Summary COMMERCIAL AND GROUP HEALTH INSURANCE RATES FOR FY 19/20.
COMMERCIAL PACKAGE
See attached FY 2018/19 and FY 2019/20 renewals for comparisons.
Liability rates are directly tied to payroll total. Rates, after negotiation, remained level even though an increase was anticipated. Total premium increase in that payroll increase of 4%is budgeted and total premium is tied to payroll.
Auto (all motor vehicles including largest trucks). Increase in rate is small and tied only to COA property damage due to increased base vehicle costs and, particularly, to cost increases in equipment (computers, lighting and special equipment). The $8,725.00 premium increase is directly related to the addition of 19 vehicles during the current FY. The liability and property damage coverage is a true bargain at an average yearly premium cost of less than $425.00 per vehicle.
Property insurance rates increased by 15% in order to replace pool funds depleted by current year storm losses.
Worker Compensation rates increased 5.6% due to loss experience increasing by 13% and payroll increasing by 4%. The rate/total premium cost could have gone up 15% due to claim losses and increase in payroll, however, the COA safety and wellness programs and other negotiated credits brought the final cost increase in at 5.6%.
GROUP HEALTH RATE
See attached FY 2018/19 and FY 2019/20 renewals plus Comparison Spreadsheet
Group health Insurance rates have been increasing over the past ten years but the COA has been able to remain below market increases due to participation in the Florida Municipal Insurance Trust since 2014/2015. The City loss experience has been higher than premiums paid for the past few years, but, the 2017/2018 loss ratio (82%) brought a negotiated 2% rate reduction for the FY 2018/2019 based on a break in the trend of COA losses in excess of premium and discounts gained because of the implementation of wellness and safety programs.
Unfortunately, loss experience for the FY 2019/2020 rating period again returned to more than 100% of premium paid. A startling total of $506,316.94 for four (4) Large Loss Claims thru July 2019 and the medical Cost Trend (MCT) factor projected at +7% by FMIT, challenged both City staff and FMIT. But after agreement was reached that the present and prior year 82.4% loss ratios would be averaged, the rate increase was settled on at 5% for FY 2019/2020 (a de facto roll back of current year 2% decrease plus a 3% increase). The FY 19/20 base cost will increase to $1,166,313.00 (+$34.94 per employee monthly). A 2018/19 and 2019/20 comparison schedule is attached.
The City of Alachua focus on developing a culture of safety and wellness, in coordination with FMIT Group Health and Risk Management specialists, 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.
Ninety two percent (92%) of City employees currently participate in the wellness program, up from 78% last year.
Reports 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 existing coverage is recommended. Rate sheets are Attached
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.
There is no increase for Dental, Life (included EAP) and Vision coverage.
Renewal recommended.
EMPLOYEE PAID SUPPLEMENTAL HEALTH BENEFITS
A long list of supplemental benefits is made available to employees at employee cost and by City provided payroll deduction. |