07/06/1988 CITY COMMISSION SPECIAL WORK SESSION
HEALTH INSURANCE
July 6, 1988
The City Commission of the City of Clearwater met at City Hall, Wednesday, July 6, 1988, at 1:01 P.M., with the following members present:
Rita Garvey Mayor-Commissioner
James Berfield Vice-Mayor/Commissioner
Lee Regulski Commissioner
Don Winner Commissioner
William Nunamaker Commissioner
Also present were:
Ron H. Rabun City Manager
Cynthia E. Goudeau City Clerk
The Mayor called the meeting to order and the following items were discussed:
The City Manager introduced Bob Siver and Christine Swanson of Siver and
Associates. He stated that there is a 57% premium increase proposed by Gulf Life, the current major medical carrier for the City. The current policy expires August 1st, 1988. The
Manager also stated that his recommendation is to extend the coverage by Gulf Life until February which will cost the City an addition $546,000 in fiscal 88/89.
Mr. Siver stated that there has been a recent period of very sharp increases in insurance premiums due to cost shifting, decreasing hospital admissions and other impacts. He stated
currently the City of Clearwater offers four programs to its employees. He also stated that the single employee coverage group is subsidizing the dependent coverage, however there is
nothing wrong with that. The HMO renewals due in January of 1989 will probably also include a rate increase.
He stated the City is at a crossroads and must decide if the City has medical care coverage that it can no longer afford. He stated he is basically talking about a five-year restructuring
period to come up with a plan that will provide benefits for the employees and at the same time not be burdensome in cost. He stated there were four assumptions under which they are
working and those are: 1) that there will be no reduction in the benefits; 2) that there will be an increase in cost for the employees and dependents; 3) that there will be a fewer number
of HMOs offered and 4) there will be an effort to maximize the group size of the covered employees. He stated there needs to be an incentive to go to HOMs which are the most cost efficient
programs. He is currently recommending that the Gulf Life coverage be extended to February 1st, 1989 and there be some negotiation regarding the increase and that the City solicit proposals
for a new plan and require that it contain multiple options.
In response to a question regarding whether or not there is any effort being made at other government levels and the business community to deal with this problem, Mr. Siver stated that
Federal Government and State mandates are actually hindering local government's ability to provide cost efficient coverage. He feels that within five years there will only be five insurance
companies willing to deal with City government insurance.
Discussion ensued regarding various options and also other possible impacts upon the City's ability to provide insurance. Mr. Siver stated that the citys' options currently are to renew
the Gulf Life policy as is or to renew it long enough to come up with a new plan.
Concerns were expressed that employees' concerns would need to be addressed. It was stated that in the months of November and December communication is planned with the employees regarding
proposals.
In response to a question by Glenn Perry, CWA representative, it was stated that the plan is to eliminate at least two of the current HMOs offered. However, employees will be kept informed.
In response to another question by a Fire Department representative, it was stated that the HMOs being phased out and the care of patients under those programs would be worked out.
A question was raised regarding whether or not the increase that will occur on August 1st will be absorbed by the City or if the employee payment for dependent coverage would increase.
Consensus was to discuss this at a later time.
It was emphasized that City administration will make sure employees are kept informed regarding this issue.
The meeting adjourned at 2:57 p.m.