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File #: 39320    Version: Name: SUBSTITUTE Authorizing the City of Madison to move employees into the Deductible HMO-Standard PPO health insurance program option.
Type: Resolution Status: Passed
File created: 7/14/2015 In control: BOARD OF ESTIMATES (ended 4/2017)
On agenda: 9/1/2015 Final action: 9/15/2015
Enactment date: 9/21/2015 Enactment #: RES-15-00778
Title: SUBSTITUTE - Authorizing the City of Madison to move all employees into the Deductible HMO-Standard PPO health insurance program option 4 and to provide annual wage increases for employees in certain compensation groups.
Sponsors: Paul R. Soglin
Attachments: 1. Memo - Health Plan Design Change.pdf, 2. Original 39320.pdf, 3. Amendment2.pdf, 4. Amendment1.pdf, 5. Version 2.pdf, 6. Employee Associations Memo.pdf, 7. Health Care Costs - Proposed COLA.pdf, 8. Memo from General Employees Assoc.pdf
Fiscal Note
The City of Madison currently participates in the Wisconsin Public Employers (WPE) Group Health Insurance Program operated by the Wisconsin Department of Employee Trust Funds (ETF). This program allows access to HMOs in Dane County, including Dean, Group Health Cooperative, Physicians Plus, Unity-UW Health, and WEA Trust. The WPE enrolls 12,000 employees from municipalities and school districts throughout the state; the City of Madison represents approximately 20% of the total enrollment. The City's share of the program is approximately 40% to 50% of the total enrollment in Dane County.

The resolution would shift the City's participation from the Traditional Option under the program to the Deductible Plan offered by the WPE. Under the Deductible Plan, participating employees would pay the first $500 of costs under the single plan and the first $1,000 for a family plan. According to ETF, approximately 65% of WPE participants in the Deductible Plan pay the entire deductible amount. For a full-time City employee earning $40,000, the deductible for a single plan would represent 1.25% of earnings and for a family plan would represent 2.5% of earnings. At the average salary of $63,700, the deductible represents 0.8% of earnings for the single plan and 1.6% for the family plan. Since employees can choose to set-aside compensation in flexible spending accounts, up to federal tax law maximums, to pay out-of-pocket costs on a tax free basis, the share of earnings impact of deductibles can be reduced depending on an individual's tax status.

According to ETF, the Deductible Plan has premiums that are 5% less than the Traditional Option. Based on actual health insurance premiums paid by the City in 2014 and expected health care cost inflation, the Deductible Plan would save between $1.5 million and $1.9 million all funds (approximately 85% to 90% of the savings would be realized in the general fund) . The amount of premium paid by employees would also be...

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