Explanation
BACKGROUND:
Funding for medical and prescription drug (Rx) insurance is necessary to insure continuation of the city’s medical and Rx insurance program. Included within the medical program are COBRA and tobacco cessation services. Insurance programs must be maintained in accordance with the negotiated labor contracts. The Human Resources Department initially contracted with United Healthcare Insurance Company for three years with the option of two - one year renewals. The contract originated on February 1, 2020. Due to an aggressive offer from United Healthcare Insurance Company, the Human Resources Department requests to contract with United Healthcare Insurance Company for two years instead of two - one year renewals, from February 1, 2023 through February 28, 2025. The Human Resources Department also requests funding from February 1, 2023 through January 31, 2024 for this program.
Cost estimates for 2023 are based on 2021 and 2022 benefit fund expenditures, using an average of actual city utilization, expected changes due to union negotiations, as well as input from the City's employee benefits consultant. The Human Resources Department requests to renew a contract with United Healthcare Insurance Company and to provide for funding February 1, 2023 through January 31, 2024.
Outside of the United Healthcare Insurance company contract, but included in the medical program appropriations, are the annual PCORI fee appropriations at $65,000.
The maximum obligation liability for medical, Rx, COBRA, tobacco cessation services, and PCORI fees from February 1, 2023 through January 31, 2024 is $216,327,000.00.
This ordinance is contingent on the passage of the 2023 insurance appropriation ordinance 3284-2022.
Emergency action is requested to ensure the programs for city employees and eligible terminated participants are able to commence as soon as contractually possible, thereby maintaining continuity of service.
FISCAL IMPACT: Funding is available in ...
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