AGENDA #2b

 

BUDGET WORKING PAPER

 

TO:                  W. Calvin Horton, Town Manager

 

FROM:            Pam Eastwood, Director of Human Resources

 

DATE:             April 28, 2004

 

SUBJECT:       Information on Costs of Providing Group Health Insurance Coverage for Mayor and Council on the Same Basis as for Full-time Employees

 

 

A Council member asked for information on the costs of providing group health insurance coverage for the Mayor and Council members on the same basis as for full-time employees.

 

The current Town health insurance carrier has said that it is willing to allow the Town’s insurance contract to be revised to include Council members on the same basis as other employees; however, because of the terms of their contractual filing in the State, the Town would need to pay the share of the premium equivalent to that portion paid for other employees. The Town may designate Council members as either part-time or full-time employees in accordance with the group insurance plan.  

 

• For Town employees who work full time 37.5 to 40 hours, the Town pays 100 % of the employee cost and 50 % of the cost for family coverage.

 

• For Town employees who work at least 30 hours per week but less than full time, the Town pays 75 % of the employee cost and 37.5 % of the cost for family coverage.

 

• For Town employees who work at least 20 hours per week but less than 30, the Town pays 50 % of the employee cost and 25 % of the cost for family coverage.

 

• Temporary Town employees are not eligible for coverage in the group health insurance plan.

 

The current contract with the insurance carrier would require that Council members elect coverage within 30 days of first eligibility, such as within 30 days of being sworn in or within 30 days of the benefit first being offered.  After 30 days, health insurance would not be approved without a medical examination.  These are the same rules governing the health insurance policies for all Town employees.

 

The Council voted in May 2003 to make the Mayor and Council members eligible for coverage in the Town group health insurance plan on the same basis as for half-time employees. Since that time, five members have enrolled in the Town plan.

 

Costs

 

If the Council decides to provide health insurance coverage for Council members in the new budget year, the costs would be:

 

	2003-04 ANNUAL TOWN COST	2004-05 ANNUAL TOWN COST	2003-04 COST FOR  COUNCIL MEMBERS	2004-05 COST FOR COUNCIL MEMBERS AT 20 HR RATE	2004-05 COST FOR COUNCIL MEMBERS AT 30 HR RATE	2004-05 COST FOR COUNCIL MEMBERS AT FULL TIME RATE
FULL TIME EMPLOYEE ONLY	$  3,638	$  4,072
30 HRS WK EMPLOYEE ONLY	$  2,729	$  3,054
20 HRS WK EMPLOYEE ONLY	$  1,819	$  2,036	$  16,372	$     18,325	$     27,487	$     36,650
FULL TIME EMP/FAMILY	$  6,870	$  7,690
30 HRS WK EMP/FAMILY	$  5,153	$  5,768
20 HRS WK EMP/FAMILY	$  3,435	$  3,845	$  30,917	$     34,605	$     51,908	$     69,210

 

Next steps: The Council could make its members eligible for health insurance benefits on the same basis as fulltime employees by amending the Town’s personnel ordinance; the Manager would then revise the contract with the Town’s health insurance provider.