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Home My WebLink About13- Human Resources ORIGINAL CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION From: Linn Livingston, Director Subject: RESOLUTION OF THE of Human Resources MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO Dept: Human Resources AUTHORIZING AN ANNUAL STIPEND PAYABLE TO EMPLOYEES WHO Date: October 15, 2009 WAIVE HEALTH CARE BENEFITS TO COMMENCE CALENDAR YEAR 2010. M/CC Meeting Date: October 19, 2009 Synopsis of Previous Council Action: Recommended Motion: 1) Adopt Resolution. Signature Contact person: Phone: Supporting data attached: Ward: FUNDING REQUIREMENTS: Amount: Estimated $110.600 savings Source: (Acct. No.) Various departmental accounts (Acct. Description) Finance: Council Notes: eao 0009- 339 Agenda Item No. �3 Riplavyemetd /FTJ /0 -lq-oq CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect• Resolution of the Mayor and Common Council of the City of San Bernardino authorizing an annual stipend payable to employees who waive health care benefits to commence Calendar Year 2010. Back round: At the request of the previous City Manager as well as our employees, the Human Resources Department reviewed the possibility of providing a"stipend" (cash back)to employees who now opt out, or may be eligible to opt out, of City-sponsored health plans. Currently employees that are covered by an outside health care plan that is comparable to the City's plan can opt out of the City's plans by providing written documentation of their external coverage. In order to determine if a cash back type of program would be beneficial to employees while at the same time being cost effective for the City, an audit of our employee health care participation was conducted. The statistical information provided by the City's health care vendors shows that approximately 155 employees may be currently eligible for this program. The current annual premium cost to the City for this selected group of employees is approximately$756,300. The Human Resources Department also conducted a survey of our surrounding agencies to find out what type, if any, cash back programs were being offered. Based on the survey,the Human Resources Department is recommending an annual stipend of$2,500 for current employees that are covered by an outside health care plan that is comparable to the City's plan. This stipend is similar to those offered by the City of Riverside, City of Ontario and the San Bernardino Municipal Water Department. Should the City provide an annual stipend of$2,500 in lieu of health care benefits,the cost with 100% eligible employee participation is$387,500(155 employees x $2,500 proposed stipend= $387,500), resulting in a potential annual savings of $368,800 ($756,300 current premiums- $387,500 stipend=$368,800). However, due to the newness of this program, it is estimated that the City will only see approximately 30%participation during the 2010 benefit year,resulting in an estimated savings to the City of$110,600. Based on information from our health care providers and the survey information of our surrounding agencies,the Human Resources Department is recommending that the City of San Bernardino offer employees who waive all health care benefits(excluding City-paid life insurance,AD&D, and any short or long term disability benefits currently provided) an annual stipend of$2,500(see Exhibit A). Upon approval by the Mayor and Common Council,Human Resources will hold a special open enrollment period for employees interested in participating in the 2010 Health Insurance Waiver Stipend program. Financial Impact: Annual savings to the City of San Bernardino will depend on participation. The FY 2009-10 estimated savings is $110,600. Recommendation: 1) Adopt Resolution. Exhibit A WAIVED HEALTH BENEFITS POLICY ` Pro¢ram Description Effective with health benefit plan year 2010,the City of San Bernardino agrees to provide full-time eligible employees who waive health benefits an annual "Health Insurance Waiver Stipend' of$2,500 each December 15th, starting December 15th of 2010. Eli¢ibility Requirements • Employees must be regular full-time and be in paid status for a minimum of 21 hours per week to be eligible for the benefit. Paid status includes hours paid for regular work time,vacation leave, sick leave, compensatory time off,jury duty leave, administrative leave, military leave, disciplinary, paid holidays,MOU concession leave, and carpool leave. For members of Safety groups, also included is "4850"paid injury leave. It does not include amounts paid by any other disability benefit. • Employees must provide the City's Human Resources Department with satisfactory proof(written) of medical insurance coverage comparable to the City's medical insurance plan. • Employees participating in this plan are required to waive all medical, dental, vision, supplemental life, and supplemental AD & D benefits. • Employees will continue to be eligible for the following City defined plans as outlined in their current MOU: Basic Life Insurance Basic AD &D Short or Long Term Disability Health Insurance Waiver Stipend • Eligible employees shall receive a maximum stipend of$2,500 the first payday in December (December 15th). • Employees must be employed through the end of the last payroll period in November to qualify for this benefit. • Unless hired during the benefit year, employees must participate in the program for the full 12 months in order to receive the full stipend. Employees on payroll on November 30`h who were hired durine the benefit year and did not work the entire 12-month period shall earn the stipend on a pro-rata basis ($208.33 per month). Employees who waived insurance benefits during open enrollment, but then requested to enroll in benefits prior to November 30th will not be eligible for any portion of the stipend. Exhibit A • The Health Insurance Waiver Stipend is paid as taxable compensation. Earnings will be reported on the employees' W-2 form each year. Processing • Employees will have the opportunity to enroll in the program during the Open Enrollment period for health benefits each year. • By December 5`h of each year, the Human Resources Department will provide the Finance Department with a list of those employees approved to receive the $2,500 or pro-rated stipend on their December 15th paycheck. O t i 1 COPY RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN 3 BERNARDINO AUTHORIZING AN ANNUAL STIPEND PAYABLE TO EMPLOYEE 4 WHO WAIVE HEALTH CARE BENEFITS TO COMMENCE CALENDAR YEAR 2010. 5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CIT 6 OF SAN BERNARDINO AS FOLLOWS: 7 a SECTION 1: The City Manager of the City of San Bernardino is hereby directed 9 to authorize on behalf of said City an annual stipend payable to employees who waive health 10 care benefits to commence Calendar Year 2010 as outlined in the Waived Health Benefits 11 Policy,which is attached hereto marked Exhibit"A." 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 o ' -1- 720- i� 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN G BERNARDINO AUTHORIZING AN ANNUAL STIPEND PAYABLE TO EMPLOYEE 2 WHO WAIVE HEALTH CARE BENEFITS TO COMMENCE CALENDAR YEAR 2010. 3 4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor an 5 the Common Council of the City of San Bernardino at a meeting thereof, held 6 on day of 2009, by the following vote,to wit: 7 8 COUNCILMEMBERS: AYES NAYES ABSTAIN ABSENT 9 ESTRADA BAXTER 10 BRINKER 11 SHORETT 12 KELLEY 13 JOHNSON V 14 MCCAMMACK 15 16 Rachel G. Clark, City Clerk 17 The foregoing resolution is hereby approved this day of 2009. 18 ' 19 Patrick J. Moms, Mayor 20 Approved as to form: City of San Bernardino 21 JAMES F. PENMAN, 22 City Attorney 23 By: 24 r, 25 S:\Agendaltems\Reso.Healthbenestipend.doc V -2-