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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Director of Human Resources
DATE: August 23, 2018
SUBJECT:
A Resolution Establishing Heath and Dental Insurance Monthly Rates of Contributions for Pre-Medicare Retirees Effective January 1, 2019 through December 31, 2019.
PURPOSE:
To establish the 2019 health and dental insurance monthly rates of contributions for pre-Medicare retirees.
BACKGROUND:
Based on analytic data, the city was advised to separate the premium for pre-Medicare retirees from active employees and Medicare eligible retirees. The pre-Medicare retiree group had a 2.3 M deficit year-end projection. January 1, 2018, the City set separate funding rates for the Pre-65 retirees in order to cover their necessary liabilities under the CIGNA plan.
The premium rates of health and dental insurance for all pre-Medicare retirees and their qualified dependents are adjusted accordingly from the prior year’s rates on the basis of past actual claims experience, projected current loss experience and medical and dental costs associated with the OAP health insurance and dental plan currently offered by the city. The city offers three tiers of insurance for retiree, retiree + 1 and retiree + family coverage. Retirees cost is based on the applicable level of coverage chosen at time of retirement and pursuant to whichever pay plan or collective bargaining agreement is currently in effect.
DISCUSSION:
The pre-65 retiree costs have stabilized due to the changes made last year including adjusting the retirees premium rate and separating out the Medicare retirees to Aetna. In addition the claim is experience was favorable for the 2018 year. Based on these factors, the city will be lowering premium rates 28% for 2019 over 2018 rates.
Retiree dental premiums are the same as for active employees and there is no increase for 2019.
2019 pre-Medicare retiree contribution sheets are attached.
IMPACT STATEMENT:
No Impact
RECOMMENDATIONS:
Place on the Finance Committee calendar for approval to City Council
cc: Alderman O’Connor, Chairman
Alderman Mesiacos
Alderman Bugg
Alderman Mervine, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Establishing Health and Dental Insurance Monthly Rates of Contributions for Pre-Medicare Retirees Effective January 1, 2019 through December 31, 2019.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, (it has been determined that the pre-Medicare retiree rates set forth herein for health and dental insurance premiums represent equitable and reasonable amounts for eligible retiree and dependent participants in the city health plans:)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the attached 2018 City of Aurora medical and dental rates for eligible pre-Medicare retirees and dependents are hereby adopted as attached hereto and made a part hereof as Exhibit “A”.