Agenda Item # 4
Columbus Consolidated Government

Council Meeting

October 8, 2013

Agenda Report # 39

TO: Mayor and Councilors

SUBJECT: Retiree Insurance Plan

INITIATED BY: Reather Hollowell, Director of Human Resources

Recommendation: Approve a resolution authorizing modification of the Medicare eligible health plan benefits and the United Healthcare Medicare Advantage plans.

Background: In October 2007 Council authorized implementation of a Medicare Advantage plan and established a cost sharing formula whereby the City pays 25% of the fully insured health plan premium (Ord. No. 07-70). In 2012 the City’s benefits consultant, Northwestern Benefit Corp, recommended a change in vendor for the Medicare Advantage Plan from BCBS to United Healthcare. The Retiree Benefits Committee approved the change in Medicare advantage provider because of the favorable plan design changes and decrease in premium costs.

City Council authorized a contract with United Healthcare for the retiree Medicare Advantage Plan (Res. No. 284-12). There is no recommended change in Medicare Advantage plan provider for the retirees; they will remain with United Healthcare.

Analysis: The retirees were initially presented with 4 options for renewal and requested two additional options that either increased the out of pocket maximum or deleted the 5% coinsurance for catastrophic coverage after a $4,750 annual out-of-pocket drug cost maximum. The retirees ultimately selected option #4 which raises the out of pocket maximum from $500 to $750 and eliminates the 5% coinsurance for catastrophic coverage after a $4,750 drug cost maximum. While this represents an 8.37% increase over 2013, it is much less than the 12% increase had they done nothing. The retiree’s monthly rates will go from $125.13 a month to $135.61 a month. This is a $10.48 monthly difference.

Financial Considerations: There is minimal cost to the City for the recommended changes due to the minimum increase in premiums.

Legal Considerations: The Council must authorize changes to the health plan.

Recommendations/Actions: The Retiree Health Benefits Committee and the Human Resources Director recommend the proposed resolution.


A RESOLUTION

NO. ____

A RESOLUTION AUTHORIZING MODIFICATION OF THE MEDICARE ELIGIBLE HEALTH PLAN BENEFITS AND THE UNITED HEALTHCARE MEDICARE ADVANTAGE PPO PLAN.

WHEREAS, United Healthcare has offered the City a modified Medicare Advantage PPO plan with a minimum increase to premium costs; and,

WHEREAS, the premium increased by 8.37% over 2013 rates, and the retiree’s monthly rates will go from $125.13 a month to $135.61 a month; and,

WHEREAS, the Retiree Health Benefits Committee recommended two plan changes that included: The out of pocket maximum was increased from $500 to $750 annually. A change was made to catastrophic coverage that after the yearly out-of-pocket drug costs reach $4,750, retirees pay the greater of 5% coinsurance or $2.65 copay for generic and $6.60 copay for all other drugs. The 5% coinsurance was eliminated.

WHEREAS, the Columbus Council must authorize implementation of the recommended changes and options.

NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA HEREBY RESOLVES AS FOLLOWS:
Section I.

That the Human Resources Director is authorized to modify the existing Medicare Advantage PPO contract with United Healthcare to raise the out-of-pocket maximum and – eliminate a 5% coinsurance for Catastrophic Coverage after $4,750 for drug cost threshold is met with only small copays remaining. The changes will become effective January 1, 2014.
_______________________________

Introduced at a regular meeting of the Council of Columbus, Georgia, held the 8th day October, 2013 and adopted at said meeting by the affirmative vote of ______ members of said Council.

Councilor Allen voting __________
Councilor Baker voting __________
Councilor Barnes voting __________
Councilor Davis voting __________
Councilor Henderson voting __________
Councilor Huff voting __________
Councilor McDaniel voting __________
Councilor Turner Pugh voting __________
Councilor Thomas voting __________
Councilor Woodson voting __________




______________________________ ________________________
Tiny B. Washington, Clerk of Council Teresa Pike Tomlinson, Mayor