HomeMy WebLinkAbout22 Human ResourcesCITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Edward Raya
Director of Human Resources
Dept:
Date: November 10, 1998
Synopsis of Previous Council action:
Recommended motion:
Subject: Provision of City' s various
insurance benefits.
oRiuiNaL
That the Mayor be authorized to execute an agreement with Delta Dental
to provide the City's dental insurance benefits and with UNUM Insurance
to provide the City's life, accidental death and dismemberment and
long term disability insurance benefits, subject to City Attorney approval
and ratification of the final agreement by the Common Council.
Contact person:.
Ed Raya
Supporting data attached:
FUNDING REQUIREMENTS:
Council Notes:
75 -0262
Amount:
Source: (Acct No.)
(Acct Description)
q� 4—
Signatur
Phone: 5161
Ward:
Finance:
Agenda Item No.
N (1F SAN BERNARDINO REQUEST FOR COUNCIL ACTION
STAFF REPORT
BACKGROUND
The City of San Bernardino provides a comprehensive benefit package for its employees.
August 1998, Unicare (formerly John Hancock) notified the City that effective 1 -1 -99 they
would no longer provide benefits for employers located in California. Unicare administers the
City's self - insured dental/vision program and provides the City -paid basic and supplemental life
insurance. The City's Human Resources Department has been actively reviewing options to the
Employee Benefits program that will provide similar coverage at approximately the same cost.
ANALYSIS
The Human Resources Department contacted a number of benefit insurance carriers to solicit
proposals. Due to the restricted time available to implement a new program, staff was unable
to conduct a formal bid process. Staff did contact a number of companies that included:
Blue Cross
Denticare
Unum
Heller & Associates
Delta Dental
PMI
AVP Vision
The City's objective was to match or exceed the existing coverage, while maintaining or
reducing the cost for both the City and the employees. Staff reviewed the proposals and
recommendations with all Employee Associations; and the Associations agreed with the
recommendations. The following programs are being recommended:
Dental Coverage
Staff is proposing contracting with Delta Dental to provide the employees' dental insurance.
Delta is proposing two plans at premiums that match or are less than our previous coverage.
The 1" plan, the Delta - Preferred Option Program, provides employees the opportunity to see
any dentist they choose or select from a large list of Delta Dentists. If the employee utilizes
the services of a Delta Preferred Option Dentist, the program provides 100% coverage without
a deductible for all diagnostic and preventative procedures. Additionally, the Delta network
includes approximately 90% of all dentists in California. As a result of their size, Delta is
able to produce further savings for the employee by capping the amount the dentist in their
network will charge for specific procedures, thus reducing the employee's portion of the
payment. The Delta program also offers coverage for adult orthodontic treatment that was not
available under the Unicare program.
The 2nd plan involves the lower cost option offered to employees. Employees have expressed
a fairly consistent level of dissatisfaction with the Denticare program over the years.
Complaints have included the limited selection of dentists and the level of out -of- pocket costs
incurred by the employees. We are recommending replacing the two option Denticare
P with a two option Deltacare program. The plan 765 replaces the low option program
and the plan 750 replaces the high option plan. In addition to offering a wide choice of
dentists, the Deltacare plans offer benefits and co- payments that match or exceed the
Denticare plan.
Vision
As an alternative to the City's self - funded Unicare vision program the City will continue to
offer the PMI Vision plan. When compared to the Unicare vision plan, the PMI Vision plan (an
HMO -type plan) provides benefits with fewer out -of- pocket expenses to the employee. We are
currently working with PMI to expand their list of optometrists in the local area.
Supplemental Life Insurance
Unicare, the City's provider for Basic and Supplemental Life insurance will be replaced by
UNUM, our current Long -Term Disability Insurance carrier. The plan and the amount of
insurance the employee may purchase will remain unchanged. The City was successful in
negotiating a 20% rate reduction. Although this may not cost save the City money (it will not
cost the City anymore either). The rate reduction provide employees with the opportunity to
purchase more coverage with their benefit dollars.
COSTING
The rate structure for the Dental and Vision coverage is approximately the same as the prior
program. The rates for the life insurance have been reduced by 20 %, which may result in
some small savings to the City. The cost to the City is difficult to quantify because it is based
on the individual selections made by each employee. The cost of these benefits is included in
the 1998 -99 budget.
RECOMMEDED ACTIONS
That the Mayor be authorized to execute an agreement with Delta Dental to provide the City's
dental insurance benefits and with Unum Insurance to provide the City's life, accidental death
and dismemberment and long term disability insurance benefits, subject to the City Attorney
approval and ratification of the final agreement by the Common Council.
Unicare Dental/Vision
DentiCare
High Option
Low Option
PMI Vision
Delta Dental Preferred
Delta Care
Plan 750
Plan 765
PMI Vision
RATE COMPARISION
CURRENT COVERAGE
Employee Employee +1
$33.59 $73.43
Attachment A
Employee + Family
$101.73
15.63
24.65
33.77
10.87
16.55
22.81
7.91
10.87
15.82
NEW PROGRAM (Effective 1 -1 -99)
Employee Employee +1 Employee + Family
$32.01 $69.84 $94.58
13.23
21.83
32.26
11.16
18.42
27.24
8.07
11.09
16.14