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HomeMy WebLinkAbout2003-10-20 City Council (4)City of Palo Alto City Manager’s Report 4 TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: HUMAN RESOURCES DATE: SUBJECT: OCTOBER 20, 2003 CMR: 469:03 APPROVAL OF RESOLUTIONS AMENDING PAPOA MEMORANDUM OF AGREEMENT AND COMPENSATION PLAN TO ADD SIDE LETTER AGREEMENT RECOMMENDATION This report recommends that Council approve the attached side letter agreement between the City and the Palo Alto Police Officer Association (PAPOA), which extends through 2004 the City’ s 2003 agreement to fund any increased maximum co-payment obligation resulting from an employee’s enrollment in the less expensive Peace Officers Research Association (PORAC) Preferred Provider Organization (PPO) health plan. BACKGROUND Last year the City established a series of incentive programs to encourage employees to move from the more costly plans available under Public Employee’s Retirement System (PERS) to less costly plans. Those incentive plans were successful and resulted in $850,000 savings in health care premium costs during fiscal year 02-03. These incentives were adopted for a one- year period only. Police employees enrolled in the most expensive PERSCare PPO option were offered the opportunity to elect the PERS Choice PPO in exchange for a cash incentive, or to elect the PORAC Health Plan with the City paying the difference in the out-of-pocket maximum co-payments between PORAC and PERSCare. The cash incentive program will be discontinued effective 12/31/03 but, in an effort to encourage the 19 employees still enrolled in PERS Care to shift to PORAC (which would save $73,428 in annual premiums), staff recommends the City continue the self-funded maximum co-payment program. To date, no eligible employee has requested reimbursement under this plan. DISCUSSION The PAPOA 2004 Medical Incentive Plan entitles active members of PAPOA, who are enrolled in the PORAC health plan in calendar year 2004 to receive reimbursement from the City once an employee’s out-of-pocket expenses have exceeded the PERSCare annual CMR: 469:03 Pagelof 2 maximum co-payment responsibility. PERSCare’s maximum co-payment responsibility per calendar year is two thousand ($2,000) per plan member, or four thousand ($4,000) per family. PORAC’ s maximum co-payment responsibility is five thousand ($5,000) per person. Under the proposed plan, employees and dependents enrolled in PORAC may submit eligible expenses incurred during the 2004 calendar year that exceed $2,000 per member/$4,000 per family for covered services received from a preferred provider to the Human Resources Department for reimbursement. RESOURCE IMPACT The resource impact is difficult to determine. During 2003, there was no cost as no one submitted a request for reimbursement under this plan. If, during 2004, five eligible employees submitted the maximum allowed, the cost could be as high as $15,000. POLICY IMPLICATIONS This request does not represent any change to existing City policy. ENVIRONMENTAL REVIEW This is not a project under the California Environmental Quality Act (CEQA). ATTACHMENTS 1.Resolution amending Merit Rules to incorporate Memorandum of Understanding. 2.Resolution amending PAPOA Compensation Plan side letter to PAPOA PREPARED BY: Leslie Loomis, Director of Human Resources DEPARTMENT HEAD: LESLIE LOOMIS t Director of Human Resources CITY MANAGER APPROVAL: . _ _ EMILY HARRISON Assistant City Manager CMR: 469:03 Page2of 2 RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SECTION 1601 OF THE MERIT SYSTEM RULES AND REGULATIONS REGARDING THE MEMORANDUM OF AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE PALO ALTO PEACE OFFICERS’ ASSOCIATION, TO ADD THE CITY OF PALO ALTO PORAC MEDICAL INCENTIVE PLAN FOR CALENDAR YEAR 2004 The Council of the City of Palo Alto does RESOLVE as follows: SECTION i. Section 1601 of the Merit System Rules and Regulations is hereby amended as follows: 1601. Memorandum of agreement incorporated reference. That certain memorandum of agreement by and between the City of Palo Alto and Palo Alto Peace Officers’ Association, consisting of Preamble and Sections ! through 50, and Appendix A, for a term commencing July I, 2001, and expiring June 30, 2007, as amended to add the City of Palo Alto PORAC Medical Incentive Plan for Calendar Year 2004, is hereby incorporated into these Merit System Rules and Regulations by reference as though fully set forth herein. Said memorandum shall apply to al! emp!oyees in classifications of police officer trainee, police officer, police agent, and police sergeant, except where specifically provided otherwise herein. In the case of conflict with this chapter and any other provisions of the Merit System Rules and Regulations, this chapter wil! prevail over such other provisions as to emp!oyees represented by said Palo Alto Peace Officers’ Association. SECTION 2.The Memorandum of Agreement ("MOA") incorporated into the Merit System Rules and Regulations ("Merit Rules") by Section 1 is a revision of the MOA incorporated into the Merit Rules by Resolution No. 8083, and adds a Section 53 to that MOA as shown on Exhibit "A", attached hereto and incorporated herein by reference. 031002 sm 8120401 1 SECTION 3. The changes provided for in this resolution shall not affect any right established or accrued, or any offense or act committed, or any penalty of forfeiture incurred, or any prosecution, suit, or proceeding pending or any judgment rendered prior to the effective date of this resolution. SECTION 4. The Council finds that this is not a project under the California Environmenta! Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: City Clerk APPROVED AS TO FORM: Mayor APPROVED: Senior Assistant City Attorney City Manager Director of Administrative Services Director of Human Resources 031002 sm 8120401 2 Tentative Agreement Pending Council Authorization (Scheduled for October 20, 2003) PAPOA 2004 MEDICAL INCENTIVE PLAN The following is a summary of the 2004 Medical Incentive Plan for active employees of the Palo Alto Police Officers Association. For active members of the Palo Alto Police Officers Association (PAPOA) enrolled in the PORAC Police & Fire Health Plan (PORAC) in calendar year 2004, the City shall self fund the difference in the "Copayment Responsibility"/Out-of-Pocket maximum between PERSCare Medical Plan and PORAC Prudent Buyer Plan. PERSCare’s maximum copayment responsibility per calendar year is two thousand ($2,000) per plan member, not to exceed four thousand ($4,000) per family. PORAC’s maximum copayment responsibility is $5,000 per person. Employees and dependents enrolled in PORAC may submit eligible expenses incurred during the 2004 calendar year that exceed $2000 per member/S4000 per family for covered services received from a preferred provider to the Human Resources Department for reimbursement. For example, Employee A is in PORAC as an individual member. He/she has to pay $4000.00 of covered out-of-pocket expenses during the 2004 calendar year-under the PORAC plan. I_f Employee A had been in PERS Care, he/she would have reached his/her out-of-pocket maximum at $2000.00. Under the self insurance plan, Employee A shall submit to Human Resources the Explanation of Benefit from Blue Cross for the additional out-of-pocket services and this amount shall be reimbursed. EXHIBIT "A" fol!ows: RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE COMPENSATION PLAN FOR POLICE NON-MANAGEMENT PERSONNEL ADOPTED BY RESOLUTION NO. 8082, AND AMENDED BY RESOLUTION NOS. 8244 AND 8253 TO ADD THE CITY OF PALO ALTO’S PORAC MEDICAL INCENTIVE PLAN FOR CALENDAR YEAR 2004 The Council of the City of Palo Alto does RESOLVE as SECTION !. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Compensation Plan, adopted by Resolution No. 8082, and amended by Resolution Nos. 8244 and 8253 is hereby amended by adding the City of Palo Alto’s PORAC Medical Incentive Plan For Calendar Year 2004, as set forth in Exhibit "A", attached hereto and incorporated herein by reference. SECTION 2.The Director of Administrative Services is authorized to implement the amended compensation plan as set forth in Section I. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk A~PROV~ ~ TO ~: Mayor APPROVED: Senior Asst. City Attorney City Manager Director of Administrative Services Director of Human Resources 031002 sm 8120402 Tentative Agreement Pending Council Authorization (Scheduled for October 20, 2003) PAPOA 2004 MEDICAL INCENTIVE PLAN The following is a summary of the 2004 Medical Incentive Plan for active employees of the Palo Alto Police Officers Association. For active members of the Palo Alto Police Officers Association (PAPOA) enrolled in the PORAC Police & Fire Health Plan (PORAC) in calendar year 2004, the City shall self fund the difference in the "Copayment Responsibility"/Out-of-Pocket maximum between PERSCare Medical Plan and PORAC Prudent Buyer Plan. PERSCare’s maximum copayment responsibility per calendar year is two thousand ($2,000) per plan member, not to exceed four thousand ($4,000) per family. PORAC’s maximum copayment responsibility is $5,000 per person. Employees and dependents enrolled in PORAC may submit eligible expenses incurred during the 2004 calendar year that exceed $2000 per member/S4000 per family for covered services received from a preferred provider to the Human Resources Department for reimbursement. For example, Employee A is in PORAC as an individual member. He/she has to pay $4000.00 of covered out-of-pocket expenses during the 2004 calendar year under the PORAC plan. If Employee A had been in PERS Care, he/she would have reached his/her out-of-pocket maximum at $2000.00. Under the self insurance plan, Employee A shall submit to Human Resources the Explanation of Benefit from Blue Cross for the additional out-of-pocket services and this amount shall be reimbursed. EXHIBIT "A"