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Bay City council approves 3% renewal for employee medical plans
Summary
Council approved renewal of the city's employee benefits plan, keeping ancillary coverage unchanged; staff said the pool reduced volatility and limited the city's increase to about $43,000 total.
Bay City Council approved a 3% renewal for the city's medical plans on a motion and second during its meeting. The council voted to continue with the city's employer pool for medical coverage and to keep dental, vision and life insurance premiums unchanged.
City staff presented the recommendation. Rhonda Clay, a city staff member, told the council the pool delivered earlier renewals and lower volatility than prior fully insured renewals, saying, "No hassle. No back and forth. It was actually quite refreshing." The staff packet recommended remaining with the pool and approving a 3% increase in medical plan rates.
The renewal will increase the city's medical plan costs by about $43,000 in total; staff estimated roughly a 60/40 split between the general fund and the utility fund, or about $26,000 to the general fund and $13,000 to the utility fund. Clay said the ancillary benefits'dental, vision and life'will have no premium changes.
Donald Coronado, a Texas Health Benefits representative, explained how the pool spreads large claims across a bigger membership and reduces year-to-year swings. He said the city's 12-month loss ratio was about 113% and that placing large claimants in the pool helped bring renewal rates down: "the pool really grabbed that and brought it back down to the plus 3. Really helped you guys out." Coronado described the pool mechanism as absorbing high-cost claim shocks that could otherwise cause large single-year increases.
Staff also read monthly premium changes for employees and dependents. For the HMO plan, staff reported no change to employee-only premiums; approximate monthly increases for dependents were $4.62 for spouse coverage, $4.00 for employee + child and $6.71 for family coverage. For the PPO plan, staff reported approximate monthly increases of $4.70 for employee-only, $9.54 for employee + spouse, $8.27 for employee + child and about $13.87 for family coverage. Staff characterized the per-employee changes as small.
Council members asked about employee satisfaction and the split of the increased cost between funds; staff and the Texas Health representative answered questions on loss ratios, pool mechanics and premium amounts. The council moved, seconded and voted to approve the recommendation to renew the city's participation in the pool and the 3% medical increase.
The approval directs staff to implement the renewed benefits plan and to continue ancillary plans at current premiums. Staff did not present a separate ordinance or further conditions at the time of the vote.
