TITLE
Recommendation to authorize City Manager, or designee, to execute contracts with Anthem Blue Cross, the City’s Third Party Administrator for the Preferred Provider Organization (PPO) and the Health Maintenance Organization (HMO) group health plans and Medicare Supplement plan; UnitedHealthcare Medicare Advantage PPO Plan; Scan Health Plan for the Medicare Advantage Plan; and Vision Service Plan (VSP) for the City’s vision plan; authorize the renewal of contracts with CVS Caremark as the Prescription Benefit Manager (PBM) for the Prescription Drug Plan for the PPO and HMO plans; Delta Dental for the fee-for-service dental plan (DPPO) and Delta Dental USA (HMO plan); The Standard Insurance Company for life insurance short- and long-term disability; Union Mutual Life Insurance Company (UNUM) through Larry Lambert & Associates Insurance Services for long-term care insurance; and any subsequent amendments necessary to maintain current benefit levels and remain in compliance with state and federal laws on all plans, at the discretion of the City Manager. (Citywide)
DISCUSSION
In accordance with the Memoranda of Understanding (MOU) between the City of Long Beach and its employee organizations, the Health Insurance Advisory Committee (HIAC), comprised of representatives from each of the employee associations, has met and submitted its recommendations (Attachment A) for the 2017 Plan Year. In addition, as part of the evaluation process, the City used Alliant Employee Benefits Consulting (Alliant) to analyze the plan design and rate structure for the 2017 Plan Year. Alliant is an industry leader in employee benefit programs and has hundreds of public and private sector clients.
HIAC and Human Resources staff have recommended the following changes to the City’s current plan be approved for the 2017 Plan Year, from January 1, 2017 to December 31, 2017, for active and retired employees:
§ Implement three tier levels (single, two-party and family) for active employees on an unpaid leave of absence
§ Implement three tier levels (single, two-party and family) for retired employees;
§ Implement CVS Caremark as the Pharmacy Benefit Manager for Anthem Blue Cross HMO members; and,
§ Implement Vision Service Plan (VSP) as the vision provider.
There are no material plan design changes for the 2017 Plan Year for dental (HMO and PPO); employer-paid and voluntary life insurance; short- and long-term disability; and/or the long-term care insurance plans for 2017.
Attachment A (Exhibit B) reflects minor rate plan adjustments to the medical, dental (HMO plan) and vision plans, resulting in a slight decrease to the employees’ cost share for 2017.
This matter was reviewed by Principal Deputy City Attorney Gary Anderson on August 10, 2016 and by Assistant Finance Director Lea Eriksen on August 11, 2016.
TIMING CONSIDERATIONS
Human Resources is planning to utilize the month of September to communicate open enrollment changes to employees, who will update their health plan options online. Therefore, City Council action is requested on August 23, 2016, for adequate open enrollment planning.
FISCAL IMPACT
Due to going out to the market for health care plans for the RFP process described in the companion City Council letter, and the recommended plan design and provider changes, it is anticipated that the City’s cost of the health benefit plans will decrease in 2017 and not increase with industry trend. There is sufficient appropriation for the City’s cost of the health benefit plans in the Proposed Fiscal Year 2017 budget in the Employee Benefits Fund (IS 391) in the Citywide Activities Department (XC). The award of these contracts will provide continued health coverage for approximately 4,000 active City of Long Beach employees at no net change in cost. There is no local job impact associated with this recommendation.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
ALEJANDRINA BASQUEZ,
DIRECTOR OF HUMAN RESOURCES
APPROVED:
PATRICK H. WEST
CITY MANAGER