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B. Review Total Employee Compensation PackagePublic Works The city provides life insurance in the amount of lx salary. This coverage is bid 7901 Park Place out every 2 -3 years. In 2010, we switched carriers and reduced the premium by Phone: 952.227.1300 31 %. The total cost of this coverage to the city is $4,600 annually. Employees Fax: 952.227.1310 can choose to purchase additional insurance for themselves, their spouse or Senior Center dependants, at their cost. Phone: 952.227.1125 Fax: 952.227.1110 Short Term Disability Web Site The city does not provide a short term disability policy. Employees are expected www.ci.chanhassen.mn.us to manage their sick and vacation balances appropriately to deal with illnesses or Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow MEMORANDUM TO: Todd Gerhardt, City Manager CITY OF nn FROM: Laurie Hokkanen, Assistant City Manager �Ul�• CHANHASSFN 7700 Market Boulevard DATE: July 11, 2011 D PO Box 147 Chanhassen, MN 55317 SUBJ Total Employee Compensation BACKGROUND Administration Phone: 952.227.1100 As one of the 2011 Key Financial Strategies, the City Council directed staff to Fax: 952.227.1110 examine total employee compensation. The following is an explanation of the Building Inspections benefits offered to full -time city employees. Phone: 952.227.1180 Fax: 952.227.1190 Public Employees Retirement Association Engineering The city and its employees are mandated by the State Legislature to participate in Phone: 952.227.1160 the Public Employees Retirement Association (PERA). PERA is a defined Fax: 952.227.1170 benefit retirement plan. Most city employees fall into the Coordinated Plan, Finance under which employees contribute 6.25% of their pay and the city contributes Phone: 952.227.1140 7.25 %. If the employee leaves employment prior to retirement and requests a Fax: 952.227.1110 refund of PERA contributions, they may only receive the amount they contributed to the Plan. Park & Recreation Phone: 952.227.1120 Members are eligible for a full retirement at age 65. Retirement benefits are Fax: 952.227.1110 computed using a formula of 1.7 percent of the average of the high -five salary Recreation Center years for each year of service. To illustrate: 2310 Coulter Boulevard Phone: 952.227.1400 The average city employee earns approximately $60,000 per year. As an Fax: 952.227.1404 example, let's assume that city employee retires at age 65 with 25 years of service. Their annual pension benefit would be 42.5% of their high -five Planning & Natural Resources salary, or $2,125 of taxable income per month. Phone: 952.227.1130 Fax: 952.227.1110 Life Insurance Public Works The city provides life insurance in the amount of lx salary. This coverage is bid 7901 Park Place out every 2 -3 years. In 2010, we switched carriers and reduced the premium by Phone: 952.227.1300 31 %. The total cost of this coverage to the city is $4,600 annually. Employees Fax: 952.227.1310 can choose to purchase additional insurance for themselves, their spouse or Senior Center dependants, at their cost. Phone: 952.227.1125 Fax: 952.227.1110 Short Term Disability Web Site The city does not provide a short term disability policy. Employees are expected www.ci.chanhassen.mn.us to manage their sick and vacation balances appropriately to deal with illnesses or Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow Mr. Todd Gerhardt July 11, 2011 Page 2 events that would prevent them from working. Employees do have access to AFLAC if they wish to purchase short term disability insurance at their cost. Long Term Disability The city provides long term disability coverage that would replace 60% of the employee's income if they become disabled for more than 90 days. The annual cost of this coverage is $9,300 and was reduced by 39% through the 2010 RFP process. Dental Insurance The City provides access to dental insurance through a group policy, but does not contribute to the premium. Dental Insurance costs $28.50 per month for a single and $93.95 per month for a family. Health Insurance The city offers one plan design, a high - deductible plan with a health savings account. For single coverage, the City pays 100% of the premium and the $2,000 deductible. For families, the city pays 70% of the premium and $3,000 of the $4,000 deductible. The employee pays 30% of the premium and $1,000 of the deductible. The city has been pro- active in managing healthcare costs. In 2005, the city adopted the health savings account and in 2008 it became the only plan design offered. Through the H.S.A., the employee is responsible for the first $2,000/$4,000 of health expenses. The total city contribution for single coverage is $562.57 per month. The average among KFS cities is $513.15. The total city contribution for family coverage is $942.03 per month. The average among KFS cities is $913. g: \admin \lh \city council \2011 total compensation. doc City of Chanhassen Health Insurance Costs 2005 -2011 Year Provider Plan Type Family Rate Single Rate 2005 Medica Co -Pay $1,088.33 $405.89 2006 BCBS Co -Pay $1,142.50 $457.00 2006 BCBS H.S.A. $746.00 $298.50 2007 BCBS Co -Pay $1,221.50 $488.50 2007 BCBS H.S.A. $797.50 $319.00 2008 Medica H.S.A. $663.61 $265.52 2009 Preferred One H.S.A. $723.36 $289.43 2010* Preferred One H.S.A. $802.93 $321.27 2011 Preferred One H.S.A. $988.61 $395.57 H.S.A. Contribution - H.S.A Contribution - Single Family City Pays / Family Employee Pays/ Family City Pays /Single $0.00 $0.00 $761.83 $326.50 $405.89 $0.00 $0.00 $799.75 $342.75 $457.00 $167.00 $250.00 $772.20 $307.13 $465.50 $0.00 $0.00 $855.05 $366.45 $488.50 $167.00 $250.00 $808.25 $322.58 $486.00 $167.00 $250.00 $714.53 $282.41 $432.52 $167.00 $250.00 $756.35 $300.34 $456.43 $167.00 $250.00 $812.05 $324.21 $488.27 $167.00 $250.00 $942.03 $379.91 $562.57 * City Pays / Family calculated as follows: 70% of Premium (988.61 * 70% = 692.03) Add premium contribution and H.S.A contribution: $692.03 + $250 = $942.03 per month. 2011 Enrollment Opt -Out ($250 /mo) 6 Single Coverage 23 Family Coverage 38 Single Rate - 2011 City Plan Type Single Rate Dollars Paid by City Percent Paid by City Deductible Contribution Total Dollars Contributed by City Chanhassen H.S.A. $395.57 $395.57 100% $167.00 $562.57 Andover H.S.A. $352.97 $352.97 100% $145.83 $498.80 Champlin HRA /H.S.A $453.30 $426.84 94% $0.00 $426.84 Chaska HRA (1900/3700) $510.46 $511.00 100% $79.00 $590.00 Chaska HAS (2500/5000) $456.75 $590.00 129% $0.00 $590.00 Chaska $50 Co -Pay $553.23 $590.00 107% $0.00 $590.00 Farmington H.S.A. $437.28 $350.00 80% $110.53 $460.53 Farmington HRA (2500 /5000) $463.96 $403.44 87% $0.00 $403.44 Farmington HRA (1500/3000) $546.00 $546.00 100% $0.00 $546.00 Inver Grove Heights H.S.A. $392.50 $392.50 100% $153.50 $546.00 Lino Lakes unknown $311.47 $311.47 100% $0.00 $311.47 Prior Lake BXBS Triple Gold 80/20 $546.00 $546.00 100% $0.00 $546.00 Prior Lake BXBS Triple Gold VEBA $392.50 $392.50 100% $153.50 $546.00 Savage H.S.A. $312.36 $312.36 $78.24 $390.60 Savage Co -Pay $392.11 $392.11 $0.00 $392.11 Shoreview H.S.A. $366.02 $660.00 $150.00 $810.00 Family Rate - 2011 City Plan Type Family Rate Dollars Paid by City Towards Premium Percent Paid by City Deductible Contribution Total Dollars Paid by City Chanhassen H.S.A. 988.61 692.03 70.00% 250.00 942.03 Andover H.S.A. 917.70 697.45 76.00% 270.83 968.28 Champlin H.S.A. 1,028.99 968.92 94.16% 0.00 968.92 Chaska HRA (1900/3700) 1,434.82 699.00 48.72% 154.00 853.00 Chaska HAS (2500/5000) 1,283.53 853.00 66.46% 0.00 853.00 Chaska $50 Co -Pay 1,555.39 853.00 54.84% 0.00 853.00 Farmington H.S.A. 1,274.97 916.53 71.89% 0.00 916.53 Farmington HRA (2500/5000) 1,368.60 916.53 66.97% 208.33 1,124.86 Farmington HRA (1500/3000) 1,563.56 916.53 58.62% 125.00 1,041.53 Inver Grove Heights H.S.A. 1,141.31 675.87 59.22% Lino Lakes unknown 1,129.35 731.91 64.81% 0.00 731.91 Prior Lake BXBS Triple Gold copay 1,459.00 937.00 64.22% 0.00 937.00 Prior Lake BXBS Triple Gold VEBA 1 1,057.50 937.00 88.61% 0.00 937.00 Prior Lake BXBS Triple Gold VEBA 2 1,057.50 875.00 82.74% 0.00 875.00 Savage Co -pay 1,097.88 739.30 67.34% 0.00 Savage H.S.A. 874.60 624.60 71.42% 113.20 Shoreview H.S.A. 871.12 660.00 120.00 780.00 Average 1,182.61 805.51 69% 77.59 913.00 Median 1,129.35 853.00 67% 0.00 926.77