HomeMy WebLinkAboutNB 2 ADOPT H.M.O. 11-03-80DATE: October 29, 1980
11~3~80
Inter-Corn
TO: Mayor and City Council
FROM: Personnel Department
SUBJECT: Adoption of Health Maintenance Organization
On Friday, October 17, 1980, a group of employee representatives
voted unanimously to include Family Health Plan (FHP) a federally-
qualified Health Maintenance Organization (HMO) as part of the
City Benefit package, as an alternative to Galbraith & Green (G & G)
for medical and dental coverage. This decision was made after re-
viewing comparison information for FHP and INA Healthplans, the
other major HMO serving this area, and discussing both with program
representatives. The choice was made primarily on the accessibility
of facilities and level of services available at each of the facilities.
The question of inclusion of an HMO was raised through two circum-
stances. First, the City Was contacted by an HMO in April of 1979
requesting inclusion in the City Benefits program. Action wa~ deferred
until the employee negotiations in 1980. While neither the City nor
the employee groups raised the issue of medical coverage during the
negotiations, interest was expressed later through both the Tustin Police
Employees Association and the Employee Relations Committee.
In order to insure full employee input, and consultation with the associa-
tions, a committee was established consisting of representatives of all
five bargaining/representative groups and the full Employee Relations
Committee. Comparison information was sent to representatives prior to
the meeting for review, and the committee included individuals who have
been under either one or both programs with other employers. As men-
tioned above, the vote for FHP was unanimous.
Other plans which were'considered"were Maxicare, who origina!ly contacted
the City in 1979, ~nd Insurance Benefits, Inc., of Tustin. Both were
rejected because of their inability to provide a competetive range of
benefits and facilities in relation to the other two plans.
Implementation of the HMO Program will begin on.November 4, 1980 with a
two-week open enrollment period. 'Employees will be given the option of
meeting with FHP representatives during this period, and will have until
November 14, 1980 to designate which program they wish to be covered by,
starting November 17, 1980.
Mayor and City Council
October 29, 1980
Page Two
The rates for employee coverage under FHP are the same as those for
G & G, so there would be no' change in our current payment structure.
The dependent rates under FHP, however, are considerably lower than
those for G & G. As a result, there will be no dependent premium
charged to employees, under FHP. Employees will continue to pay depen-
dent costs for life insurance and excess insurance coverage since
these will not be provided through FHP. Because of the level of diff-
erence between FHP AND G & G, there will be a net savings to the City
of approximately $25.00 per month for each employee enrolled for depen-
dnet coverage under FHP.
Full information concerning benefits levels will be provided Council
Members during the open enrollment period.
RPG/ka f
cc: City Administrator