Memorandum

City of Lawrence

Human Resources Division/City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	Lori Carnahan, Human Resources Manager
CC:	Diane Stoddard, Assistant City Manager Michelle Spreer, Benefits Specialist
DATE:	August 5, 2013
RE:	Employee Healthcare Plan 2014

We request approval for the following items regarding the Employee Healthcare Plan, all items to be effective January 1, 2014.  Background information is contained in the 2014 Employee Healthcare Plan Budget Memo dated May 8, 2013.

• Maintain current vendors for medical, dental and prescription drug coverage.

• Modify plan eligibility rules to allow benefits for domestic partners.

• Maintain 2013 employee contribution levels for 2014.

• Maintain retiree contributions at the 80% of the 2014 premium equivalent to be established in October 2013.  It is projected this will require an increase of approximately 3%.

As a part of the 2014 recommended budget, the City Manager maintained the 2013 city contribution level to healthcare plan for 2014.

In addition to approvals requested above the following changes are scheduled to be put into effect January 1, 2014.

• Increase the deductible to $1,000 individual/ $2,000 family with the out of pocket maximum going to $1,600 individual/ $3,200 family (including deductible). 

• Increase the Health Reimbursement Account (HRA) maximum balance to $1,600, regardless of coverage level (single or family).

• Provide coverage for certain bariatric surgeries per Cigna medical coverage policy for bariatric surgery. 

The following were incorporated previously this year.

• Increase in the requirements to receive wellness incentives (rolled out with the January 2013 wellness program).

• Coverage for elected officials (incorporated June 1, 2013).

Action Request

Authorize City Manager to sign 2014 contracts with Cigna, Delta Dental and Medtrak; modify plan eligibility rules to cover domestic partners; establish 2014 employee contributions at the 2013 level; establish 2014 retiree contributions at 80% of the 2014 premium equivalent.