HomeMy WebLinkAbout1989-01-03; City Council; 9801; Health Insurance Cost increasesCl : OF CARLSBAD - AGEN^ * BILL * A
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TITLE: HEALTH INSURANCE COST INCREASES OPPT HB.'A'r
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RECOMMENDED ACTION:
Adopt Resolution No. fT"f authorizing the transfer of funds to pay
increased employee health insurance costs and increasing the medical claim
pooling level with Northwestern National Life from $50,000 to $75,000.
ITEM EXPLANATION;
The policy year for employee health insurance ended December 31, 1988. We
need Council action to approve the increased rates. The new rates for 1989
are 9.56% for Kaiser and 24.6% for Northwestern. These additional premiums
for health insurance were expected. Cost containment programs over recent
years have helped lower the costs, but we have been overwhelmed by medical
care inflation.
The original increase in premiums the City received from NWNL was 28.3%
The Personnel Department has been working with our Benefit Consultant to look
for potential ways to reduce the premiums. One way to lessen the costs from
28.3% to 24.6% is to expand the medical claim pooling level from $50,000 to
$75,000. In other words, if the City has an individual claim that exceeds
$50,000, NWNL will be responsible for the additional costs over $50,000.
Historically, Carlsbad has had very low claims experience. In fact, in 1988
the City had only one claim that surpassed that amount. Staff believes it
is more cost effective to increase the pooling level to $75,000 than to
risk a high claim.
FISCAL IMPACT;
A fund transfer from the General Fund Contingency Account 001-840-1990-2990
is requested in the amount of $113,951. The entire costs for health
premiums during 1989 are approximately $1.5 million. The balance of the
Contingency Fund will now be $638,204. In addition, there will be an
appropriation of various other special funds in the amount of $10,751 as
shown in the attached resolution.
EXHIBIT;
Resolution No. Q/*~/
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RESOLUTION NO.89-1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, AUTHORIZING THE
TRANSFER OF FUNDS TO PAY INCREASED EMPLOYEE
HEALTH INSURANCE COSTS.
WHEREAS, costs of employee health insurance have increased
for 1989; and
WHEREAS, under existing Memorandums of Understanding most
additional insurance costs are borne by the City; and
WHEREAS, funds must be transferred to departmental budgets
to ensure payment of health insurance costs.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That the following amounts are hereby appropriated:
From Account No.
001-840-1990-2999
131-890-3330-0000
161-890-6210-0000
180-890-8127-0000
181-890-8119-0000
501-890-6310-0000
511-890-6110-0000
620-890-5210-0000
640-890-1720-0000
810-890-3410-0000
To Account No.
001-840-Various-1940
131-840-3330-1940
161-840-6210-1940
180-840-8127-1940
181-840-8119-1940
501-840-6310-1940
511-840-6110-1940
620-840-5210-1940
640-840-1720-1940
810-840-3410-1940
Amount
113,951
1,131
636
413
180
3,196
1,514
2,176
540
965
3. That the Health Insurance Rates for 1989 set forth
in Exhibit A, attached hereto and made a part thereof, are
adopted.
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4. That the medical claims pooling level for Northwestern
National Life shall be increased from $50,000 per claim to
$75,000 per claim.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the
Carlsbad City Council held on the 3rd day of January ,
1989, by the following vote, to wit:
AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Larson
NOES: None
ABSENT: None
CLAUDE "A. <-LEWIS, Mayor
ATTEST:
±L. A
ALETHA L. RAUTENKRANZ, City tilerk
(SEAL)
EXHIBIT "A"
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