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Request for Council Action continued <br />Page 2 <br />November 5, 1999 <br />2000 Non-Union Compensation Adjustment <br />B. Insurance Contribution Adjustment <br />The City generally increases the insurance contribution by an amount sufficient to <br />cover one-half of the average premium increase. For 2000, the determination of the <br />average premium increase is difficult because of three factors. <br />1 <br />3. <br />A very large increase in the family coverage rate of the highest cost <br />option ($120.98 per month). <br />The addition of two new tiers (employee plus spouse and employee <br />plus children) that have reduced costs for some. <br />The addition of a new plan option (Medica Elect) that has held cost <br />increases down for some, and has substantially reduced costs for <br />some. <br />The cost changes from 1999 to 2000 are shown in the table below. <br />LOG IS Renewal Rates for 2000 vs. 1999 Rates <br />Rate Tier 1999 <br />Medica High <br />Option <br />2000 <br />Medica High <br />Option <br />$ Increase <br />(Decrease) <br />2000 <br />Medica Elect <br />Option <br />SIncrease <br />(Decrease) <br />Single $195.26 $225.53 $30.27 $202.23 $6.97 <br />Employee + <br />Spouse <br />$525.98 $524.00 ($1.98)$469.87 ($56.11) <br />Employee + <br />Child(ren) <br />$525.98 $495.00 ($30.98) $443.87 ($82.00) <br />Family $525.98 $646.96 <br />$120.98 $580.13 $54.15 <br />In trying to balance the very large cost increase for some employees with the cost reductions for <br />others, staff is recommending the insurance contribution increase by $25.00 per month for a total <br />contribution of $370.00 per month. It is projected that health insurance costs will have double-digit <br />increases for the next two to three years Making the $25.00 per month increase this year will help <br />the City to keep next year's contribution increase at a reasonable level.