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11-18-1987 - Special Q o CITY COUNCIL OF EDGEWATER SPECIAL MEETING NOVEMBER 18, 1987 MINUTES Mayor Earl Baugh called the meeting to order at 7:03 P.M. in the Community Center. He stated the purpose of the meeting was to make a decision regarding the increase in group insurance rates. ROLL CALL Mayor Earl Baugh Councilman Louis Rotundo Councilman Russell Prater Councilman Neil Asting Present Present Present Present Councilman David Mitchum City Attorney Jose'Alvarez City Clerk Connie Martinez Chief Lawrence Schumaker Absent Excused Present Present Also present was Mr. Jack Ascherl, the City's agent of record, and Mrs. Mary Ann Vendrasco, Payroll/Personnel/Insurance Clerk. Councilman Asting moved they excuse the Chief. With no objection heard from Council, Mayor Baugh stated that a motion was not needed. Chief Schumaker left the meeting at 7:05 P.M. Mr. Ascherl pointed out they've been with Bankers and then Principal for a number of years and have a very competitive plan and extra good benefits. He noted they had no increases in 1984 and 1985 and had a decrease of 8% in 1986, but this year the City paid $126,364 in premiums and $212,116 in claims were paid out. He said this group plan is not totally experience rated but to a great extent. Mr. Ascherl presented an alternate package and then reviewed the current rates compared to the rates effective 12/1/87 and alternate rates. He noted that if they leave the plan as it is, it would be $81.16 on the health, which is a 36% rate increase. He reviewed the rates for dependents. He pointed out that dental and prescription drug goes down a little because they had good experience with it. He reviewed that they could bill on a monthly basis for claims paid each month up to the ~ximum they would have paid on the insured plan except there would be an administrative cost which would make it 110% of what they would have paid on the insured plan, or 10% more. He pointed out there would be some cash flow that would benefit the City with that method with interest earned and a reduction in premium tax. City Clerk Martinez asked if would be a variablp. monthly charge and Mr. Ascherl replied they take the rate for a maximum premiurll and then they are billed the administrative costs plus any claims they would have up to the maximum and then if it's less than they have that month, the amount could go as a carryover to the next month. He pointed out that at the end of the year they can't pay more than 110% of what they would have paid. City Clerk Martinez noted that could be a good idea if they paid the premium 100% but it's deducted from the pay checks and it would be a bookkeeping problem. Mr. Ascherl then stated that the alternate plan is if they change the benefits and then the premiums would be $59.13 which is a small increase over the $54.84. Mr. Ascherl stated they have $150 deductible per individal for hospital and it would apply only to those going into the hospital. He noted that everything else is $150 per calendar year, and they currently have $100 deductible in the plan. Councilman Prater asked if he's saying $300 if you go into the hospital and Mr. Ascherl replied if they don't have any other bills for the year. Councilman Prater asked if outpatient is $150 and Mr. Ascherl replied yes. Mr. Ascherl said after the deductible, it pays 80% of covered charges and out of pocket for each individual is $2,000, which includes the deductible and the 20%. He added that it's at $500 now. He said the family is currently at $1,000 and the proposed would be $4,000. He pointed out the deductible is maximum of two per family. Councilman Prater asked if they'll combine the medical and dental and Mr. Ascherl replied no, they have a separate dental, and when the deductible and 20% the individual pays reaches $2,000., then it's 100% coverage for the rest of the year. o o Mr. Ascherl stated that he can check to see if they can adjust the out of pocket limits to $1,000-$2,000 or $1,500-$3,000. He reviewed some of the plan's features. He stated there's a health information line that's toll free for benefit advice and any questions on the plan. He said they also have pre-admission certification and the individual calls the number with the information, then the company will follow through and do an automatic follow up through the hospital and then through the doctor, if necessary. He noted this is for elective surgery in most cases, but if it's an emergency situation, they ask to be called within two days. He noted they have a pre-surgery review and they'd like to have a second opinion on some of these. He pointed out that the second opinion is 100% and they'll even pay 100% for the third doctor. Mr. Ascherl read the cost containment provisions and noted that all the larger employers in this area are under cost containment measures and the doctors are familiar with the requirement. He said he hasn't heard of one complaint of these cost containment plans. He suggested they consider the cost containment package as it's a way of controlling the health benefit costs and they will cut some of the rates. Mayor Baugh asked if the rates would reflect if it would be a good year and Mr. Ascherl replied yes, it would depend on the experi- ence. Mayor Baugh noted he had an experience with it this year and only had to pay $500. Councilman Asting asked the increase over the existing plan and Mr. Ascherl replied it's 36%. Mayor Baugh asked the difference it they reduce the deductible to $1,000 and Mr. Ascherl replied he doesn't have that figure, and noted they could go to a $200 deductible and $1,000 limit. He suggested they could go to a cost containment and keep the existing plan. City Clerk Martinez pointed out that $2,000 is a lot out of pocket for some employees. There was discussion about how it could be adjusted. City Clerk Martinez pointed out it's effective December 1, 1987, and they added 10% in this year's budget. Mayor Baugh noted they're now looking at ten months rather than twelve. Councilman Rotundo asked if he suggests the City stay Ascherl replied yes as the company treats them right. can't get the coverage from any other company. Mr. Ascherl stated that since 10% increase is planned, he could work up numbers to come up with about a $70 figure. He asked if they want to take the alternate and go from $2,000-$4,000 to $1,000-$2,000 and Mayor Baugh replied yes. Mayor Baugh asked what deductible he suggests and Mr. Ascherl replied he'd increase $50 and they could have a flat $200 deductible for everyone. Mr. Ascherl noted there's a supplemental accident on the old plan. Mayor Baugh said that with the 10% they budgeted and the two months at the lower rate, they could go up. City Clerk Martinez said it would be pretty close, but they don't know the actual costs. Mrs. Vendrasco said she needs a figure because she won't know what to charge the employees and she needs to give them a notice. Mr. Ascherl advised her he'd get that. Mr. Ascherl said he'd try to get the $200 deductible and out of pocket of $1,000- $2,000 to reduce the cost and will add the cost containment features to it also, and if it's in the range, he'll leave the accidental in there. Mrs. Vendrasco noted that she didn't think they'd had one this year. with Principal and Mr. Mayor Baugh stated they Mayor Baugh suggested a motion to increase the deductible from $100 to $200 combined and out of pocket from $500 to $1,000 with $2,000 for family. Mr. Ascherl pointed out he may not be able to get it together as they want and it would help if they could authorize City Clerk Martinez to make the last minute decisions, or the Council. Councilman Rotundo stated that would be his motion. Councilman Prater asked what he'd do if he can't get it together and Mr. Ascherl replied they may have to substitute the deductible arrangement. Mayor Baugh asked that he be advised and he'll get a note to Council. Councilman Asting seconded the motion. During the roll call, Councilman Asting asked if this will come back to City Clerk Martinez and Mayor Baugh replied back to him or her. Mayor Baugh asked Mr. Ascherl if foresees any problems and Mr. Ascherl replied no. Roll call continued and motion CARRIED 4-0. -2- Council Special Meeting Minutes November 18, 1987 (.) Q Mrs. Vendrasco asked if they'll continue with what they have this month if she doesn't get the figures and Mr. Ascherl replied yes, and they can tell them and back date it to the first of the month. Mayor Baugh asked if he'll be advised the next day and Mr. Ascherl replied yes. Mr. Ascherl asked about the letters coming back for the retirees on the plan and Mrs. Vendrasco replied she's waiting for City Attorney Alvarez for the interpretation of the Florida Statutes, and she's spoken to Jack Row. Mr. Ascherl stated it's the person retired under the pension plan. Mayor Baugh advised he'll call the City Attorney the next day. Mr. Ascherl noted there are only a few people and they can come back in and participate like any other employee under the group plan and their dependents at the same rate. He referred to a $1.00 a month supplement for each year of service and Mrs. Vendrasco pointed out we don't have the State pension plan. Mr. Ascherl said he'll get back with Mrs. Vendrasco about the retirees and the $1.00. Mayor Baugh then requested a motion to adjourn. Councilman Prater so moved. Councilman Rotundo seconded the motion. Meeting was adjourned at 7:53 P.M. Minutes submitted by: Lura Sue Koser ATTEST: eL~~ CITY CLERK . Approved this 7th day of December ,198~. 7r/~g. ~~fi COliNCr N ZON~ CO NCILMAN - ZONE FOUR -P ~ -:r --Z-f ~-t / ft""P J:::-=> PV MklOR -3- Council Special Meeting Minutes November 18, 1987