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HomeMy WebLinkAbout01/12/1993 Adjourned Meeting 93 CITY OF YAKIMA, WASHINGTON JANUARY 12, 1993 ADJOURNED MEETING The City Council met in session on this date at 7:00 a.m. in the Board Room at the Yakima Center, Yakima, 'Washington. Mayor Pat Berndt, presiding, Council Members Lynn Buchanan, Skip Semon and Bernard Sims present on roll call. Council Members Clarence Barnett, Henry Beauchamp and Bill Brado absent. City Manager Zais, Assistant City Manager Rice, and City Clerk Roberts also present. The AFSCME Joint Medical Insurance Committee members present were Bob Desgrosellier, Nancy Gaudette, John Hanson, Dave Hussell, Clara Sanders, Sheryl Smith, Jerry Sweesy, and Mel Young. Also present was Dan Fisher from Direct Administrators. 1. INFORMAL DISCUSSION AMONG COUNCIL MEMBERS Prior to the discussion regarding AFSCME insurance, Mayor Berndt requested staff introduce themselves. Assistant City Manager Rice commented that this committee, started over two years ago, was formed as a result of the AFSCME contract to discuss health care issues. John Hanson reported on the history of the City's self - insurance plan, which began in 1979. The City is self - insured, but carries stop loss insurance for individual claims over $100,000 at a cost of $100,000 per year. The City is also protected by aggregate stop loss insurance. There are seven individual self- insured plans within the City. Direct Administrators has been the City's third party administrator since 1983. Dan Fisher stated his role has been to provide information to the committee. City Manager Zais interjected that through collective bargaining with the various bargaining groups, there is a mishmash of insurance coverage for the employees, resulting in separate rating of costs. The largest group is AFSCME. There has been some thinking that these groups, with the exception of Fire and Police LEOFF employees, could be combined with uniform benefit levels. Staff responded to Council Member Sims' questions regarding the insurance benefits, premiums and the activities of the Wellness Committee. It was pointed out that some employees will file claims with the City's insurance plan rather than complete th'e paperwork to file a workers compensation claim, while there are those who will file a workers' compensation claim instead of filing a claim with the City's insurance plan in order to get the 100% coverage. This impacts the premium. Jerry Sweesy stated the Committee was formed for the purpose of studying Division Seven insurance benefits and keeping communication open with the employees in order to assist them in understanding the plan and their benefits. Mr. Fisher stated that when the City initiated premium cost - sharing with the employees, the employees became more interested in their plans. The Committee now understands how their rates are set. An 18 month rolling average is used to set rates; claims divided by the number of participants. A discussion ensued on the pros and cons of using preferred providers. There 1 94 JANUARY 12, 1993 ADJOURNED MEETING is a shortage of primary health care physicians, which is not conducive to a preferred provider program. Sheryl Smith distri a chart on the calculation method used for Division Seven medical and vision coverage for approximately 1300 active and retired employees. The same methodology is used for dependent coverage. Mr. Hanson spoke briefly about the decreased level of reserves this year=due to two claims which exceeded the stop loss amount. There have also been about 5 -6 claims which averaged $40,000. Mr. Sweesy reviewed the costs for 1989, 1990, 1991, and 1992. He commented that while $400,000 has been put in the plan reserves over that time, the Committee can see the need for a $1.5 million reserve. Mel Young reviewed the accomplishments of the Committee. The Committee reviewed the insurance handbook to become familiar with the benefits and what the cost would be outside a modified trust. The Committee then revised the handbook in order to identify the overall coverage in an easy -to- understand format. Plan options, other than the City's plan, including preferred providers, Blue Cross /Blue Shield, and a trust with Division Seven employees were also reviewed. The Committee reviewed the information they had learned about the insurance with the AFSCME employees and answered their questions. They had to show the employees how much money was going where, and who was paying for what. The Committee also explained the premium calculation formula to the AFSCME membership. The Committee also met with the City Manager, reviewed their recommendations, and answered his questions. Mr. Young reported that AFSCME had elected to let the employees at the Yakima Air Terminal join the AFSCME City employees insurance plan. The Fire Association formed its own medical committee and garnered a wealth of information from the AFSCME Committee. The Committee is looking at combining the groups to spread the costs and lower the premiums. (Mayor Berndt absent after 8:30 a.m.) Clara Sanders distributed copies of the Committee's recommendations, which were made after reviewing the Master Plan and doing other research. Basically, these are non -cost recommendations. One recommendation is to convert to a prescription drug card program. An employee would pay $4 for a Generic drug and $7 for a brand name drug. All prescription drugs are sold at wholesale cost minus 10%. Eventually, it will lower everybody's costs. The Committee is recommending vision coverage enhancement and a change in the dental carrier to the City Dental Plan. Another recommendation is to enhance the lifetime maximum amount, from $250,000 to $750,000 - $1,000,000; mental health benefit limitation changes, changes to the cosmetic, plastic and reconstructive procedures and pre- existing condition clause. One change needs to be made in the recommendation concerning plastic and reconstructive procedures to avoid eliminating coverage for an active claim, and the Committee is working on that revision. The Committee has to go back to the AFSCME membership on the prescription card and dental insurance carrier changes, after 2 95 JANUARY , 1993 ADJOURNED MEETING doing additional research 'and comparisons. Council Member Sims expressed concern about changing the lifetime maximum limit since other agencies could become involved once benefits reach or exceed the maximum insurance limit, limiting the City's liability. Mr. Hanson stated they are trying to make the plan equal to what it was in 1979, prior to inflation eroding the coverage. Mr. Sweesy spoke about the benefits of a combined insurance plan for all City employees, exclusive of LEOFF members. One large self - insured group can absorb the occasional catastrophic claim better than seven smaller groups. A transition plan would have to be developed to be reviewed by the different groups. The purpose of this meeting was to apprise Council of the goals and direction of this Committee. He added that Council might wish to consider medical coverage 'for themselves through this plan. Mr. Hanson stated it could be an option, even if they want to pay the premium themselves. Bob Desgrosellier highlighted the work of the Committee, the cost savings and benefits contained in the current plan, and stated the Committee is willing to meet with Council in the future. Council members expressed their appreciation for the Committee's hard work and for this report. Council member Sims stated that Council is not knowledgeable enough on this subject to agree to the negotiations of the contract change. Mr. Zais stated this was simply an introduction of this subject. Mr. Sweesy explained the objective of this Committee was to review the plan. The Committee's 'recommendations were explained to the AFSCME membership and they have given the president and negotiating team the ability to accept these recommendations and bargain with the City. . The meeting adjourned at 9:16 a.m. READ AND CERTIFIED ACCURATE BY: . <_ . / ! . _ ' ') QU►, IL M :ER / / DATE / 42' lq_3 -1111, COUNCIL MEMBER DATE ATTEST: C_Q-t A'4,3„,46 i "),e2A-6—w 1 /e-t CITY CLERK MAYOR 3