Memorandum 16-183 Employee Health Insurance for 2017

Memorandum 16-183

TO:                       MAYOR ZAK AND CITY COUNCIL

THRU:                 KATIE KOESTER, CITY MANAGER

FROM:                 ANDREA BROWNING, PERSONNEL DIRECTOR

DATE:                  NOVEMBER 21, 2016

SUBJECT:         2017 EMPLOYEE HEALTH INSURANCE

Wells Fargo Insurance solicited proposals on behalf of the City of Homer for Health Insurance for the upcoming year.  Wells Fargo received bids from: Premera, Aetna, and United Healthcare for medical coverage– as well as quotes from: Assurant Health, Guardian, and Standard on Dental, and Assurant Health on Vision, as well as a renewal quote from Prudential on Life Insurance.  Other dental and vision providers were solicited, but declined to quote.

All of the proposals were reviewed in detail.  The Aetna bid was not competitive.  The United Healthcare of Alaska bid came in very competitive, but was still higher than the final Premera bid, and as such was eliminated.  Additionally, Premera has a very good network of providers and, employees have been happy with their coverage.

Brandon Nyberg and Beth Olszak of Wells Fargo Insurance had a conference call with the Employee Committee, the Finance Director, and HR Director, and various options were discussed. 

In the end, it was determined that the best option for the City moving forward is to keep our Health, Vision & Dental coverage broken apart.  Premera will remain our Health Insurance provider, but Assurant Health will provide our Vision & Dental coverage.  We will remain with Prudential for Life Insurance.

By separating out the plans, this minimizes the premium change to a 10.4% increase.  Because we budgeted in for a 20% increase, this translates to coming in well under-budget- resulting in pulling approximately $160,000 less from the Health Insurance fund.

RECOMMENDATION:

Adopt Resolution 16-120 to approve a new one-year contract with Premera Blue Cross, Assurant Health, and Prudential for employee health and life insurance for 2017.