4. Memo - Adjustments for Health Savings ContributionsPage 1 of 2
City of Scandia
14727 209th St. N., Scandia, Minnesota 55073
Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com
DATE: Wednesday, June 1, 2022
FROM: Ken Cammilleri, City Administrator
TO: Honorable Mayor and City Council Members
RE: Consideration and Possible Approval of Budget Amendment to Facilitate
Increases to Family Health Savings Account (HSA) Contributions &
Approval of Changes to HSA Contributions
This year, I have received staff feedback expressing concerns regarding the maximum family out-of-
pocket health insurance cost share. This means the staff must cover $6,000 of up-front medical costs
before they will obtain full coverage under our plan at the lowest cost tiers. Upon inquiry, it was
determined that the City needs to make changes to these contributions to meet required contribution
levels and help employees currently burdened by up front medical costs.
The current 2022 IRS HSA maximum contribution is $7,500 for an individual and $15,000 for a family.
However, the minimum coverage is $1,500 for individual and $3,000 for family coverage. The current
contribution levels are $120/month or $1,440/year for single coverage and $160/month or $1,920/year
for family coverage for Health Savings Accounts (HSAs). (Health insurance premium is 100% for single
individuals and 80% for family coverage.)
It is recommended that the City Council consider approving an increase to family Health Savings
Account Contributions to $6,000 per year or $500 per month for family coverage and $1,500/year or
$125 for single-only coverage, retroactive to the beginning of the year for qualifying non-union staff with
the proposed budget amendment. If approved this change would only affect 4 employees and would cost
$8,280. This cost can be accommodated within this year budget if the following budget amendment is
approved:
(This budget amendment includes changes to accommodate changes to HSA contributions by removing the
second seasonal employee from the budget, which was approximately $8,700, much of the costs of this
change are covered with this amendment leaving only a $1,500 difference. Estimated costs associated with
city premium contributions were approximately $7,200 short of overall the rates approved.
Department Line Item Code
2022
Budget
2022 Proposed
Amendment
%
Change
Admin Health/HSA 101-41000-131 $23,600 $28,900 22.5%
Planning Health/HSA 101-41910-131 $11,400 $14,800 29.8%
Public Works Health/HSA 101-43000-131 $53,600 $54,900 2.4%
Parks and Recreation Health/HSA 101-45000-131 $2,100 $2,500 19.0%
Parks and Recreation Temp Wage 101-45000-104 $29,100 $21,400 -26.5%
Parks and Recreation Medicare 101-45000-122 $2,600 $2,100 -19.2%
Parks and Recreation Medicaid 101-45000-126 $600 $500 -16.7%
Community Center
Health/HSA 101-45180-131 $3,100 $2,500 -19.4%
Total $126,100 $127,600 1.2%
Page 2 of 2
City of Scandia
14727 209th St. N., Scandia, Minnesota 55073
Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com
HSA contributions of this size are not unusual, but the City has neglected to amend these contributions
for several years. Here is a brief break down of neighboring communities and their health insurance
coverage:
CITY OF COLUMBUS
MN PEIP - no HSA
CITY OF LINDSTROM
Health Partners
100% Single Coverage ($2,500 for 2022)
50% Family Coverage ($2,900 of the $5,000 deductible for 2022).
These amounts are put into HSA accounts in January each year.
CITY OF CHISAGO
Health Partners
100% Single Coverage ($7,300 for 2022)
70% Family Coverage ($4,300 for 2022)
City pays 100% of $4,300 for both single and family, and
remaining $3,000 for family is split 70/30
You will also find in your packet a summary of current health savings contributions based on this year’s
non-union health insurance plan through the State’s Public Employees Insurance Program (PEIP) for
your reference and consideration.
Please note that requested total health savings contributions requested would only cover the two lowest
cost levels. Additional costs for higher cost levels would not be covered by the adjustment. At minimum
the Council should at least amend the code to include IRS minimum HSA contributions.
Please let me know if you have any questions.