San Angelo City Council November 6, 2012 Dental Insurance to Retirees
Dental Insurance for RetireesNovember 6, 2012
BackgroundDuring the self-insurance fund update to Council on September 18, 2012, Council requested that staff look into whether or not pre-65 and post-65 retirees (and their dependents) could be offered dental insurance coverage through the current provider, Delta Dental Insurance Company.
BackgroundCouncil also requested that the impact of adding retirees to the dental plan be identified and to research the associated cost.Presently the City covers 860 active employees/ dependents at an annual cost of $157,070.There are approximately 500 retirees who would be eligible to enroll if offered.
BackgroundAs was reported in September, 2012, six of the eight cities who responded to our inquiry, offer dental insurance to their retirees. Only one city (Wichita Falls) provides any funding to the retiree cost for coverage.
BackgroundDelta Dental Insurance Company has affirmed that they will allow coverage in their plan for pre-65 and post-65 retirees.The next 4 slides reflect current premiums, and 3 scenarios for retiree premiums.
Current Dental PremiumsCoverage Employee Cost/Month City Cost/MonthEmployee Only $0 $15.22Employee/Spouse $20.36 $15.22Employee/Child $29.34 $15.22Employee/Family $49.70 $15.22(860 employees * $15.22 * 12 mo = $157,070)
Retiree Absorbs Entire CostCoverage Employee Cost/Month City Cost/MonthEmployee Only $0 $15.22Employee/Spouse $20.36 $15.22Employee/Child $29.34 $15.22Employee/Family $49.70 $15.22Retiree Only $17.96 * $0Retiree/Spouse $41.98 * $0Retiree/Child $52.58 * $0Retiree/Family $76.61 * $0*premiums are 18% higher than total cost for active employees(includes City cost and increase due to retiree status). There is noincrease to the City with this option.
City Absorbs Total IncreaseCoverage Employee Cost/Month City Cost/MonthEmployee Only $0 $16.74Employee/Spouse $20.36 $16.74Employee/Child $29.34 $16.74Employee/Family $49.70 $16.74Retiree Only $0 $16.74Retiree/Spouse $20.36 $16.74Retiree/Child $29.34 $16.74Retiree/Family $49.70 $16.74Employees and retirees pay identical premiums.(860 + 500 covered * $16.74 * 12 mo = $273,197, for an increaseof $116,127)
Employees & Retirees Absorb Total Increase City Absorbs Cost for Extra Lives CoveredCoverage Employee Cost/Month City Cost/MonthEmployee Only $1.52 $15.22Employee/Spouse $21.88 $15.22Employee/Child $30.86 $15.22Employee/Family $51.22 $15.22Retiree Only $1.52 $15.22Retiree/Spouse $21.88 $15.22Retiree/Child $30.86 $15.22Retiree/Family $51.22 $15.22Employees and retirees pay identical premiums. Increased Citycost for 500 extra participants = $91,320.($91,320 + $157,070 = $248,390)
Council Direction Staff is seeking direction from the City Council on whether or not to offer dental insurance to retirees; and if so, which premium scenario should be utilized.If approved, dental coverage will be offeredto retirees during open enrollment later this month, to become effective 1/1/13.