Agenda Item # 3
Columbus Consolidated Government
Council Meeting
December 14, 2010
Agenda Report # 587
TO: Mayor and Council
SUBJECT: Retiree Insurance Plan
INITIATED: Human Resources Department
Recommendation: Approve a resolution authorizing modification of the Medicare
eligible health plan benefits and the Blue Cross Medicare Advantage plans.
Background:
In October 2007 Council authorized implementation of a Medicare Advantage plan
and established the cost sharing formula whereby the City pays 25% of the fully
insured health plan premium (Ord. No. 07-70). Due to passage by Congress of
the Medicare Improvements for Patients and Providers Act, the current Medicare
Advantage PFFS plan is being cancelled and replaced with a similar Medicare
Advantage PPO plan at a significantly higher premium.
Benalytics researched various optional Medicare health plans and developed what
is believed to be the best available options for Medicare Advantage
participants. These options were presented to participants at meetings on
December 2, 2010. Although no one ever likes to receive a rate increase, many
of the participants attending the meetings indicated that they know that they
have an excellent health plan and that they intend to stay with the high option.
Analysis: We believe that providing internal and external options is the
fairest approach to subsidizing the retiree health care premiums. Some younger
and healthier retirees will save significantly by enrolling in the Blue Cross
supplement, knowing that they can switch to the high option if their situation
changes. Low-income retirees may be better off with either the low option or
supplement, while taking advantage of medical and pharmaceutical resources
available to low income seniors. Some participants indicated that they can do
better with an external plan offered by a provider other than Blue Cross, these
participants will be free to pursue that option, knowing that if they leave the
City plan they will receive the subsidy payment but will not be able to return
to a City plan at a later date. Bottom line, while we are sympathetic to the
needs of our retirees, there are no inexpensive healthcare options available to
anyone in today?s health care environment.
Financial Considerations: There is no additional cost to the City for the
recommended changes.
Projected Annual Fiscal Impact Statement: The January 1, 2011 Medicare
Advantage renewal policy offered by Blue Cross has a total additional annual
premium of $724,620 for the 650 plan members, compared to the cost for 2010.
25% of that cost or $181,155 will be the paid by the City with the retirees
paying the remaining $543,465. Although the additional cost for the City is
fixed under this proposal, by selecting from the available options, the annual
cost for participants will range from a savings of $80.52 to an additional cost
of $836.16.
Legal: The Council must authorize changes to the health plan.
Recommendation/Actions: The Human Resources and Finance Directors recommend the
proposed resolution.
A RESOLUTION
NO.________
A RESOLUTION AUTHORIZING MODIFICATION OF THE MEDICARE ELIGIBLE HEALTH PLAN
BENEFITS AND THE BLUE CROSS MEDICARE ADVANTAGE PLAN.
WHEREAS, Blue Cross notified the City that it will not renew the current
Medicare Advantage PFFS health plan and with short notice significantly
increased the premium for the replacement PPO plan; and,
WHEREAS, it is recognized that the individual needs of each retiree may differ,
options to the current plan were researched and presented to Medicare Advantage
participants at special meetings on December 2, 2010; and,
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 contract with Blue Cross Blue Shield of Georgia to include Medicare
Advantage high and low options, and a Medicare supplement.
Section II.
That the Medicare eligible participants may select from the Blue Cross
options or may secure coverage outside of the City sponsored plans, and
regardless of the option selected the City will contribute 25% of the total
insured premium for the City sponsored high option, currently $63.52 per month,
toward the cost of the internal or external plan selected by any current or
future retiree or dependant eligible to participate in the City subsidized
Medicare eligible health plan, adjusting said contribution from time to time as
premiums increase or decrease.
________________
Introduced at a regular meeting of the Council of Columbus, Georgia, held
the _________ day of ____________, 2010 and adopted at said meeting by the
affirmative vote of _________ members of said Council.
Councilor Allen voting __________.
Councilor Anthony voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Henderson voting __________.
Councilor Hunter voting __________.
Councilor McDaniel voting __________.
Councilor Turner Pugh voting __________.
Councilor Woodson voting __________.
_______________________________ ____________________________
Tiny B. Washington, Clerk of Council Jim Wetherington, Mayor
Attachments