HomeMy WebLinkAbout05-10-10 Admin. Com. MinutesADMINISTRATIVE COMMITTEE OF THE WHOLE
Monday, May 10, 2010
6:00 p.m. — Council Chambers
Minutes of Meeting
Vice Mayor Salay, Administrative Committee Chair, called the meeting to order at
6:00 p.m.
Present were Mayor Lecklider, Vice Mayor Salay, Mrs. Boring, Ms. Chinnici-
Zuercher, Mr. Gerber, Mr. Keenan, and Mr. Reiner.
Staff present: Mr. Harding, Ms. Ruwette, Ms. Gee, Ms. Hoyle, Ms. Grigsby, Chief
Epperson, Mr. Earman, Mr. Ball, Mr. McDaniel, Ms. Colley, Mr. Hammersmith.
Staff Presentation re. Funding Levels for 2011 Health Savings Accounts
Background
Mr. Harding noted that a memo in the Council packet provided background
regarding this matter, as well as the staff recommendation for funding levels for
the HSA program for 2011. The program is scheduled for implementation on
January 1, 2011. The final approval of a recommendation from Council will be
required prior to implementation of the program, and staff is hopeful that
Council by motion can approve a recommendation to staff of the funding levels.
He will recap the Council direction given at the meeting of August 31, 2009, the
plan basics, and the employee workshops done over recent months. He will
also review analysis that staff has completed to consider the level of City
contributions to be made to the HSAs in 2011. Staff will also review the
proposed levels of funding for the HSAs.
On August 31, 2009, Council directed staff to move forward with this concept
for 2011. The direction was to implement a Consumer Driven Health Plan
Model with a Health Savings Account on January 1, 2011. This timing was
approved to give employees sufficient time to understand the concept and to
assemble an employee communication plan to understand the impacts of the
new program.
An employee communication plan was undertaken, numerous workshops were
held, and analysis was conducted regarding the level of City contribution to the
HSA.
Staff was also directed to seek incorporation of this Plan into the bargaining unit
agreements in the future.
Plan basics and employee workshops
Ms. Ruwette stated that three workshops were held for employees in 2010 to
help them understand the HSA, how it works with the Plan design, and how the
contributions can be added to the HSA by both the City and the employee. Ms.
Wolfe, Wellness Coordinator hosted a workshop to review the four key health
factors, which are a new element to the benefit design with this program. Ms.
Administrative Committee of the Whole
May 10, 2010
Page 2
Wolfe also introduced a calendar of programs that employees could enroll in to
help them achieve these health factors. The last workshop was an online
computer -based class where each employee accessed their UHC account so
that a demonstration of tools could take place to help employees track their
medical expenses, price their prescriptions, and offer some consumer - driven
options for prescriptions. A worksheet was provided for employees to begin
tracking their medical expenses in 2010 so they can estimate the funds needed
in their HSA for 2011.
In 2011, this Consumer Driven Health Plan will be introduced, which is a
combination of a high deductible health plan and a Health Savings Account.
The HSA helps fund the non - preventive medical items that employees will have
to pay for in 2011 as part of the annual deductible. She pointed out that the
HSA is owned by the employee, contributions can be made by the City and by
the employee, and they are made on a pre -tax basis. One element of the
current Plan design that will continue moving forward is that any preventive
care services will be covered at 100 percent. Examples include well child
exams and adult wellness exams currently in the program. For these
preventive /wellness exams, the employee will not have to pay for them out of
their deductible or HSA. They are covered at 100 percent.
Once the annual deductible is met, the coverage for the Plan design begins.
The coverage levels in 2010 of 85/15 would begin again, once the deductible is
met. Once the maximum out of pocket is reached, the Plan will pay for all
medical expenses at 100 percent. This is similar to the current design for the
out of pocket maximum.
Mrs. Boring noted that the chart indicates $4,000 out of pocket. Does that
mean that with the $2,500 deductible paid plus payment by the employee of an
additional $1,500 — that the Plan will then cover medical expenses at 100
percent?
Ms. Ruwette stated that is correct.
Ms. Ruwette noted that there will be no changes to the current dental and
vision coverage, which will continue at the same levels as today.
Proposed level of City contributions to HSAs
Ms. Ruwette reviewed the proposed contribution levels to the HSA, based on
the Healthy by Choice program. These depict single and family plan
contributions to the HSA. There are two ways employees can earn City
contributions to their HSAs. The first is through participation in the Healthy by
Choice program, which earns $1,125 for single and $2,250 for family coverage.
That would comprise 45 percent of the annual deductible for each category.
The second opportunity for City contributions toward their HSAs is with the four
key health factors or results -based health factors. Those are tobacco free,
BMI /Waist circumference, Cholesterol, and Blood Pressure. By meeting these
Administrative Committee of the Whole
May 10, 2010
Page 3
factors during open enrollment, an employee or covered spouse could earn an
additional $150 per health factor. This amount would be contributed by the City
to the employee's HSA. The maximum results -based contribution for single
coverage would be $600 and for family coverage would be $1,200.
Therefore, the total amount that could potentially be contributed to the
employee's HSA would be $1,725 for single and $3,450 for family coverage.
Vice Mayor Salay noted that employees could contribute additional monies to
their own HSA.
Ms. Ruwette stated that is correct — this presentation focuses only on the City
contribution.
Ms. Hoyle stated that for 2010, the IRS has a maximum contribution limit to a
HSA of $3,050 for single and $6,150 for family. There is a catch -up provision
for those aged 55 and over of $1,000. The 2011 contribution limits have not
been announced.
Mrs. Boring asked if the IRS contribution limits for an HSA will likely increase
each year.
Ms. Hoyle responded affirmatively.
Mr. Reiner asked what the current rate of participation is in the City's Healthy
by Choice program.
Ms. Ruwette responded that the rate is 97 percent of employees. That also
includes spouses. The program was announced during open enrollment for
non -union employees, so they understood the direction the program was taking
and could decide whether they wanted to continue in the program. There is
another element to the contribution levels outlined in the memo — the
progression incentive. It provides employees the opportunity to receive a
portion of the $150 incentive — even if they don't achieve these factors during
open enrollment. Employees will be encouraged to improve their lifestyle
behavior. So two additional testing opportunities will be offered during the 2011
year. They can either re -test and reach the target level, or they can show
progress toward reaching it and would receive a partial incentive.
Mrs. Boring asked if blood pressure can be re- tested the same day, as it can
sometimes vary.
Ms. Ruwette responded that there will be three opportunities for blood pressure
testing on a day for that very reason.
Mayor Lecklider noted that the HSA will cover everything — doctor's visits,
prescriptions, etc.
Determination of City Contribution
Administrative Committee of the Whole
May 10, 2010
Page 4
Ms. Hoyle noted that in August of 2009, staff was directed to return to Council
with a recommendation of a reasonable contribution by the City to each
employee's HSA. Unlike flexible spending accounts, HSA accounts belong to
the employee. Items considered in this review were current out -of- pocket
expenses and comparisons with other jurisdictions in terms of the employee's
share of the coverage costs. Third, the budgetary impacts were considered, as
a goal of the Plan is to moderate the growth in the cost of health coverage.
She noted that other comparable jurisdictions have employees contributing 6
percent to 19 percent. Dublin is proposing that participants contribute 9 percent
of the total cost of providing family coverage. This represents a fairly moderate
cost of contribution for the coverage compared to the market.
The Oswald Company provided the City a study of what the claims experience
change would be under a high deductible health plan. The spending for health
coverage will be approximately the same, but in the long run, it will encourage
employees to be better consumers and therefore control costs.
She shared a calculation of what an employee might be expected to spend
under this Plan, with a single coverage deductible of $2,500 and family
coverage deductible of $5,000. Continuing to participate in Healthy by Choice
earns a contribution from the City to the HSA of $1,125 and $2,250
respectively. Based on health risk appraisals from 2008 and 2009, the
assumption is that 65 percent of employees will achieve two key health factors
and earn the funding associated with those of $300 (single) and $600 (family).
Because of the way HSAs and Consumer Driven Health Plans are defined in
the federal statutes, the categories are Single and Family. The City cannot
have a Plus one strategy in place as previously. In order not to disadvantage
an employee without a spouse who is covering dependents, they will have the
same opportunity to earn the funding. Therefore, a single parent will also have
the opportunity to earn up to $1,200 for the four health factors.
With three health factors, the employee earns $450. There is not specific data
available, but the assumption is that 10 percent of employees will achieve all
four factors at the first enrollment.
She summarized that the expected expenditure for deductibles for employees
who achieve all four factors would be $775 single and $1,550 family. Currently,
the City has 187 employees who have flexible spending accounts. The
average deposit into FSAs in 2009 was just under $1,200. So those employees
will need to merely shift those deposits into HSAs, with the advantage that the
money remains in their account if not used.
Mr. Keenan stated that one cannot have both an FSA and an HSA.
Ms. Hoyle responded that is correct. Only the dependent care FSA accounts
can be continued.
Mr. Reiner asked about the tax liability for money deposited into an HSA if you
take money out at retirement age.
Administrative Committee of the Whole
May 10, 2010
Page 5
Ms. Hoyle responded that a person aged 59 -1/2 can convert it to a qualified
IRA. As long as it is used appropriately, there is no tax penalty — other than
income tax owed. If it is used for health care purposes, there is no tax owed.
Mrs. Boring recalled that these kinds of questions came up at the meeting in
2009. Part of the confusion was if a spouse is enrolled in Medicare, can a
covered employee's HSA money be spent on a spouse.
Ms. Hoyle responded that an employee can spend his /her HSA funds on a
spouse's medical expenses.
Mrs. Boring recalled that in 2009, the response was that the HSA account could
only be spent on the medical expenses for the person owning the account.
Mr. Keenan asked about the out of pocket maximum under the current health
plan for the City.
Ms. Hoyle responded that it is $4,000 and $8,000 for in network. (Note the
following correction to what was stated: the current out of pocket
maximum for in network is $1,750 for single and $3,500 for family; the
current out of pocket maximum for out of network is $8,000 for single and
$16,000 for family)
Mr. Keenan stated that actually, an employee is better off with having an
employer contribution to the HSA -- it takes them closer to the out of pocket
maximum where the benefits cover 100 percent.
Mr. Lecklider asked for clarification: in the first year, for an estimated 10
percent of the participants, the balance to be paid by the employee to the HSA
is $775 and $1,550, respectively for single and family, for those who achieve all
four key health factors.
Ms. Hoyle responded that is correct for the first year.
Ms. Chinnici - Zuercher asked what the maximum contribution would be.
Ms. Hoyle responded $6,100 for family land $3,050 for single to an HSA, but
that changes each year under the federal guidelines. The IRS notification
generally is sent out in the second half of the year.
Ms. Hoyle stated that ideally, employees will have funds remaining in their HSA
at the end of the year. At a certain age, there is a provision for catch -up
allowing more deposits into the HSA. Overtime, a balance can be built up.
Mrs. Boring stated that under the FSA, things such as cosmetic items can be
covered. What about the HSA?
Ms. Hoyle responded that the federal rules provide a list of eligible items. The
difference with an HSA is that only those eligible items apply to the deductible.
For the high deductible health plan, the eligible expenses apply to the
deductible.
Administrative Committee of the Whole
May 10, 2010
Page 6
Mr. Reiner asked about the maximum contribution to the FSAs.
Ms. Ruwette responded $3,000 for a medical FSA, and $5,000 for dependent
child care. An FSA will be capped by 2013 to $2,500 under the new health
care law.
Ms. Hoyle stated that one can deposit more in an HSA than an FSA by law, and
the HSA carries over.
Mr. Reiner asked if staff expects that most employees will contribute the
maximum allowed to their HSA.
Ms. Ruwette responded that in workshops, employees were encouraged to
estimate 2010 medical expenses so they can be aware of their spending in
order to fund the HSA in 2011 to cover their typical spending on medical
expenses.
Ms. Chinnici - Zuercher stated that staff has indicated that the HSA is only for
deductibles.
Ms. Ruwette responded that the HSA funds can be used for items that fall
under the annual deductible, but it actually can be used for other things as well.
Many of the items that an FSA is used for today can also be used under an
HSA.
Ms. Hoyle noted that the only change in 2011 is that one can no longer
purchase over the counter medication with tax - advantaged accounts,
regardless of what type they are. This is a federal change.
Mr. Keenan asked if you can use the HSA funds for vision, dental, etc.
Ms. Ruwette responded affirmatively.
Ms. Hoyle added that many use these funds for orthodontia expense.
Mr. Keenan stated that those eligible for catch -up can actually deposit $2,325
as a single plus an additional $1,000 for 55 and older.
Mayor Lecklider asked about employee out of pocket expenses under the
current plan. What is the difference in the plan for 2011?
Ms. Hoyle responded that the information was difficult to ascertain, as an
employee's out of pocket expense is based on the co- insurance in place —
preferred provider plan. Staff attempted to review the employee spendings, but
it not something that was a major contributor to the evaluation. There is no
good data available. Employees currently pay a percentage of their health care
expenses (85/15), but with this type of plan they will pay up to a deductible
amount before the co- insurance kicks in. It is a different plan design.
Mayor Lecklider noted that she is indicating it is impossible to determine how
much more an individual employee, on average, will be paying under this new
plan.
Administrative Committee of the Whole
May 10, 2010
Page 7
Mr. Keenan stated that this can be determined for a maximum claim if someone
goes through the total out of pocket. The most an employee paid last year was
$1,750, under the current Plan. Next year, under the HSA, the most they will
pay under a single coverage is $4,000, less whatever money the City puts into
the HSA — which, if one qualifies with all four factors is $1,725.
Mayor Lecklider stated that he understands the formula. What he does not
have is the background data to review.
Ms. Hoyle stated that staff tried to determine how many people would spend
the entire amount of the deductible. It was estimated that 87 percent would
spend less than the deductible. In general, with claims, 10 percent of the
population represents approximately 90 percent of the claims. If that is
something to be considered, staff could track it this year. This is the first year
that the pharmacy is combined with the medical plan, and that will provide more
detail. Staff is confident that a large number of employees will end the year
with more money than they contributed to their HSA.
Mr. Reiner asked if there is a preventive care list published for the City's plan.
Ms. Hoyle responded that there is a recommended list based on age.
Ms. Ruwette stated that it is part of the Plan design, and she can provide a
copy to Council.
Mrs. Boring asked if the City will still use preferred providers to obtain favorable
rates.
Ms. Hoyle responded affirmatively.
Mrs. Boring asked if this Plan can be revisited after a year and modified.
Ms. Hoyle responded that modifications can be made to the City contribution to
the HSA. The minimum and maximum deductibles are established by law, so
the Plan must stay within those guidelines. If the City found that more
employees qualified for the four factors than estimated, the City might consider
how to shift those funds. The City can review the deductible funding, how the
claims come in, and as there is more experience, analysis can be done to
determine how these opportunities are working for employees. This is a City
plan, but the same discounts will continue in the network of United HealthCare.
Mrs. Boring asked if the City will begin covering pharmacist consult services.
Ms. Hoyle responded that this has not been discussed, but perhaps it could be
paid for as a covered expense in an HSA.
Ms. Ruwette noted that it has been proposed, but there are no federal
regulations in place at this time for pharmacist consult services. The goal
would be for a pharmacist to review all of the various prescriptions from multiple
doctors seeing a patient and then advise the patient of any overlaps in
medications or changes needed.
Administrative Committee of the Whole
May 10, 2010
Page 8
Proposed Timing of City Contributions to Employee HSAs
Ms. Hoyle noted that the proposed timing of funding for HSAs is based on the
concern that employees at the beginning of January, 2011 will not have the
opportunity to build up any balance in their accounts. So the City is proposing
to make an upfront deposit as of 1/1 /2011 of 1/3 of whatever funding that
employee earns in participation -based funding, as well as any funding that they
earn in the key health factors during open enrollment. Therefore, the employee
has the opportunity to have cash in the account on January 1.
Mr. Gerber asked what will occur if the employee leaves employment with the
City.
Ms. Hoyle responded that the money in the account is theirs to keep.
Mr. Keenan stated that this is unlike the FSA, where a procedure is done and
paid for upfront. This will not operate in this way.
Ms. Hoyle responded that the money cannot be drawn up front and
reimbursement made.
Mr. Keenan noted that for Lasik surgery, if someone planned to deposit
$100 /month in their FSA and had the Lasik surgery done in January, the
employer was responsible for the total cost.
Ms. Hoyle stated that is correct. Under the FSA, the employee can take out
the entire amount on January 2 if they pledge to contribute a certain amount
throughout the year.
Mr. Keenan stated that the HSA is different - only what is in the fund can be
spent by the employee.
Ms. Hoyle responded that is correct.
Ms. Chinnici - Zuercher asked for clarification: the participation -based amount is
$1,125 for single, and the City would deposit $375 in the HSA on January 1.
Ms. Hoyle stated that is correct. In future years, the timing may be
reconsidered. For the first year, this is intended to provide some funding at the
outset.
Vice Mayor Salay stated that someone who incurs a lot of medical expenses
early in the year will be negatively impacted.
Ms. Ruwette responded that employees have been encouraged to deposit
monies in their account on January 1 to cover unforeseen medical expenses.
That is why the communication effort began early, and why workshops have
been held to help educate.
Ms. Hoyle noted that staff is also reviewing whether funds from an annual
conversion of sick leave or vacation buy -out options can be deposited into
HSAs, especially the first year. This would be another opportunity for funding
Administrative Committee of the Whole
May 10, 2010
Page 9
the HSA. One advantage would be that depositing this money in an HSA would
result in it not being taxed; it would be pre -tax.
Mrs. Boring asked about the timing of deposits. Will they be done monthly or
quarterly?
Ms. Hoyle responded staff is still considering options. It will likely be done
through payroll deduction.
Ms. Hoyle stated that after the first infusion of funds into the HSAs on January
1, it would be done bi- weekly, through payroll contribution, equal to the balance
of the contribution. For family coverage, with HBC participation base, one
would receive $75 per pay period in the HSA. It would be $37.50 per pay
period for single.
Ms. Chinnici - Zuercher stated that the $375 and $750 is the maximum amount
being given to the employee in their HSA.
Ms. Hoyle stated that the whole year amount is $1,125 and $2,250.
Vice Mayor Salay asked about the amount per key health factor — is it $150
each quarter?
Ms. Hoyle stated that staff is proposing that the deposit be made at the time it is
earned. If two were earned at open enrollment, the entire amount would be
deposited on January 1. That makes the incentive more valuable.
Ms. Hoyle summarized that, based on the scenario proposed, the City's funding
of the plan in 2011 would equal about $895,000, depending upon how many
results -based incentives are earned. $720,000 of that is participation -based
and 97 percent of employees currently participate in Healthy by Choice. The
remaining $175,000 is dependent upon the key health factors earned.
Mrs. Boring stated that those not participating in Healthy by Choice receive no
funds in their HSA.
Ms. Hoyle responded that is correct.
Vice Mayor Salay asked how the funds can be expended. Will the employees
need to turn in receipts for reimbursement?
Ms. Hoyle responded that a bank will be set up for the HSAs. It will be up to
the employee to determine what works best for them — debit card, checks, etc.
Most employees will opt for a debit card.
Mr. Keenan asked if a mutual fund option will be provided.
Ms. Hoyle responded that there has been some discussion with banks, but she
is not aware of other investment options.
Administrative Committee of the Whole
May 10, 2010
Page 10
Mr. Keenan stated that most of the plans have a $2,000 minimum threshold
before it can be done, but the funds can be placed in any number of vehicles,
similar to a 401 K or pension plan.
Ms. Hoyle noted that a bank raised this as a potential option after a certain
minimum amount is available in the fund. Staff has not entered into any
agreements with a bank.
Mayor Lecklider asked if staff has calculated the potential increased liability for
the City to cover dependents up to age 26 through the new health law.
Ms. Hoyle stated that she and Ms. Ruwette will participate in a webinar shortly
regarding the new requirements. An audit of dependents on the City plan will
be done this year to understand the potential range of liability for this coverage.
Much more will be known in the coming year. Ohio's law requires dependent
coverage up to age 28, but federal law is age 26.
Mr. Keenan noted that the child cannot be eligible for any other medical plan.
Ms. Hoyle stated that when the Plan design meetings for 2011 take place, more
information will be available. The family deductible would not change, however,
even if older dependents are covered.
Ms. Chinnici - Zuercher asked for clarification: staff is recommending that for
single coverage, the HSA would be funded on January 1, 2011 with $375 or 1/3
of the total contribution from the City.
Ms. Hoyle stated that is correct.
Ms. Chinnici - Zuercher asked if the remainder of the contribution would be
deposited over the pay periods throughout the year.
Ms. Hoyle responded that is correct.
Ms. Chinnici - Zuercher asked why this would not be done quarterly, which would
be much more efficient.
Ms. Hoyle responded that if a person left employment with the City, the money
in the HSA is the employee's. There are some tax issues if an employee
receives a lump sum from the City HSA and was no longer covered by an HSA
and high deductible health plan. By spreading the deposits over the year, the
liability is minimized.
Mr. Keenan noted that an employee could keep the HSA intact and use it for
qualifying expenses.
Ms. Hoyle stated that is correct. But one could not add to the HSA if one is not
covered by a qualified high deductible health plan.
Mrs. Boring asked what happens to the HSA account when the account owner
dies.
Ms. Ruwette responded that it would transfer to the spouse. She believes that
if there are dependents, there is a six -month window prior to closing of the
account. It depends upon the beneficiary situation.
Administrative Committee of the Whole
May 10, 2010
Page 11
Mrs. Boring asked what the average employee spends per year on health care
expenses.
Ms. Hoyle responded that staff is gathering this information. Information from
United HealthCare is only from the first quarter of 2010, and so it is difficult to
project. Staff will provide such an estimate, once the data is available.
Vice Mayor Salay asked how the coordination of benefits works with the Plan.
Ms. Ruwette stated that for the owner of the HSA, the employee is not eligible
to be covered on a spouse's traditional plan. However, if the spouse has a
traditional plan, they can still be covered as secondary under the City's plan.
The spouse's plan would pay for their medical expenses, and anything
remaining would be covered by the Dublin plan — but the high deductible would
apply. Therefore, in general, the secondary coverage would not provide much,
if any, funding until the deductible is met. However, an employee can use
funds from their HSA to pay for the spouse's co- insurance that is not covered.
Vice Mayor Salay asked what occurs with dependent children coverage.
Ms. Ruwette stated that if another plan is available in the family, the dependent
children can be covered under both plans. The employee would need to decide
which plan would be primary.
Vice Mayor Salay asked if the birthday rule determines the primary coverage.
Ms. Ruwette stated that she needs to research this. It may be that regardless
of which plan is primary, the HSA funds could be used to cover expenses.
Ms. Hoyle stated that staff is requesting a motion to approve the proposed
funding level for HSAs and timing of deposits in 2011 in order to move forward
with communication to employees.
Mrs. Boring asked if the original plan was to fund the $3,000 totally and then
move into a stepped plan.
Ms. Hoyle responded that the original plan for 2010 implementation was to not
introduce the results -based plan until year two. However, given an entire year
to communicate the new Plan, staff felt it was appropriate to move to the
results -based plan in the first year of implementation.
Ms. Chinnici - Zuercher asked for clarification. The annual deductible for the
plan is $2,500 for single and $5,000 for family for 2011. What is the current
deductible?
Ms. Hoyle responded that the City currently has no deductible in the plan.
Ms. Chinnici - Zuercher stated that the staff is recommending that the City
deposit what could potentially amount to $1,725 with all four factors met, but
would amount for certain to $1,125 for a single employee in their HSA in 2011.
Potentially, then, the gap between $1,725 and $2,500 deductible is $775 and is
Administrative Committee of the Whole
May 10, 2010
Page 12
the only additional cost that an employee will pay over what they currently pay,
and an HSA will be available to them. How does this work annually? Will the
City eventually reduce the amount they deposit into the employee's HSA, so
that the employee is responsible for a greater amount toward their deductible?
Ms. Hoyle responded that every year, staff will review claims experience, the
insurance fund, the employee's cost for insurance, and HSA balances, and
then the City can determine each year the contribution to be made to an
employee's HSA. The caveat is that a new employee may be considered
differently in this program.
Mr. Harding added that some cities have a step program, where the first year is
funded at a higher rate, with lower funding in the following years. That is not
unusual.
Ms. Hoyle stated that, conversely, with employee behavior change, the claims
may decline and this would require further evaluation going forward.
Ms. Chinnici - Zuercher asked what is the goal of this new Plan, if the City is not
trying to place more responsibility on the employee for their health insurance
costs.
Ms. Hoyle responded that the goal is to reduce the growth in claims and health
care costs. The study done for the City indicated that, based on using this
Plan, the claims would be reduced between 22 and 29 percent. This would
translate to over $1 M in expense.
Ms. Chinnici - Zuercher asked why the City would then place more funds in an
HSA for an employee, if the claims actually decline.
Ms. Hoyle responded that the City may not do so. It will require an evaluation
each year.
Mr. Keenan asked if the deductible will be increased each year under the law.
Currently, he believes it is $2,500 and $5,000 and the minimum is $1,250 for
single and $2,500 for family. They do adjust them, so conceivably, the City
may have to raise their deductible to be in compliance with the law.
Ms. Hoyle stated that is correct. So instead of changing the funding of the
HSA, the City would raise the deductible.
Mrs. Boring stated that if 10 percent of the employees generate 90 percent of
the claims, this 10 percent immediately meets the annual deductible. Under
this plan, some of the average users will pay for all of their medical costs.
Ms. Hoyle responded that it depends. For very low users, the HSA funds from
the City will be used to pay their claims and they won't even reach their
deductible.
Mr. Keenan stated that there is extensive wellness care covered under the
Plan.
Administrative Committee of the Whole
May 10, 2010
Page 13
Ms. Hoyle added that preventive /wellness care is 100 percent covered in the
plan. The well baby care is considered preventive and the age- appropriate
wellness items are covered at 100 percent as well.
Committee Recommendation
Vice Mayor Salay asked if Council wants to proceed to vote on the
recommendation, or if they need additional information prior to doing so.
Mayor Lecklider moved to approve the HSA funding as proposed by staff.
Mr. Gerber seconded the motion.
Vote on the motion: Mr. Gerber, yes; Mr. Keenan, yes; Mrs. Boring, yes; Ms.
Chinnici - Zuercher, yes; Mayor Lecklider, yes; Mr. Reiner, yes; Vice Mayor
Salay, yes.
The meeting was adjourned at 6:58 p.m.
Clerk of Council