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
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