08-27-1990 Council Packet - Laserfiche WebLink

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82190.1 TO: Mayor and City Council FROM: Mark E. Bernhardson, City Administrator DATS: August 21, 1990 SUBJECT: Flexible Benefits COUNCIL MEETING AUG 27 1990 CITY OF ORONO Attachment; A. Flexible Benefits Memo Dated 5/2/90 B. Table of Vendors ISSUE 1. Determine if Council desires to undertake a flexible benefits program. 2. Selection of a vendor. INTRODUCTION - As noted in Attachment A a flexible benefits program can be an aid to both the City and the staff by allowing a savings through pre-tax deferrals of income. It is estimated at an average participation level the City would save approximately $5,000 a year less any cost for administration. The estimated savings for the employees would be about a total given average participation of $10-25,000 depending upon their tax bracket. At the Council’s May 7, 1990 Council meeting they directed staff to seek other vendors. DISCUSSION - Issue #1 Vendors - While there are several vendors in the area the City contacted ones that had done primarily work v’lth other cities. In addition to other vendors, one with an insurance company and another that was trying to market the cities but had not done work for them, had requested the abilities to present proposals. The insurance company approach, while potentially saving money, does allow those companies access to employees to sell products. In time such may cause people to shy away from participating in the program and in addition could consume substantial amounts of the employee's time while they are being marketed. Type of Plans - The three primary areas that each of the plans offer are as follows: Health Premium - This allows the employee to defer salary to pay the difference between the City's portion of the family coverage and the cost of the coverage. In addition to the e/,ent insurance programs are allowed under the plan persons could defer premiums for those.