TOWN OF LOS ALTOS HILLS StaffReport to the City Council

Transcription

1 AGENDA ITEM #7.D TOWN OF LOS ALTOS HILLS StaffReport to the City Council July 31,2012 SUBJECT: FROM: APPROVED: AMENDMENTS TO THE CITY COUNCIL ADOPTED EMPLOYEE CLASSIFICATION AND COMPENSATION PLAN Robert Stout, MRG Project Manager lc.c>l. f"d2- \Z.-S Richard Lee, Finance Manager \~\)\...- Carl Cahill, City Manager t.t. RECOMMENDATION: That the City Council: Amend the adopted Employee Classification and Compensation Plan to: 1. Cap the Town's contribution to its Cafeteria Flexible Benefit Plan for all employees beginning January 1, 2013; and 2. Authorize continuation of the grant funded Employee Wellness program for BACKGROUND: The City Council had directed staff to recommend modifications to the Town's employee compensation package that would reduce Town costs and be more fiscally sustainable while maintaining the Town's competitiveness as an employer. The City Council's Ad Hoc Committee on Employee Benefits (Committee) working with staff reviewed the benefits packages of 11 peer agencies throughout the Bay Area. Upon completion of that review, the Committee recommended changes to the method the Town's uses to compute the City's contribution to the Cafeteria Plan for employees and eligible retirees.- DISCUSSION: As oflast year, the Town, as part ofits Cafeteria Flexible Benefit Plan, allowed employees to choose from a variety ofmedical plans, but the Town's contribution to the cost of these plans was "capped" at the rates charged by Kaiser Permanente (Kaiser). The Town contributed 100% of the cost of the Kaiser plan whether the coverage was for the employee, the "employee plus one", or the "employee plus two". However, the cost of medical coverage has continued to rise much faster than inflation. Moreover, it has become accepted practice in both public and private sector to require employees to pay for all or a portion of dependent coverage. For calendar year 2013, the Committee recommends that the Town continue to pay 100% of the employee premium cost at the Kaiser rate and that

2 the increase in premium cost for dependent coverage, based on the Kaiser rate, be paid by the employee. For example, the Kaiser monthly rate for "Employee plus one" for calendar year 2013 will increase from $1, to $1, The Town's monthly contribution will be $1, and the employee's monthly contribution will be $ The Kaiser monthly rate for "Employee plus two" for 2013 will increase from $1, to $1, The Town's monthly contribution will be $1, and the employee's monthly contribution will be $ For other more expensive plans, the employee's contribution would necessarily increase. The proposed schedules amend the adopted documents governing employee compensation to incorporate the Committee's recommendations: 1. Section Cafeteria Plan. The proposed amendment caps the Town's contribution to the cafeteria plan beginning January 1,2013 as follows: Level of coverage Monthly Flexible Dollar Amount Employee $ Employee plus one $1, Employee plus two or more $1, In comparison to the attached Public Employee Benefit Survey from comparable agencies, the proposed modifications to Town's cafeteria plan will continue to provide a roughly equivalent benefit package. Staff estimates that the annual savings to the Town from these changes in will be approximately $15,576. In addition, staff proposes the following changes to Section 3.2 ofthe Classification and Compensation Plan which removes the references to the annual contribution amount, estimated to be $115 a month for Thus, the need to adjust this section every year to reflect the annual PEMCHA increase in cost is eliminated. The proposed revision is to be read as follows: 2. Section Designated Health Contribution Toward Health Premium. The Town contracts with PEMHCA for health insurance and pays the minimum monthly health contribution toward the health premium. The rate is established by PEMHCA on an annual basis for eligible employees, elected officials and qualifying retirees. This required minimum PEMHCA contribution for health changes annually and is included in the Cafeteria Flexible Benefit Plan amount described in Section 3.1. No changes are currently proposed for Section 3.3 Dental Plan or Section 3.4 Vision Plan. The Town currently pays the cost for the employee (not retirees) and their 2

3 dependents for both of these relatively inexpensive ($42,720 for Fiscal Year ) programs. Staff proposes the following changes to Section 3.2 of the Classification and Compensation Plan to read as follows: 3. Section Employee Wellness. Permanent full-time employees with at least one year of service to the Town are eligible for an employee wellness allowance in for programs, activities and equipment that promote good health. Guidelines for the program will be established by the City Manager. This benefit is made possible by a grant from the Town's Worker's Compensation insurer and is available only for FISCAL IMPACT: The total estimated cost to the Town for all medical benefits to employees and retirees for Fiscal Year is estimated to be $418,913 and these amounts have been included in the Town's Adopted Budget for Fiscal Year and are net of the $15,576 in savings due to the proposed modifications to the Town's Cafeteria Flexible Benefit Plan discussed above. ATTACHMENTS: 1. Resolution 2. Monthly Premiums for Contracting Agencies - Bay Area Region; effective date / Public Employee Benefit Survey 3

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5 Attachment 2 Monthly Premiums for Contracting Agencies Bay Area Region Alameda, Amador, Contra Costa, Marin, Napa, Nevada, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma, Sutter, Yolo, Yuba Effective Date: 1/1/ /2013 Basic Monthly Rate (B) Employee Plan Employee & Plan Employee & Plan Ifyou are '* PLAN Only Code 1 Dependent Code 2+ Dependents Code Blue Shield $ $1, $2, Blue Shield Advantage , , Blue Shield NetValue , , Blue Shield NetValue Advantage , , Kaiser , , PERS Choice , , PERS Select , PERSCare 1, , , PORAC , , Supplement/Managed Medicare Monthly Rate (SM) Employee Plan Employee & Plan Employee & Plan Ifyou are '* PLAN Only Code 1 Dependent Code 2+ Dependents Code Blue Shield $ $ $ Blue Shield Advantage Blue Shield Net Value Blue Shield NetValue Advantage Kaiser PERS Choice PERS Select PERSCare , PORAC , Combina:tionMonthly.Rate If you are '* Employee in 8M Employee & Plan Employee in 8M Plan 1 Dependent in 8 M Plan PLAN 1 Dependent in B Code 2+ Dependents in B Code 1+ Dependents in B Code Blue Shield $1, $1, $ Blue Shield Advantage 1, , Blue Shield NetValue , Blue Shield NetValue Advantage , Kaiser , PERS Choice , , PERS Select , PERSCare 1, , , PORAC , , Ifyou are '* Employee In B Plan Employee in B Plan Employee & 1 Dependent in B Plan PLAN 1 Dependentin 8 M Code 2+ Dependents in 8M Code 1+ Dependents in 8M Code Blue Shield $1, $1, $1, Blue Shield Advantage 1, , , Blue Shield NetValue , , Blue Shield NetValue Advantage , , Kaiser , , PERS Choice , , PERS Select , , PERSCare 1, , , porac , , /10/12

6 Public Employee Benefit Survey Updated 3/5/2012 Attachment 3 Agency Medical Dental Vision Employee Contribution Life Insurance Los Altos Hills $61O.44EE $ 53 Emp. $ 8EE $ - =toannuaj EE's hired prior (0 10/07 - same as salary actives $ EE+I $110EE+1 $12EE+I $ EE's hired after I0/07 ~ CalPERS min $ EE+2+ $168EE+2+ $21 EE+2+ $ CM ~ $300,000 Los Altos Maximum benefit of $1562 Emp. N/A Excess ofsl,225 per Basic Life and CalPERS min of$61.60 $1416 month AD&D $1041 EE Depend Portola Valley $610.44EE $ 83EE $ 10EE $0 EE & dep. up to None None Kaiser limit EE picks up costs orany benefit enhancement $ EE+I $159EE+I (coversee $0 Cost for EE for only) dentav vision $ EE+2+ $236 EE +2+ EE pays costs for dep. Atherton $610.44EE $143 entire family $ 10 Emp. Misc. 5% $ 50,000 All EE Yes, 90%. $ EE+I 16.Emp.+l Mgmt. -0- $ EE Emp.+2 (Mgmt. will soon change $140,OOOCM to sliding scale) Woodside Town pays full amount Self-Insured; $ 8EE; $ 27 SO cost for BE; EE pays Annual salary up Yes ofee medical; $ ISO $1,500 cap per 2+ depend. for dep. coverage as to $60,000 Toward dep. Coverage person; BE pays shown $40 mo. for 1 dep.l$75 mo. for 2 or more dep. Hillsborough $ 581 EE $ 45EE $ 8EE $0 for dental & vision $100,000 for Yes for EEs' hired before 2002 only mise 1,162 EE+1 90EE+1 $ Sforeach $ for amt over medical $75,000 for PD dep. cap (Blue Shield 1,511 EE EE+2+ Dept. heads receive amount equal to annual salary Tiburon Management - $1125 $68.52-EE N/A EE pays amount over 5.30 $15K Based on years ofservice. Max amount cap rate. policy is Kaiser single rate at time of Mid-Management - $ EE+1 retirement. New hires have no retiree $1075 &EE+2+ medical. SEill - $1050 Police - $ Sausalito $ EE $53.19EE $15.88EE Employee pays anything $20K 20 years ofservice age 55, Kaiser rate. over Kaiser rate employee only $ EE+1 $ EE+1 $21.22EE+1 $IOOKfor managers $ EE+2+ $ EE+2+ $34.94 EE+2+ Mill Valley $1567EE $64.74EE N/A Employee pays anything PD - $15, years ofservice~kaiser for over Kaiser rate employee +spouse. Management = 7.5 years ofservice EE+1 $ EE+1 FD-$20,000 EE+2+ $ Family All Else- $50,000 Family rate) Moraga Capped at Kaiser Family Delta dental paid $57.01 EE Employee pays anything Basic Life $1 OOK None Plan by TowII over Kaiser rate $99.34 EE+1 $ EE+2+ Piedmont $61O.44EE $63.04EE $16.19EE Basic Life: $ Retiree.135/1,000 $ Retiree+ 1 $ EE+I $ EE+1 $25.15 EE+1-0- AD&D: $ Retiree /1,000 $ EE+2+ $ Family $39.90 Family Long Tenn Dis:.300/100 of monthly payroll