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TO: Mayor Thomas J. Weisner
FROM: Alisia Lewis, Director of Human Resources
DATE: October 9, 2015
SUBJECT:
A Resolution Establishing PPO and HDHP Health Insurance Plans and Rates Effective January 1, 2016 through December 31, 2016
PURPOSE:
To affirm the 2016 proposal to implement Plan C Prime schedule of benefits and establish the 2016 insurance benefit contribution rates of the city's PPO and HDHP medical insurance.
BACKGROUND:
Several years ago the city implemented Plan C plan design which lowered the cost of health insurance coverage for the city. The city was also able to negotiate a move from a percentage of base pay to percentage of premium for employee contributions with collective bargaining groups. As a result of the most recent negotiations with the unions, the city was able to negotiate some flexibility in making plan design changes with the limitation of not exceeding a 50% increase in overall cost to employees.
Each year the city establishes base premium rates for its self-insured PPO and HDHP plans.
DISCUSSION:
In benchmarking the city's current plan design against comparable plan designs, Plan C Prime brings the city more in line with current practices. Plan C Prime plan design maintains the same service coverage offered in Plan C. The primary changes are reflected in the employee contributions for deductibles, out of network employee cost and prescription cost. Where the city cost to services may be slightly higher than the benchmarking, the overall reduction in premiums of 5.9% to employees more than balances out the increases as well as puts the city in a more favorable position to avoid the upcoming ACA Cadillac tax. Attached is the Proposed 2016 Plan C Prime Schedule of Benefits and current Plan C Schedule of Benefits for comparison. Also attached is the proposed 2016 HDHP benefits schedule. There are no changes from the 2015 HDHP benefits schedule.
The Proposed 2016 PPO and HDHP premium rates reflect the recommendation of the City's new third-party administrator, Cigna. Attached are the PPO rates proposed for 2016 and 2015 rates for comparison.
Also included are the 2016 rates for dental and C.O.B.R.A.
IMPACT STATEMENT:
No impact.
RECOMMENDATIONS:
Placed on the Finance Committee calendar for approval by Finance Committee.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Peters, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Establishing PPO and HDHP Health Insurance Plans and Rates effective January 1, 2016 through December 31, 2016.
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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, on the basis of past actual experience and projected loss experience, that the PPO and HDHP rates set forth herein represent equitable and reasonable amounts for eligible participants in the Plans)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: the attached 2016 City of Aurora PPO and HDHP rates of all plans are hereby adopted as attached hereto and made a part hereof as Exhibit "A".
PASSED AND APPROVED on ______________.
AYES ____ NAYS ____ NOT VOTING ____ ABSENT ____
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Alderman Bohman, Ward 1 Alderman Garza, Ward 2
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Alderman Mesiacos, Ward 3 Alderman Donnell, Ward 4
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Alderman Peters, Ward 5 Alderman Saville, Ward 6
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Alderman Hart-Burns, Ward 7 Alderman Mervine, Ward 8
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Alderman Bugg, Ward 9 Alderman Johnson, Ward 10
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Alderman Irvin, At Large Alderman O’Connor, At Large
ATTEST:
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City Clerk Mayor