HomeMy WebLinkAboutCOD-019-20Clarington
Staff Report
If this information is required in an alternate accessible format, please contact the Accessibility
Coordinator at 905-623-3379 ext. 2131.
Report To: General Government Committee
Date of Meeting: October 19, 2020 Report Number: COD-019-20
Submitted By: Marie Marano, Director of Corporate Services
Reviewed By: Andrew C. Allison, CAO Resolution#: GG-366-20, C-437-20
File Number: By-law Number:
Report Subject: Health Benefit Program 2020 Renewal of ASO and Non-ASO Formula to
November 1, 2021
Recommendations:
1. That Report COD-019-20 be received;
2. That the Health Benefit Programs be renewed with Sun Life, to November 1, 2021 at
an overall net decrease of 4.4 per cent, with the realized surplus from the current
year to remain in the Municipal reserve fund; and
3. That the Library be advised of the renewal program, and that they continue to be
invoiced for their portion of the benefit program as applicable.
Municipality of Clarington
Report COD-019-20
Report Overview
Page 2
The annual renewal of the Health Benefit Program is presented for approval for the period of
November 1, 2020 to November 1, 2021, with the net surplus from the first year under the
ASO funding arrangement, recommended to be retained for offset to future funding of the
Health Benefit Program.
1. Background
Existing Program for Health Benefits
1.1 In 2019, under report COD-016-19, the Extended Health and Dental Benefits program
with Sun Life was approved to move to an Administrative Services Only (ASO) funding
formula to November 1, 2020. The Non-ASO benefits which include Life, Long Term
Disability (LTD) and Accidental Death & Dismemberment (AD&D) are not eligible for
ASO funding and continued under the traditional program which are reflected in the
overall decrease.
1.2 The net result from the 2020 program is an overall reduction in the cost of the program
equating to a decrease of 4.4 per cent, and savings of $168,532 entering the 2021
program.
2. The 2021 Program Renewal
2021 Rates and Overall Impact
2.1 The November 1, 2020 renewal rates applicable to the 2021 Health Benefits Program
are detailed on Attachment #1. It identifies the savings achieved from negotiations
undertaken by Mosey and Mosey on the initial proposal of a 3.8 per cent overall
increase, to result in a final renewal rate of 4.4 per cent decrease.
2.2 The impact from COVID-19 might have been expected in some categories such as the
Dental and paramedical services since most of the Dental, Vision, Physiotherapy, and
other Paramedical Offices were closed for a portion of 2020. However, rates are
determined by the experience over the time period from July 2019 to June 2020,
therefore some of the COVID impact might be outside of the timeframe for rate
calculation, but will likely be reflected in rates going forward — potentially, reductions
from closures and increases from health related costs.
2.3 The overall net decrease for 2021 is largely driven by the 12 per cent reduction in the
Extended Health Claims category, which makes up 45 per cent of the overall cost. As
noted above, some of the reduction may be linked to COVID. Mosey & Mosey's claims
analysis in arriving at the 12 per cent decrease considered the continued potential
impact of COVID on the upcoming renewal period.
Municipality of Clarington
Report COD-019-20
Page 3
2.4 The increase in the Life Insurance at 9 per cent results in part from the increase in Long
Term Disability claims and the waiver of premiums for the life insurance that would be
related to those claims.
3. ASO Funding Status and Recommendations for 2021
3.1 The Director of Financial Services reviewed the financial aspects of the ASO Funding
from municipal funds set aside for this program and authored the following status and
recommendations for the 2021 renewal.
3.2 As the Municipality has not yet had a full year history of ASO, particularly under normal
circumstances where all services were available to plan members, it is premature to
adjust costs downwards.
3.3 The Municipality has an established reserve fund that will be utilized to fund any
budgetary shortfalls in a given year. In years where there is a budgetary surplus those
funds should be transferred to the fund in order to ensure funding remains stable.
3.4 Staff will review the actuals again for the 2022 budget and determine if there is the
ability to decrease the budgeted contribution for benefits. It is not advised to adjust each
year as this creates uncertainty in budgets, the more prudent action is to utilize the
reserve fund for year to year fluctuations.
4. Concurrence
This report has been reviewed and contributed to, by the Director of Financial Services
who concurs with the recommendations.
5. Conclusion
The ASO funding formula contributed to a significant cost reduction, resulting in a
successful first year, and it is respectfully recommended that the renewal of the Health
Benefit Program be approved as outlined in this report, to November 1, 2021.
Staff Contact: Marie Marano, Director of Corporate Services, mmarano@clarington.net
Attachments:
Attachment 1 — Mosey & Mosey Monthly Renewal Rates and Cost Summary
Interested Parties:
The Clarington Library will be notified of Council's decision.
Attachment #1 to Report COD-019-20
Mosey & Mosey Monthly Renewal Rates and Cost Summary
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
All Divisions Combined
November 1, 2020 Renewal
Basic Life Insurance
Volume
82,973,250
$
Monthly
Premium
19,924.53
Monthly
Premium
%
Adj.
$
Monthly
Premium
29,720.76
}
%
Adj.
9.0°/0
$ 22,301.58 12.00A
Supplemental Life Insurance
13,655,000
1,433.78
1,61129
12.0DA
1,556.67
9.0%
Dependent Life
344
2,600.91
2,340.75
-10.0%
2,340.75
-10.0%
AD&D
82,973,250
1,576.49
1,576.49
D.0%
1,576.49
0.0%
Long Term Disability
1,652,065
61,299.63
7B,463.47
29.0%
63,754.92
4.0°/0
Extended Health Care
Single
52
0,288.03
7,625.83
7,294.17
Couple
12B
41,683.21
3B,348.88
36,601.73
Family
221
92,684.59
85,269.B2
-8_0°6
81,562.44
-12.0%
Dental
Single
52
3,335.22
3,502.D2
3,335.22
Couple
128
16,485.05
17,310.17
16,405.85
Family
221
44,495.32
46,720.00
5.0%
44,495.32
()-D%
TOTAL MONTHLY PREMIUM
$
293,808.36
$
305,070.30
$
280,804.32
TOTAL MONTHLY COST INCLUDING
PST
$
317,313.03
$
329,475.92
$
303,268.67
TOTAL ANNUAL COST - ALL BENEFITS
$
3,807,756.36
$
3,953,711.44
$
3,63%224.04
Variance To Current Cost
$
145,954.68
3.0%
$
(168,532.32)
AA%