HomeMy Public PortalAboutAB 16-232 Employee Benefits UpdateMcCALL CITY COUNCIL 216 East Park Street
AGENDA BILL McCall, Idaho 83638
Number AB 16-232
Meeting Date September 22, 2016
AGENDA ITEM INFORMATION
SUBJECT:
Employee Benefit Update
Department Approvals
Initials
Originator
or
Supporter
Mayor / Council
City Manager
Clerk
Treasurer
Community Development
Police Department
Public Works
Golf Course
COST IMPACT:
Parks and Recreation
FUNDING SOURCE:
Airport
Library
TIMELINE:
Information Systems
Human Resources
TM
Originator
SUMMARY STATEMENT:
Due to current regulations imposed by the Idaho Department of Insurance, Cigna is not able to offer a level-funded plan to a municipality located in Idaho without doing some additional
filings. Cigna just became aware of the restrictions when they attempted to file our plan documents with the Idaho Department of Insurance late last week, and there is not sufficient
time to get the additional fillings completed by October 01, 2016. Based on conversations with Cigna, our broker, the Idaho Department of Insurance and staff; Cigna has revised the
plan type from level-funded to fully insured in order to comply with current state regulations. The change did not result in any changes to the benefit level for members, or the cost
to either the City of McCall or employees with this switch.
Cigna is actively working with the Idaho Department of Insurance to complete all requirements to offer a level-funded plan in the future. Our hope is that the authorization from the
Department of Insurance will be in place by January 01, 2017. If the level-funding option is approved by the Department of Insurance by January 01, 2017, our intent would be to convert
our fully-insured plan to a level-funded plan on January 01, 2017. If the authorization is not in place by January 01, 2017, our coverage would remain in place as a fully-insured plan.
Changing to from fully-insured to level-funded on the calendar year will likely improve the performance of the level-funded option. There is no risk to the City with a fully-insured
plan, it is the same type of plan we have had in the past. If we remain fully-insured for the entire plan year, we would not have the ability to share in the direct savings potentially
realized by lower than expected claims. If we are able to convert to a level-funded plan on January 01, 2017, we would have a nine month plan and would be eligible to share the direct
savings if the claims utilization is lower than anticipated for that nine month period.
RECOMMENDED ACTION:
Approve the fully-insured Cigna plan design, effective October 1st 2016, and authorize the Human Resources Manager to sign all necessary documents.
RECORD OF COUNCIL ACTION
MEETING DATE
ACTION