CC - Item 5B - Report on Proposed Costs Savings and Enhancements to Non-Medical Employee BenefitsROSEMEAD CITY COUNCIL
STAFF REPORT
TO:
THE HONORABLE MAYOR AND CITY COUNCIL
FROM:
BEN KIM, CITY MANAGER
DATE:
SEPTEMBER 12, 2023
SUBJECT: REPORT ON PROPOSED COSTS SAVINGS AND ENHANCEMENTS TO
NON-MEDICAL EMPLOYEE BENEFITS
SUMMARY
Earlier this year, the City contracted with Keenan & Associates ("Keenan") to review the City's
comprehensive non-medical benefits to ensure that City employees are receiving the best value
for their benefits, with the goal of lowering costs, expanding benefits, or both. Keenan has
completed the marketing of the City's plans and based on the proposals received, this report
provides a summary of the changes being implemented for the 2024 open enrollment period.
This report includes plan and cost information for dental, vision, life and disability, employee
assistance programs, as well as new offerings for additional voluntary benefits for pet insurance
and long-term care insurance at no cost to the City.
Below is a summary of plan changes for various non-medical benefits offered by the City. The
information includes the current rate and the proposed new rate for 2024, along with any benefits
changes and cost savings to the City or employee.
Dental Plan:
The City currently contracts with Ameritas for employee dental benefits. The current two-tiered
rate structure was changed to a three -tiered rate structure to better align with other benefits
offered by the City. The City received several proposals from other providers but elected to
remain with Ameritas so that there would be no change in the network for current dental
providers.
Employee Only 37 S70=0 S 6 3 M.
Employee+ Dependents 13 5171.7E $134.72
Employ"-Famdy 10 5:7:.76 5169.42
Monthly Premium 56,555.28 $5.789.88
Annual Premium S78,663.36 569,478.56
AGENDA ITEM 5.13
City Council Meeting
September 12, 2023
Page 2 of 8
Based on the negotiated rates provided, the employee only plan is reduced from $70.40 to $63.36
per month; the employee + dependent plan is new the new tier being offered, and the rate is
reduced from $171.76 to $134.72 per month; and the employee + family plan is reduced from
$171.76 to $169.42 per month. Based on the current number of subscribers at each plan type, the
average total savings per year is $9,184.80 or approximately -11.68% to employees on an annual
basis.
Vision Plan:
The City currently contracts vision plan services through VSP directly; however, during the
marketing process, Ameritas offered the same vision plan through VSP at a discounted rate
which results in significant cost savings for employees. Additionally, the City was able to
negotiate a higher frame allowance from the current rate of $150 to $180. Based on the new rates
through Ameritas VSP, the employee only plan is reduced from $17.09 to $11.36 per month; the
employee + dependent plan is reduced from $26.55 to $20.44 per month; and the employee +
family plan is reduced from $42.11 to $29.24 per month. Based on the current number of
subscribers at each plan type, the average total savings per year is $3,678.84 or approximately -
29.05% to employees on an annual basis.
Employee Only
16 $17.09
$15.38
$11.36
Employee + 1
12 $26.55
$23.90
$20.44
Employee + 2
11 $42.11
$37.90
$29.24
Monthly Premium
$1,054.25
$948.78
$748.68
Annual Premium
$12,663.00
$11,397.36
$8.984.16
Group Life and Accidental Death & Dismemberment (AD&D) Insurance:
The City currently contracts with Principal Financial for its group life and AD&D insurance. The
benefit is $100,000 per employee. Based on the City's marketing of its plan and the current
census of employees, Lincoln Group Life offered a significant discount over Principal's revised
rates. Since this is a city paid benefit at no cost to the employee, annual premium costs are
reduced from $24,804.38 to $12,002.12 per year, a -51.61% cost savings to the City.
Group Life Volume
$5,129,110
$5.129.110
$5.129,110
Premium Rate (Basic Life) per $1,000
$0.357
$0.293
$0.170
Premium Rate (AD&D) per $1,000
$0.046
$0.046
$0.025
Monthly Premium
$2.D67.03
$1.738.77
$1.000.18
Annual Premium
$24.804.38
$20.865.22
$12.002.12
City Council Meeting
September 12, 2023
Page 3 of 8
Short & Long -Term Disability
The City currently contracts with Principal Life for short and long-term disability coverage.
Based on the City's marketing of its plan, Lincoln Group Life offered a significant discount over
Principal's revised rates. In addition to the cost savings, the maximum benefit allowance was
increased to cover all salaries at 66.67%. For example, the current weekly rate for short-term
disability is increasing from $1,848 to $2,400 per week and the currently month rate for long-
term disability is increasing from $8,000 per month to $10,400. Even with these enhanced
benefits, the City's annual premium is reduced from $55,168.17 to $32,047.95, a $23,120.22 or -
41.91% annual savings to the City.
Total Monthly Premium
Total Annual Premium
Employee Assistance Program (EAP):
The City currently contracts with Magellan, a subcontract for Principal Life, for its Employee
Assistance Program (EAP), which provides mental health and other counseling to employees.
The current number of visits allowed per incident is three (3) at no cost to the City. Lincoln
Group Life is offering six (6) visits per incidents for an annual premium of $1,382.40. Based on
the overall costs, this is a nominal cost to the City for 100% increase in the benefit.
Monthly Premium 60 $0.00 $115.20
Annual Premium $0.00 $1.382.40
Overall Summary of Plan Changes:
Based on the information provided, the total cost of all annual City or employee paid premiums
for dental, vision, group life, short and long-term disability, and the employee assistance
program will decrease from a current annual total of $171,298.91 to $128,924.72, resulting a
total annual savings of $42,374.19 or -24.74% as shown in the chart below. These plan changes
will take effect beginning January 1, 2024, and additional outreach and plan materials will be
provided to all employees during the benefits fair sponsored by Keenan on September 14, 2023.
Additionally, staff will be able to meet one on one with a benefits advisor during the open
enrollment period to ask any questions about the plans, benefits, and other questions they may
have about the open enrollment process in further of the City's continued commitment to attract
and retain a highly skilled and qualified workforce.
City Council Meeting
September 12, 2023
Page 4 of 8
Effective: 1/1/2024
Dental PPO
Vision
Group Lite/AD&D
Short -Term Disability
Long -Term Disability
EAP
Monthly Premium
Annual Premium
%Change Over Current
$ Change Over Current
9'o Change Over Renewal
$ Change Over Renewal
Ameritas (DPPO) Ameritas (DPPO) Ameritas (DPPO)
VSP (Vision) VSP (Vision) Ameritas VSP (Vision)
Principal (GL/Dis/EAP) Principal (GL/Dis/EAP) Lincoln (GL/Dis/EAP)
$
6 59528
$ ---
5 789 88
$
-------5-78-9.88
105525
$
94978
$
74866
$
2067 03_
$
...$._
.. 1.000.18
$
....
1.83133
_
$
_.-,-,.f,73-8-77-
153436
$.....
_ 1.34343....
$
_..
2.761.602
$
_-_-___276602....-._$__.....
_.-_ 1.74637
$
._.
.
$
�
$
115.20
$
14,274.91
$
12,778.80
$
10,743.73
$
171,298.91
$
-153345.54---$...
--128924.72-
New Voluntary Benefit Offerings:
The new voluntary benefit offerings are services that the City will be able to provide to
employees at a discounted group rate that are paid for by the employee through a payroll
deduction. The following offerings can help provide employees with additional financial safety
and lifestyle benefits.
Supplemental Life and Critical Illness Coverage:
The City will implement new Madison National Life voluntary coverages — accident, critical
illness and hospital indemnity plans that employees can select from. The accident coverage
offers two different plans to choose from and each pay fixed indemnity benefits for accidental
injuries and can provide financial help when the unexpected happens. Employee plans begin
from $17.91 a month for the Accident Basic Plan or $23.49 a month for the Accident Enhanced
Plan. There are also plan options available that include spouses, children, and family.
Madison National Life's critical illness coverage offers three options to choose from, each
paying a lump sum payment upon the diagnosis of a covered condition, most of which are
covered 100%, directly to the insured. The pricing of the plan is determined by the plan option
chosen and by the employee's age.
The hospital indemnity plan offered may be of great assistance in helping employees handle
hospital bills and additional expenses that may come up from spending time at the hospital. This
plan provides benefits with hospital admission, confinement, Intensive Care Unit, air ambulance,
and ground ambulance. This plan offers employees competitive monthly rates that begin from
$4.30 for an employee, $8.60 for employee and spouse, $7.06 for employee and children, and
$11.58 for employee and family.
City Council Meeting
September 12, 2023
Page 5 of 8
Carrier Name Madison National Life Madison National Life
-..__
Plan Name Accident Bas r Arc nem ErDanced
Accident Emergency Treatment
$25Urriat I My., �
$25 .t 1 pet roar
Folmw up wsrt
fsa:;em;wm4wm
fSaMui.wroawab
Accidental Death
55.000 units for spouses
(515k max)
Go,nmon carrier
SSGk FFBC S25L (00d
SIGGk FF/6p S401, Child
r her hcc dent
$23k FESP5125k C10d
SSOk Chid
FW
�snte nDer.mer•�
f2
---
of$2D0kk
525kwm$20---------- ----
Health Screening_
---- -
__
_,
HoSpilal Admission
3500, 1 po 12 mmlhs
SI.000, 1 per 12 nwltlu
Hospital Confinement
$150(day (upm365 bri)
f23Grdry (w to 365 days)
Inlensire Care Unit Admission
5300 (upro 30 hys)
$SOWday (w--�?M)
Medical Imaging _.
_._...._. _
_._
MRI, CT, GAT, PET, (:S
$250
$2W
%Rey
--Transportation
5230
$100
Benefits
f
55.19
Ttansportation(Ambulance)
$300 Grand$2Nair
$300Gua d $Ik Ar __ -----
Family Member Lodging &.Meals
$100
$100
Treatment
___......_.—.—_.
fi064
-
Outpatient or Surgical Center
3200 Surgwy, $IN ohm 1. year
5400 Surgery. $100 ogu la year
Anesthesia
$50
$IIx)
Tawbyas
$17.91
$23.49
Frllplgea 85pauea
$2547
$3161
FaryHoys ACNtl(ren)
$2835
53690
Fiwlyin-farm-
$3591
54482
r. -u , s
Carrier Name Madison National Life Madison National Life Madison National Life_
rrei-i ilimozs .n.ira Ilness 2 Critical Illness 3
Benefit Amoums S5.000 units to
S10.000 ..Is for
35.000 units for
Employess($15a mazy
Employees Y30k maiq.
Employers(S15k
$5,000 unite fu Spouses 530 000 units M
55.000 units for spouses
(515k max)
Spouses (Mk max)
(1151, max)
Guariame Issue Maxkman bus aga h
Maximum haus age h
xh
Manm uIssue age Is
Cancer (lotemal o II
NDII-nVaS;Ve CBIICBI
1629
$
3.95
S
6.03
$
7.40
938
_1127....1_]3034
—3639
__..
.
.f
..._.f__
.17
4044.1
17
S
1928
S
26.58
5
15 18
1
27.99
$
3937
5054
$
2135
S
38.68
f
55.19
5559
$
2675
$
49.19
f
70.85
..
___......_.—.—_.
fi064
-
3068
$
_.._........
5].03
"----__._.
fi5a
....i_385fi
t
]2.46
f
30564
City Council Meeting
September 12, 2023
Page 6 of 8
Carrier Name
Plan Name
Hospital Admission
_... _.. _.. _ _.....................
Hospital Confinement
Intensive Care Unit
Air Ambulance
......................................................... _.... _...... _.
Ground Ambulance
Madison National Llle
$100, 1 day/person
$100/day, up to Iday/person
$600/day, up to 30 days/pers,
....
..............
.................................... . ...........
$300 per day / 1 day per year
$100 per day /1 day per
Employee .. _ . ._.._........................
$4.30
....... _.... .. . ... ........., ... ..........................
.................. ......._........... .........
Employee & spouse ........ ..... _.._
$8.60
... _..__..._..._.... _..... ..._.............................................. _.... ........... ...... ............,..... .
.........._........................_.........._.........................__.._.._..._.................
Employee & Child(ren)
$7.06
Employee & Family
$11.58
The City will offer Nationwide Pet insurance as a voluntary plan option. This pet
coverage is offered through the City to employees at preferred pricing and with a choice
of either a 50% or 70% reimbursement level to get cash back on eligible veterinarian
bills. It can be used at any veterinarian and there are no pre -approvals needed.
This pet insurance offers coverage for accidents, illnesses, and wellness. For accidents
there is coverage for emergency care, broken bones, sprains, lacerations and poisoning.
Coverage for illnesses includes medical care, including allergies, ear infections, arthritis
and cancer. Regarding pet wellness, there is coverage for preventative care, including
checkups, vaccinations, and flea/tick prevention.
Our popular My Pet Protection' pet insurance plans now feature more choices
and more flexibility
OGet cash back m MWle M b•e: Choose Year r•imeursemwa k 1 of 5014W 7016'
OAvaeade exclusyety fer wrp4owac p w prefen•d pnc1W oMy ofhrea tMplph your corriperry
OUse arty vet, anywhere: W ratworks. no pn`.p k
Choose your level
of coverage with
My Pet Protection`
50 ��
reimbursement
520-535/month'
City Council Meeting
September 12, 2023
Page 7 of 8
Rates for California
• Dog - $43.68 a month for 70% reimbursement and $32.76 a month for 50%
reimbursement.
• Cat - $26.21 a month for 70% reimbursement and $19.66 a month for 50%
reimbursement.
2. The City will implement a benefit administration platform called Wise Benefits that will
assist Human Resources with benefit administration and allow employees access to their
benefit information 24 hours a day, 7 days a week. Horace Man Enrollment Counselors
will meet with Employees to provide education on all benefit options and assist them
with enrollment through the Wise Benefits platform.
Education/Enrollment Options
Making sure your employees truly understand and appreciate the benefits you providet
�AD
1� J.�� ...�i
3. The city will change from the current P & A Section 125 plan vendor to a new vendor at
no cost. This plan allows employees to pre-tax payroll deductions and healthcare/daycare
expenses.
STAFF RECOMMENDATION
It is recommended that the City Council receive and file this report.
City Council Meeting
September 12, 2023
Page 8 of 8
FISCAL IMPACT
The following are the annual premium savings per each benefit change:
1. Ameritas dental PPO- $9,184.00
2. Ameritas VSP- $3,678.00
3. Lincoln Insurance- $12,802.00
4. Disability coverage through Lincoln Insurance- $23,120.00
The total annual premium savings is $42,374.00
STRATEGIC PLAN IMPACT
None.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Prepared by:
licia C. Ramirez
Human Resources Manager
Attachment A: PowerPoint Presentation
Attachment A
PowerPoint Presentation
N
W
Q
Z
Q
V
z
rL
LL
�
LLI
Z
W
CO
Z
J
a
O
N
Z
Z
v
O
OW
v
N
LLJ
a
U
Y
>
V
v
Z
N
Q
V
O
N
W
m
C
O
V
O
U
W
CL
uj
V1
C
C
YC
�
3
W
z
rL
El
o = 1� . , . I� . . ,
j 0CL
-
CL
7
u E
g2£
k
2
J
\ \ cL
E } {
/
)`7
_\$
\
-E
§
bo
J 0
{
7
2 w
=
!
/ik
k
MO
0
MO
%
{\j
u/
5
ai
.
\\\
_
//� �}
El
o = 1� . , . I� . . ,
w >-
> oC
H Q
w
X D
w cn
N
yN
O
O
Z
C
a
V
Q
V
W
m
y
O
Q
C
R
C
a
a
Y
D
O
N
^
i
N
Q
;
C�
C
>
N
0
Q
a)
aJ
++
a-+
�
O
�i—
N
O
�+
U
NO
-C
a)
:3
t
E
v
o
4-1
`°
aJ
a)
c
v
t
N
?
O
+-+
O
c
O
coo
Q
O
n3
v�
O
E
+'
j
a +
4.
aJ
O
U
4N
Q
>
CL
>
O
N
}'
v
Q
U
E
(B
L
Q
a)
In
Q
bn
4-1
E
O
0
O
O
-O
E
4-a
cL0
-O
-0
=3
E
O
>
a1
oA
>
>
OL
Q
O
O
Q
O
0
w
d
a
�
a
Q
O i
Op
M
N
O
3
N
C
ry O
O
0
N
C
w ;
3
C
O
a o
a
0
^
£
g
m
u
a v
v
d
_V>
d
AA
N
O
a a
W
CL
C
b
Y
a)
Q
O i
Op
N
(f� N
O
3
N
O -
O
0
a
->
;
o c
o-
Q
01
;
m
3 v
o
c
p�
^
y v
ro
CL
f6
0
`r
K O
d
a
N
O i
Op
M
O
n a
cu LL
OD
o
N
N
LL �
d
O
N
� j
N z:!m
001 w
^
O
0
f6
0
C
K O
d
N
M
` "O
n a
cu LL
OD
o
No
N
v�
coo O
O
C
>.
-00
N z:!m
001 w
y
£"O
0
f6
d
>' 00 a
CL
a O`
d
_
0
a a
-0w
M N Ql
QJ
N
0
coo O
O
N z:!m
001 w
O
Gn
N '�
>' 00 a
f6
i
y
O 0
N w E
Ln
(7
O
c a
-
> w
a O
a+ C O
^H
Y
1
cu
U w
ccu
m
Cm
Q
mi
u
4-
v
+�
m
v
06 _0U
(1)
m V) 6b to
V) v
C
4-
–Q-5
�
J
0
V
-5Q
J
U— U cn
>1
Q
•
•
• •
mi
06
7-U
EO
O ^
zj N
J
C
�G1
C
�
O
N'0
V
U�
2�
•
m
Q
•
•
mi
06
7-U
O
O ^
zj N
J
C
�G1
)
V
•
•
•
•
GJ
N
N
0
tn
a)
Q
�"-V,�
v
J
U
U_ O
N
>
Q
v1
U w
>
•
•
•
•
0
°-
E
E
}'
�
v
Q
0
N
cn
mi
Q =
Z
W
min
Q =
Z
W
04
o=
#==EEc
'b.
/><0m
�kr
\\\/
\
04
o=
#==EEc
/><0m
�kr
$§�
(LCL
k 3
o�
2
|E
f))(
o ..
K K
d=�
£»/7
oe
Va§
IA
V
O
N
O
L
C
_
C
Y
L
cu
L
C
C
D
u
C
ri
O
++
C
O
—
N
ei
N
Ln
Lf)
�
E
O
0
�
4�
J
Ln
tao
C
J
Od
CL
L
a)
C
C
�
L
v
C
C
CL
:3L
O^^
O
U
C
�
0
O
U
C
Lncu
Q
u
J
0
Ln
t.0
p
>'
>'
N
c9
�'
E
N
c
-O
E
>
d
O
cu
CL
L
N
L
C
fC
a1
Ca
C
c0
—
C2
>,
>,
O
+T+
—_
al
Y
0--a
t
u
t
Y
a
o
++
O
3
°J
—
a
'O
Waj
a1
C
vO
C
O
CCD
v
a1
O
7
a1
'O
U
L
-0C
Qfa
U
N
CU
i
u
v
-
>
Z
41
aCi
3
IA
V
VI
N
C
C
C
C
ri
10-01
ri
ei
N
Ln
Lf)
�
E
L
�
4�
J
tao
C
J
Od
CL
L
a)
C
C
�
L
v
C
C
CL
:3L
O^^
O
U
C
0
0
O
U
C
Q
Q
J<
J
0
m
F-
°;6
Ln
c/)
Z
W
zz0
m
D
W
J
V-
W
V-
z
V)
N
v
O
CL CL
E\�
a) _J
� C
O L
H
_ T
c
0
C
4A v
C -O
b
s X
U •—
LL
y.� C
4.1 �
v
N
C
C QU
O v
L
U
7
O u
L 'yr
Q L
> U
l0
c
O
O
117
C
v
E
O
L
C
LU
IIIII� a �
0)
U
c
ro
L
N
c
m
i
aJ
c
3
O
4.
a)
Q
4-
0
a1
aJ
v
Qj
v
v
E
O
LA
4�
U
O
L
Q
T
C
7
^c
W
^E
W
L
E
cu
L
0
O
L
O
0
O
Ln
v
V)
O
O
U
e,
C:
co
CL
c
a,
E
a�
ai
L
I
a)
LO
7
O
4J
T
(0
W
KIP
Ln
4-
a)
C
a!
c
c
c
O
O
Ln
C:
m
v
Y
U
7
aJ
C
c
ns
O
Ln
N
i/}
z
cW
W c
J
CL J
00
NO
z
W
CL CL
O
O C:
J O
O
4�
O C
O L
� O
c I dA C
M l6
N - _
ON u O
3: '4,
N 5
> _0
L cu m
N L L
O O
E Lnn
N L E L
Qi O
N O >
L U N O
LL Q
+-+ :3 M U
_ E }
co O O
dA U C:) t
ca =
LA N
O E
t N i
O O . O
O }, L
f6 4� f0
O C u
E >, N N
Ln
N W 4�
CA U
O ate -
DC O +'
u C
a + U 41 N
U co >
W (/)
D
OO
Z W
cf