Summary REDUCTION IN INSURANCE RATES FOR FY 18/19.
Group health Insurance rates that have been increasing dramatically over the past few years will decline for the coming fiscal year. FMIT has reported a medical cost trend (MCT) of plus 7.5% but has agreed to a FY 18/19 renewal of City coverage at 2% less than the current rate (2% actual decline plus non application of 7.5 MCT = 9.5. actual reduction).
The Commercial Package Rates have also been reduced by small amounts, except for small increases in vehicle coverage. The net increase in the total commercial package of $25,503 primarily is a result of adding nearly $9 million in new construction to the property schedule. The 18/19 premium, therefore, will increase from $342,270 to $367,773.
The City of Alachua focus on continuing to develop a culture of Safety and Wellness in coordination with FMIT Group Health and Risk Management specialists and managers is a prominent part of discussions between the City and FMIT throughout every policy year. Our recognized Safety Program, coordinated by Safety Specialist Robert Purdy, results in a 2% reduction and the Drug Free Workplace Policy an additional 5% reduction in Workers Compensation premiums. The City also receives the maximum of $6,000 per year in FMIT Safety Grants to offset purchases of items as diverse as APD bullet protective vests, the replacement of insulated safety gloves for electric line staff and repairs to sidewalks. Seventy eight percent (78%) of City employees participate in the wellness program directly coordinated by COA HR Manager Casandra Sanjurjo and FMIT Wellness Coordinator Cindy Crump.
The Safety and Wellness Programs are carried forward by every City Department and reports back from FMIT are that the City of Alachua is cited across the state as an example of how to establish a Culture of Safety and Wellness.
Renewal of all existing coverage is recommended. Rate sheets are Attached
COMMERCIAL COVERAGE PACKAGE
The City placed the entire commercial package (General and Professional Liability, Automobile Liability, Automobile Physical Damage, Property Coverage and Workers Compensation) with the Florida Municipal Insurance Trust (FMIT) beginning with FY 2012-13.
The Commercial Package was renewed in each succeeding year.The FY 17/18 Premium of $342,270 is increased to $367,773 as reflected above.
The City will also receive a $11,214 refund of FY 15/16 Property premium as a distribution of "excess" premiums authorized by the FMIT Board of Trustees.
Renewal of Storage Tank Liability (approx. $1,700 P/Y) is included in the recommended action as is the cost of Statutory AD&D for Law Enforcement Officers through FMIT (approx. $1,500 P/Y). Rates are not yet available but will vary little from the small amounts reported.
Rate Sheet is attached and renewal is recommended.
GROUP HEALTH
The City has provided group health benefits through participation with FMIT since FY 14/15. The program is administered by United Health Care (UHC) and service is delivered through the UHC network of providers.
City employee participation, for rate calculation purposes, is deemed to be 100% since all full time employees are eligible and 100% of premium is paid by the City. Exception is made for employees who opt out of the City plan and are insured by an outside plan. The 100% participation is an important factor in reducing premium cost since the adverse selection factor is dramatically reduced or eliminated.
FMIT is a participating health benefits trust formed by the League of Cities and, as such, is not subject to the gross premium tax imposed by the Affordable Care Act (ACA) on commercial "for profit" insurance carriers. The FMIT program employs a small corps of salaried sales personnel and does not pay commissions. The Board of Directors is made up of elected officials from around the state and the trust serves as a financially sound pool the purpose of which is to provide coverage to its members on a cost basis, absent a profit motive.
Group Health benefit numbers are not subject to specific determination since the premium varies by the number of budgeted Full Time Equivalent (FTE) Employees actually working, eligible, and participating during the budget year. The projection for FY 2018-2019 participating FTEs is 129. The premium based on the reduced rate is (129 x $698.60) x12 or $1,081,432.80.
Renewal Recommended.
GROUP DENTAL, LIFE AND VISION
The City provides group dental, life and vision coverage for all FTEs and employee paid dependent coverage is available at group rates. Payroll deduction is provided by the City for dependent coverage at no cost.
The renewal notices for Dental, Life (included EAP) and Vision coverage are attached. The combined premium increase for the three separate plans is $1.89 per month for a total annual increase of $2,894.76 bringing the combined annual premium to $66,192.48.
Renewal recommended.
EMPLOYEE PAID SUPPLEMENTAL HEALTH BENEFITS
A long list of supplemental benefits is made available to employees at employee cost and by cost free payroll deduction.
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