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Staff Report
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Report To: General Government Committee
Date of Meeting: October 16, 2023 Report Number: LGS-027-23
Submitted By: Rob Maciver, Deputy CAO/Solicitor
Reviewed By: Mary -Anne Dempster, CAO Resolution#: GG-169-23
File Number:
By-law Number:
Report Subject: Health Benefit Program 2023 Renewal to November 1, 2024
Recommendations:
1. That Report LGS-027-23 and any related communication items, be received;
2. That the Health Benefit Program be renewed with Sun Life to November 1, 2024, at
an overall increase of 5.7%; and
3. That the Clarington Public Library, Museums & Archives be advised of the renewal
program, and that they continue to be invoiced for their portion of the benefit
program as applicable; and
4. That the Deputy CAO/Solicitor, in consultation with the Chief Administrative Officer,
be authorized to approve administrative agreements as required for the current and
future benefit renewals, subject to satisfactory service and acceptable terms with the
benefit provider(s).
Municipality of Clarington
Report LGS-027-23
Report Overview
Page 2
The annual renewal of the Health Benefit Program is presented for approval at an overall
rate increase of 5.7% for the period of November 1, 2023, to November 1, 2024. In addition,
this Report seeks approval to authorize the Deputy CAO/Solicitor, in consultation with the
Chief Administrative Officer, to approve the administrative agreements for the current and
future benefit renewals with the benefit provider(s), subject to satisfactory service and
acceptable terms.
1. Background
Existing Program for Health Benefits
1.1 The Extended Health (EHC) and Dental Benefits program with Sun Life remains under
an Administrative Services Only (ASO) funding formula. The non-ASO benefits which
include Life Insurance, Long Term Disability (LTD) and Accidental Death &
Dismemberment (AD&D) continue under the traditional funding formula.
Mosey and Mosey — Benefit Consultant
1.2 Mosey and Mosey is a leading benefit consultant in the municipal sector. In 2009 they
partnered with Local Authority Services (LAS), a multi -employer consortium to allow
individual municipalities to achieve reduced benefit costs through the increased
purchasing power of the overall group. There are currently over 34 municipalities
participating in this program.
1.3 Since 2019, the Municipality of Clarington has partnered with Mosey and Mosey in the
Local Authority Services (LAS).
2. The 2024 Program Renewal
2024 Rates and Overall Impact
2.1 Mosey and Mosey has undertaken negotiations with Sun Life to reduce the proposed
benefit program rate increase from 15.0% to 5.7%. The 2022 — 2023 annual renewal
was 7.9%.
2.2 The overall rate increase is impacted by increases to AD&D and claims experience with
Extended Health and Dental benefits. There is no change to Life Insurance and Long -
Term Disability (LTD) premiums.
Municipality of Clarington
Report LGS-027-23
3. Financial Considerations
Page 3
3.1 The Municipality has established the ASO Benefits Reserve Fund which can be used to
fund fluctuations in actual benefits and stabilize the tax impacts of health benefit costs.
3.2 At January 1, 2023 the opening balance in the ASO Benefits Reserve Fund is
approximately $1.5 million. This balance consists of returned premiums resulting from
surpluses in our claims history and would be used to fund any deficits to the plan.
4. Future Benefit Annual Renewals
4.1 In 2008 and 2012 Council provided authorization to the former Director of Corporate
Services to authorize annual benefit renewals provided the renewals were subject to
satisfactory service and the terms of the renewal were acceptable; meaning the change
in rates were in line with claims experience and general market conditions.
4.2 Since 2019 the annual renewals have been brought to Council for approval to
demonstrate the benefit of Mosey and Mosey's involvement, through the LAS program.
4.3 The last time the Municipality went to market was in 2016 resulting in a carrier change
to SunLife from Great West Life. Insurance costs to the Municipality are based on the
group's claims experience. When going to market insurance companies may discount
the first year to incent a change of carrier. In future years, based on claims experience
costs may rise at a higher -than -average number to reflect the true claims experience.
Therefore, in the long run the Municipality sees higher volatility in rates but no
significant savings in the long run as costs are based on claims. Therefore, frequent
change in providers is not recommended.
4.4 The partnership with Mosey and Mosey provides oversight of the benefit plan, offsetting
the need to have the benefit plan tested in the market. They regularly review the plan to
ensure that fees are in line with the market and as part of the LAS program our
experience is rated over the entire LAS group versus solely the Municipality, mitigating
the overall risk.
4.5 The Municipality is obligated to provide benefits to employees under the provisions of
existing employment contracts and collective agreements, as approved by Council. The
Municipality is required to provide the same type and level of benefits currently in place
and those negotiated in future rounds of bargaining.
4.6 Providing authorization to the Deputy CAO/Solicitor, in consultation with the Chief
Administrative Officer, to approve the annual renewals that are negotiated on our behalf
by Mosey and Mosey improves efficiency ensuring timely authorization of the
Municipality of Clarington
Report LGS-027-23
Page 4
administrative agreements for the benefit program renewals and reduces administrative
reporting to Council.
5. Concurrence
5.1 This report has been reviewed and contributed to, by the Deputy CAO/Treasurer who
concurs with the recommendations.
6. Conclusion
6.1 It is respectfully recommended that the renewal of the Health Benefit Program be
renewed with an overall 5.7% increase and that the Deputy CAO/Solicitor, in
consultation with the Chief Administrative Officer, be authorized to approve
administrative agreements with the benefit provider(s) for future renewals.
Staff Contact:
Lisa Wheller, Human Resources Manager, 905-623-3379 ext 2205 or Iwheller(c)_clarington.net
Kerri McMullen, Compensation & Benefits Supervisor, 905-623-3379 ext 2206 or
kmcmullen(a_clarington.net
Attachments:
Attachment 1 — Mosey and Mosey Monthly Renewal Rates and Cost Summary
Interested Parties:
The following interested parties will be notified of Council's decision:
The Clarington Public Library, Museums & Archives
Attachment 1 to Report LGS-027-23
Mosey and Mosey Monthly Renewal Rates and Cost Summary
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
All Divisions Combined
Basic Life Insurance
Lives &
Volumes
103,670,500
$
Cost
Monthly
Premium
27,475.63
Renewal Costs
Monthly
Premium
%
Adi•
$
NegotiatedBenefit
Renewal Costs
Monthly
Premium
27,475.63
%
Adi'
0.0%
$ 27,475.63 0.0%
Supplemental Life Insurance
16,237,000
1,867.26
1,867.26
0.0%
1,867.26
0.0%
Dependent Life
370
2,801.25
2,801.25
0.0%
2,801.25
0.0%
AD&D
88,892,500
1,688.96
1,955.64
15.8%
1,866.74
10.5%
Long Term Disability
1,925,565
84,126.71
96,744.82
15.0%
84,126.71
0.0%
Extended Health Care
Single
74
11,143.10
12,926.08
12,145.95
Couple
128
40,943.97
47,495.21
44,629.20
Family
249
99,364.24
115,262.55
16.0%
108,307.83
9.0%
Dental
Single
74
5,342.11
6,357.15
5,742.59
Couple
128
18,606.13
22,141.55
20,001.66
Family
249
56,732.60
67,512.20
19.0%
60,987.69
7.5%
TOTAL MONTHLY PREMIUM
$
350,091.96
$
402,539.34
$
369,952.51
TOTAL MONTHLY COST INCLUDING
PST
$
378,099.32
$
434,742.49
$
399,548.71
TOTAL ANNUAL COST - ALL BENEFITS
$
4,537,191.84
$
5,216,909.88
$
4,794,584.52
Variance To Current Cost
$
679,718.04
15.0%
$
257,392.68
5.7%
Mosey And Mosey Benefit Plan Consultants Page 1 of 7