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MEMORANDUM <br /> To: Mayor and City Council From: Ron Olson, Finance Director Date: April 27, 2020 Subject: Insurance Committee Update <br />Rising insurance costs have been an ongoing issue for many years. During the 2020 <br />budget cycle, the Council directed staff to create an insurance committee in order to <br />explore options for insurance that may result in lower premiums; or at least smaller <br />increases in the future. The committee met earlier this year with representatives from our <br />health insurance agent, Gallagher Benefits Group. They outlined the current insurance <br />environment as well as providing some detailed information on the Public Employees <br />Insurance Plan (PEIP). PEIP is a plan created specificall y for non-state public employees <br />and has become popular with other local governments. <br /> <br />Currently the City part of a group of cities (LOGIS) that joined together as a larger pool <br />in order to obtain more competitive premiums and a greater choice of coverage plans. <br />The LOGIS group worked well for the City for many years. However, recently the <br />LOGIS plan has been experiencing increases exceeding 10% per year. The large <br />increases have negatively impacted both the employees and the City’s budget. For 2021, <br />the projected increase in premiums is 13.1%. This will be a $24,000 increase to the city <br />and annual increases ranging from $600 to $1,320 for employees. The exact amount of <br />the increase will be known around May 15. <br /> <br />The Joint Powers Agreement with LOGIS requires notification be June 15th of this year if <br />the City desires to leave the group in 2021. A decision to leave is permanent. The issue <br />for City is that most insurance carriers will not provide quotes for the 2021 coverage year <br />until after the deadline to leave LOGIS. Staff is requesting direction from the Council on <br />withdrawing from LOGIS for 2021 and proceeding with an RFP for a new health <br />insurance carrier. While we expect that the RFP would result in lower premiums, there is <br />no guarantee that it will. <br /> <br />Exhibits: <br />1. Carrier Quote Availability <br />2. City Insurance Contributions <br /> <br /> <br /> <br /> <br /> <br /> <br />