Memo - Health Insurance
Staff Report
Date of Meeting: August 18, 2020
To: City Council
From: Finance Team
Re: Health Insurance and other coverages
Background: The City provides Health Insurance coverage to its full-time employees through a
combination of a Union plan for three Public Works members and Health Partners for three
administrative staff that includes the Public Works Director. An additional existing benefit to the full-
time staff is Disability Income Insurance. All staff members, except the Fire Chief, receive Life Insurance
coverage as well.
Issue: Health Insurance coverage is an ever-increasing cost of compensation for eligible employees.
Staff has investigated other Health Insurance plans to see if costs could be reduced, as well as the cost
of adding Dental Insurance to eligible employees. The Council may also want to consider providing Life
and Disability insurance to eligible part-time employees.
Proposal Details: The Finance Team is proposing a new health plan through PEIP Advantage HSA for a
significant savings. In addition, the Council may wish to consider offering Dental coverage to its full-
time employees, as well as Life Insurance to the Fire Chief, since he is the only employee not receiving
this benefit. Details and costs are attached for existing and new plans are attached.
Fiscal Impact: Staying with the current plan will increase premiums by $439.80. Changing to the PEIP
Advantage HSA plan will reduce premiums by $9,480.22. Adding Dental coverage paid 100% by the City
for three full-time staff would cost $3,927.48. Other options where the City pays a portion of Dental
are less. Adding Disability Coverage to three part-time staff increase costs by $1,754.40. Adding the
Fire Chief to the Life Insurance plan would increase costs by $128. A detailed breakdown of premiums
is attached.
Options:
1. Keep existing health insurance plan at an increased cost of $439.80.
2. Change health insurance plan to PEIP Advantage HSA for a savings of $9,480.22.
3. Change health insurance plan to PEIP Advantage HSA for a savings of $9,480.22, and additional
coverages such as Dental for full-time Administrative staff, and Disability and Life Insurance for all part-
time staff.
Recommendation: Option 2, or Option 3 with some combination of additional coverages.