Explanation
BACKGROUND: To maintain the insurance programs in accordance with the negotiated labor contracts, it is necessary to modify the existing contract and to make additional appropriation for the continuation of the medical claims program. Additional appropriation is needed due to higher than projected medical insurance claims.
In January, 2016, $123,160,769 was appropriated in the Employee Benefits Fund, fund 5502, to United Healthcare for the 2016 contract year; however, actual claims experience has been higher than projected thereby necessitating additional appropriation to meet the additional medical claims expenses. An additional $5,000,000 is needed at this time.
Contract compliance number:31-1142815
This ordinance reduces $2,400,000 from various documents. It is then necessary to transfer $2,400,000 between subfunds in the Employee Benefits Fund. In addition, this ordinance increases fund 5502, subfund 550206, by $2,600,000 from the unencumbered cash in Fund 5502.
FISCAL IMPACT: An analysis of revenues and expenditures for the remainder of the contract period shows a cash balance in the employee benefits fund sufficient to support this increase in appropriation.
Emergency action is requested to ensure the medical claims program for city employees is able to commence as soon as contractually possible, thereby maintaining continuity of service.
Title
To authorize the City Auditor to reduce current encumbrances by $2,400,000.00 and appropriate $2,600,000.00 from within the unappropriated balance of the Employee Benefits Fund; to authorize the City Auditor to transfer $2,400,000.00 in appropriation between subfunds in the Employee Benefits Fund; to authorize the Director of Human Resources to modify the existing contract with United Healthcare; to authorize the expenditure of $5,000,000.00 from the Employee Benefits Fund, or so much thereof as may be necessary to pay the costs of medical insurance claims; and to declare an emergency. ...
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