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Item 4E Approve a contract renewal with Aetna to provide employee health insurance benefits for Plan Year October 1, 2017 through September 30, 2018. Item 4E Honorable Mayor and members of the City Council, this presentation will cover Item 4E on the August 1, 2017 City Council Agenda. 1 Item 4E Approve a contract renewal with Aetna to provide employee health insurance benefits for Plan Year October 1, 2017 through September 30, 2018. The purpose of this item to is to request City Council approval of a contract renewal with Aetna to provide employee health insurance benefits for the Plan Year October 1, 2017 through September 30, 2018. 2 City of Southlake Strategy Map The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing efficiency, fiscal responsibility, transparency, and sustainability. Performance Management & Service Delivery C1 Achieve the highest standards of safety & security C2 Provide travel convenience within City & region C3 Provide attractive & unique spaces for enjoyment of personal interests C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment C5 Promote opportunities for partnerships & volunteer involvement Serve our Customers Manage the Business B1 Achieve best-in-class status in all City disciplines B2 Collaborate with select partners to implement service solutions B3 Enhance resident quality of life & business vitality through tourism B4 Provide high quality services through sustainable business practices B5 Enhance service delivery through continual process improvement B6 Optimize use of technology Provide Financial Stewardship Promote Learning and Growth F1 Adhere to financial management principles & budget F2 Invest to provide & maintain high quality public assets F3 Achieve fiscal wellness standards F4 Establish & maintain effective internal controls L1 Ensure our people understand the strategy & how they contribute to it L2 Enhance leadership capabilities to deliver results L3 Attract, develop & retain a skilled workforce L4 Recognize & reward high performers L5 Empower informed decision-making at all levels in the organization C6 Enhance the sense of community by providing excellent customer service and citizen engagement opportunities L6 Foster positive employee engagement Deliver on Our Focus Areas Approving the contract renewal with Aetna links to the City’s strategy map relative to the focus area of Performance Management and Service Delivery and specifically to the corporate business objective of Attract, develop, and retain a skilled workforce. 3 Background 3 Plans: HDHP, EPO, POS October 1, 2016 The City’s current healthcare plan is a fully insured plan provided by Aetna. [CLICK] Employees are offered three different plan options: [CLICK] a “base” EPO plan, a “buy-down” High Deductible Health HSA (HDHP) plan, and a “buy-up” Point of Service plan. The City contributes the same amount to all three plans and employees are able to choose a plan that best meets their own unique healthcare needs. Aetna became the City’s health insurance carrier [CLICK] October 1, 2016 following a competitive bidding process. 4 Renewal 3.0% Rate Increase Each year in June the City receives a renewal proposal from the current health insurance provider. This year, Aetna proposed a rate increase of 3% to maintain the existing plan designs. On the screen you can see a snapshot of the plan design for each of the plans offered through Aetna. Since switching carriers, the City’s experience with Aetna has been favorable and we have received very few service complaints from employees. In addition, as part of the renewal process, staff reviewed the claims data and the trend of the healthcare industry and we believe that the proposed renewal is fair. 5 Financial Considerations Estimated cost of health insurance premiums: Funding for employee health insurance will be included in the proposed FY 2018 budget. The total estimated cost of the City’s contribution towards health insurance premiums $2,959,265. Should City Council approve the contract renewal, the annual estimated increase in the City’s portion of medical insurance premiums is $60,974 for Fiscal Year 2018. <<Total Annual Cost: $$4,243,062>> <<City currently pays 70% of total premiums.>> Funding for the proposed medical insurance plan costs will be included in the proposed budget for Fiscal Year 2018. 6 Staff Recommendation Approve a contract renewal with Aetna to provide employee health insurance benefits for Plan Year October 1, 2016 through September 30, 2017. Staff recommends City Council Approve a contract Aetna to provide employee health insurance benefits. 7 Questions: Stacey Black 817-748-8063 8 If you have any questions regarding this item, please contact me at 817-748-8063. Thank you for your time and attention.