED BY: Doug Willmore, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Resolution No. 2018-81 (page A-1)
B. Draft Resolution No. 2019 - ___, amending Resolution No. 2018-81
increasing the City’s maximum monthly contribution amounts for employee
and council member health insurance premiums (page B-1)
C. 2020 Benefit Premiums (page C-1)
BACKGROUND AND DISCUSSION:
On October 16, 2018, the City Council approved changing the City’s broker of record for
health and ancillary benefits from Maniaci Insurance Services to USI Insurance Services.
The health benefit options offered in the 2019 calendar year remain the same for 2020.
There will a slight increase of 5% to the City’s maximum monthly contribution amounts
for employee and council member health insurance premiums. Dental, vision, and other
rates will remain the same. (See Exhibit C)
Staff is bringing forward a recommendation to adopt the new health benefit rates for the
new calendar year.
1
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action s are available
for the City Council’s consideration:
1. Do not adopt the health benefit rates for the new calendar year.
2. Take other action as deemed appropriate by the City Council.
2
A-1
RESOLUTION NO. 2018-81
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES, INCREASING THE CITY'S MAXIMUM MONTHLY CONTRIBUTION
AMOUNTS FOR EMPLOYEE AND COUNCIL MEMBER HEALTH INSURANCE
PREMIUMS FOR CALENDAR YEAR 2019 AND RESCINDING AND
REPLACING RESOLUTION NO. 2017-58
WHEREAS, as an employer with fewer than 100 employees, the City must
purchase insurance using small-group rates, where employees are assigned
different monthly premiums based on several factors, such as age and number of
dependents; and
WHEREAS, the City is billed for the small-group rates associated with each
employee, based on their age and number of dependents; and
WHEREAS, the City has utilized so-called composite rates, rather than individual
rates, to determine the employee's contribution for each level of coverage offered
for each medical plan such that all employees and Council Members, regardless
of their age and number of dependents, receive the same deduction for the same
level of coverage selected if it is for the same medical plan; and
WHEREAS, the maximum City contribution limits the City publishes are based on
medical composite rates that are for illustration purposes, and the City's actual
maximum contribution for medical premiums can vary from employee to employee,
based on their age and number of dependents; and
WHEREAS, on October 17, 2017, the City Council adopted Resolution No. 2017-
58 establishing maximum City contributions towards employee health insurance
premiums for FY 2018; and
WHEREAS, the City desires to sufficiently contribute to employee health insurance
premiums by providing sufficient maximum City contributions towards same for its
active full-time employees, City council persons, and part-time employees eligible
for an ACA offer of medical coverage.
WHEREAS, it is uncertain whether the maximum City contributions limits towards
health insurance premiums established for calendar year 2018 will be sufficient for
calendar year 2019 because the small group medical rates have not yet been
published but are expected to be published by the end of October; and
WHEREAS, the City may approve a change in the City's Benefits Broker of
Record, the addition of new health benefit options and revision of new insurance
carriers that could result in potential savings to the City that could impact the
maximum health contribution limits previously adopted; and
Resolution No. 2018-81
Page 1 of 3
A-2
NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
Section 1: The City's contribution for each full-time employee or active City Council
person shall have a maximum amount which may be applied toward the full cost
of the active full-time employee's or active council person's medical, dental, vision
and mental health benefits, and pay up to 50% of the cost of medical, dental, vision
and mental health benefits for eligible dependents (based on the composite
medical rates, such that there may be instances wherein the actual City
contribution to an individual is less/more than 50% of the maximum limits).
Section 2: The City's contribution for part-time employees that are considered "full-
time employees," as defined by the Affordable Care Act, shall have the maximum
amount applied only toward the cost of the medical premium and up to 50% of the
cost for eligible dependents (based on the composite medical rates, such that there
may be instances wherein the actual City contribution to an individual is less/more
than 50% of the maximum limits).
Section 3: The City will pay towards the participant's deductible in the HSA Plan
$3,000 for Employee Only and $6,000 for Employee+ 1 and Family (3 or more).
This City contribution is not available to part-time employees that have been
deemed "full-time" under the ACA.
Section 4: Any amounts remaining between the necessary contributions required
and the maximum amounts specified in Sections 1 and 2 of this Resolution are not
to be paid to the active full-time or part-time employee or active City Council
person, as applicable .
Section 5: If a full-time employee or City Council member can provide proof of
group medical coverage that is generally similar to the City's medical coverage,
and declines the medical coverage offered by the City, the City will make a cash-
in-lieu payment to the opting out full-time employee or City Council member under
the City's cafeteria plan as governed by Section 125 of the Internal Revenue Code.
The cash-in-lieu payment shall be equal to 50% of the lowest cost medical plan
(based on the medical composite rates) available to employees for employee only
coverage.
Section 6 : The City shall pay the full cost for each active full-time employee's life
insurance premium with accidental death & dismemberment premium for
employees and their dependents as well as the long term disability premium for
employees. The City shall pay the full cost for each active City Council member's
life insurance premium.
Resolution No . 2018-81
Page 2 of 3
A-3
Section 7·: The Health Savings Account will be funded semi-annually in
accordance with Rancho Palos Verdes Employee Association's Memorandum of
Understanding as may be modified from time to time.
Section 8: The City Manager or his/her designee, is authorized to adopt rules and
procedures for the implementation of this Resolution.
Section 9: Resolution No. 2017-58 is hereby rescinded and replaced by this
Resolution.
PASSED, APPROVED and ADOPTED this 16th day of October 2018.
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )
I, Emily Colborn, City Clerk of the City of Rancho Palos Verdes, hereby
certify that the above Resolution No. 2018-81 was duly and regularly passed and
adopted by the said City Council at a regular meeti thereof held on October 16,
2018.
Clerk
Resolution No. 2018-81
Page 3 of 3
Resolution No. 2019-__
Page 1 of 3
RESOLUTION NO. 2019-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF RANCHO PALOS VERDES, TO ADJUST THE
CITY'S MAXIMUM MONTHLY CONTRIBUTION
AMOUNTS FOR EMPLOYEE AND COUNCIL MEMBER
HEALTH INSURANCE PREMIUMS AND RESCINDING
AND REPLACING RESOLUTION NO. 2018-81
WHEREAS, as an employer with fewer than 100 employees, the City must
purchase insurance using small-group rates, where employees are assigned
different monthly premiums based on several factors, such as age and number of
dependents; and
WHEREAS, the City is billed for the small-group rates associated with each
employee, based on their age and number of dependents; and
WHEREAS, the City has utilized so-called composite rates, rather than
individual rates, to determine the employee's contribution for each level of coverage
offered for each medical plan such that all employees and Council Members,
regardless of their age and number of dependents, receive the same deduction for
the same level of coverage selected if it is for the same medical plan; and
WHEREAS, the maximum City contribution limits the City publishes are based
on medical composite rates that are for illustration purposes, and the City's actual
maximum contribution for medical premiums can vary from employee to employee,
based on their age and number of dependents; and
WHEREAS, on October 9, 2018, the City Council adopted Resolution No.
2018-81 establishing maximum City contributions towards employee health
insurance premiums for FY 2019; and
WHEREAS, the City desires to sufficiently contribute to employee health
insurance premiums by providing sufficient maximum City contributions towards
same for its active full-time employees, City council persons, and part-time
employees eligible for an Affordable Care Act (ACA) offer of medical coverage; and
B-1
Resolution No. 2019-__
Page 2 of 3
NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF RANCHO
PALOS VERDES DOES HEREBY FIND, DETERMINE AND RESOLVE AS
FOLLOWS:
Section 1: The City's contribution for each full-time employee or active City
Council person shall have a maximum amount equal to the full cost of the active
full-time employee’s or active council person's medical, dental, vision and mental
health benefits, and pay up to 50% of the cost of medical, dental, vision and
mental health benefits for eligible dependents (based on the compo site medical
rates provided annually by the broker, such that there may be instances wherein
the actual City contribution to an individual is less/more than 50% of the maximum
limits). This is not a cafeteria amount.
Section 2: The City's contribution f or part-time employees that are
considered "full- time employees," as defined by the Affordable Care Act, shall
have the maximum amount applied only toward the cost of the medical premium
and up to 50% of the cost for eligible dependents (based on the composite medical
rates, such that there may be instances wherein the actual City contribution to an
individual is less/more than 50% of the maximum limits).
Section 3: The City will pay towards the participant's deductible in the HSA
Plan $3,000 for Employee Only and $6,000 for Employee+ 1 and Family (3 or
more). This City contribution is not available to part-time employees that have
been deemed "full-time" under the ACA.
Section 4: Any amounts remaining between the necessary contributions
required and the maximum amounts specified in Sections 1 and 2 of this
Resolution are not to be paid to the active full-time or part-time employee or active
City Council person, as applicable.
Section 5: If a full-time employee or City Council member can provide proof
of group medical coverage that is generally similar to the City's medical coverage,
and declines the medical coverage offered by the City, the City will make a cash-
in-lieu payment to the opting out full-time employee or City Council member under
the City's cafeteria plan as governed by Section 125 of the Internal Revenue
Code. The cash-in-lieu payment shall be equal to 50% of the lowest cost medical
plan (based on the medical composite rates) available to employees for employee
only coverage.
Section 6: The City shall pay the full cost for each active full -time
employee's life insurance premium with accidental death & dismemberment
premium for employees and their dependents as well as the long term disability
premium for employees. The City shall pay the full cost for each active City Council
member's life insurance premium.
B-2
Resolution No. 2019-__
Page 3 of 3
Section 7: The Health Savings Account will be funded semi-annually in
accordance with Rancho Palos Verdes Employee Association's Memorandum of
Understanding as may be modified from time to time.
Section 8: The City Manager or his/her designee, is authorized to adopt rules
and procedures for the implementation of this Resolution.
Section 9: Resolution No. 2018-81 is hereby rescinded and replaced by
this Resolution.
PASSED, APPROVED and ADOPTED this 6th day of November 2019.
____________________________
Mayor
Attest:
__________________________________
City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )
I, Emily Colborn, City Clerk of the City of Rancho Palos Verdes, hereby
certify that the above Resolution No. 2019-___ was duly and regularly passed
and adopted by the said City Council at a regular meeting thereof held on
November 6, 2019.
______________________________ _____________________
City Clerk
B-3
City of Rancho Palos Verdes
2020 Benefit Options and Consolidated Rates
Benefit
Type
Plan Name Coverage Level Monthly
Premium
City Paid Employee
Paid
Deduction Per
Paycheck
Medical Blue Shield Silver PPO + HSA Employee Only $740.47 $740.47 - -
Medical Blue Shield Silver PPO + HSA Employee + 1 $1,480.94 $1,110.71 $370.24 $170.88
Medical Blue Shield Silver PPO + HSA Employee + Family $1,925.23 $1,332.85 $592.38 $273.41
Medical Blue Shield Gold PPO 500 Ded. (No HSA) Employee Only $1,258.65 $1,258.65 - -
Medical Blue Shield Gold PPO 500 Ded. (No HSA) Employee + 1 $2,283.00 $1,770.83 $512.18 $236.39
Medical Blue Shield Gold PPO 500 Ded. (No HSA) Employee + Family $3,074.36 $2,166.50 $907.86 $419.01
Medical Blue Shield Platinum Access+ HMO Employee Only $764.68 $764.68 - -
Medical Blue Shield Platinum Access+ HMO Employee + 1 $1,481.31 $1,123.00 $358.31 $165.38
Medical Blue Shield Platinum Access+ HMO Employee + Family $1,900.26 $1,332.47 $567.79 $262.06
Medical Blue Shield Platinum Trio HMO Employee Only $644.10 $644.10 - -
Medical Blue Shield Platinum Trio HMO Employee + 1 $1,248.02 $946.06 $301.96 $139.37
Medical Blue Shield Platinum Trio HMO Employee + Family $1,603.79 $1,123.95 $479.84 $221.47
Medical Kaiser HMO Employee Only $716.56 $716.56 - -
Medical Kaiser HMO Employee + 1 $1,387.63 $1,052.09 $335.53 $154.86
Medical Kaiser HMO Employee + Family $1,784.22 $1,250.39 $533.83 $246.38
Dental Delta Dental PPO Employee Only $50.86 $50.86 - -
Dental Delta Dental PPO Employee + 1 $95.35 $73.11 $22.24 $10.26
Dental Delta Dental PPO Employee + Family $144.47 $97.67 $46.80 $21.60
Dental DeltaCare HMO Employee Only $16.27 $16.27 - -
Dental DeltaCare HMO Employee + 1 $29.42 $22.85 $6.57 $3.03
Dental DeltaCare HMO Employee + Family $43.34 $29.81 $13.53 $6.24
Vision VSP Choice Employee Only $17.28 $17.28 - -
Vision VSP Choice Employee + 1 $25.05 $21.17 $3.88 $1.79
Vision VSP Choice Employee + Family $44.57 $30.93 $13.64 $6.30
EAP Anthem EAP Per employee per month $1.20 $1.20 - -
Medical Opt-Out Monthly Amount: $322.05
(Cash-in-lieu = ½ x Lowest medical rate* for “Employee Only” coverage)
*2020 Lowest cost medical plan = Blue Shield Platinum Trio HMO
C-1