08-26-2013 Council Work Session Packet

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1'1 �� C�� w�� \ Current Insurance Contribution Uses: The ability of employees to receive a portion of the City's insurance contribution as cash has been an area of concern for a number of budgets. In order to help the Council make this decision the following enrollment forms have been included to help you understand how employee use the contribution. In the first example, the employee has elected single health insurance coverage. The employee has also chosen to use some of the remaining contribution to purchase long and short term disability and supplemental life insurance. The remaining amount will be contributed by the employee to their deferred compensation plan. In the second and third example, the employees use the entire amount of the contribution to purchase insurance. One employee selects single health insurance and purchases dental, disability and life insurance. The employee also uses some of the contribution to fund an HSA to help cover insurance deductibles. All of the City's health plans are high deductible plans ($2,500 single, $5,000 family). The third employee has family health coverage. The cost of family coverage exceeds the City Contribution. As the Council is aware, approximately one-third of our employees waive coverage altogether; electing instead to receive a portion of the City's insurance contribution as cash. The City can choose to eliminate the remove the ability to receive cash. The Council would need to decide if options like funding an HSA or a flexible spending account (Medical or Dependent Care) would still be an allowed use of the contribution. These are not insurances, but are valued by the employees that use them.