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