April 28, 2025 TRUST SPECIAL MEETING OF THE CITY OF NEDERLAND
EMPLOYEE BENEFITS TRUST
4:00 p.m. April 28, 2025
1. MEETING
The meeting was called to order at 6:02 p.m. by Chairperson Albanese at the Bob
Henson Building, 1903 Atlanta Avenue, Nederland, Texas.
The following statement was posted:
"PURSUANT TO SECTION 30.07, PENAL CODE (TRESPASS BY LICENSE HOLDER
WITH AN OPENLY CARRIED HANDGUN), A PERSON LICENSED UNDER
SUBCHAPTER H, CHAPTER 411, GOVERNMENT CODE (HANDGUN LICENSING
LAW), MAY NOT ENTER THIS PROPERTY WITH A HANDGUN THAT IS CARRIED
OPENLY."
2. APPROVAL OF MINUTES
A motion was made by Trustee Root and seconded by Trustee Sonnier to approve the
minutes of the May 6, 2024 meeting of the Employee Benefits Trust as written.
MOTION CARRIED.
Ayes: Chairperson Albanese, Trustees Duplant, Root, Sonnier, and Guillot.
Noes: None.
3. HEALTH INSURANCE
Chris Duque, City Manager, stated the City's health insurance provider is United
Health Care (UHC); the contract expires on June 30th. The current plan year loss
ratio (total paid medical and prescription claims over paid premiums) is 127%. Bids
were opened on Thursday, April 17th.
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Utilizing UHC as the City's health insurance provider, the City provides a three-option
plan design (Standard PPO Plan, High Deductible Health Plan or HSA, and a Health
Maintenance Organization Plan or HMO) with varying levels of dependent coverage
(employee-only, employee+spouse, employee+children, and family) and differing
monthly premiums. The City utilizes two defined contributions: one for the Standard
Plan and the HSA Plan and another for the HMO Plan. The City provides a Standard
Plan that includes a $1,500 deductible and a $6,500 maximum out of pocket, which
includes the deductible amount.
Due to the recent history of high loss ratios, the submitted bids were high. The City's
insurance consultant (HUB International) reviewed the received bids and assessed the
bids of the two finalists - United Healthcare (UHC) and Blue Cross/Blue Shield of
Texas (BCBS). HUB negotiated a best and final offer from both vendors. UHC
presented two options; one with a 15.5% rate increase; and the other with a 12.3%
rate increase. BCBSTX presented a 14.6% (before a 2% bundling discount) rate
increase; unfortunately, the proposed plan design drastically increased the employees'
possible out of pocket expenses (higher maximum out of pocket, higher co-pays, and
greater prescription costs).
The first five UHC options follow the quote for the plan design matching the current
benefits, not the quote for "UHC (Opt 1)". Thus, the majority of the UHC options
continue to focus on three plans (a "standard" plan, a high-deductible plan/HSA, and
health maintenance organization plan/HMO), four levels of coverage (employee-only,
employee+spouse, employee+children, and family), and two defined contributions
(one for the standard and HSA plans and another for the HMO plan).
Under Option 1 (City costs do not increase), the Standard Plan/HSA Plan and HMO
Plan Defined Contributions are not adjusted. The City's cost increase is $0 while the
employees would cover the rate increase (over $262,000). Under Option 2 (employee
costs do not increase), the Standard Plan/HSA Plan and HMO Plan Defined
Contributions are adjusted. The City's cost increase is over $263,000 while the
employees cost increase is $0. Under Option 3 (50/50), the Standard Plan/HSA Plan
and HMO Plan Defined Contributions are adjusted. The City's cost increase is over
$132,000 (approx. 50.4%) while the employees cost increase is over $130,000
(approx. 49.6%). Under Option 4 (Employee-only increase), the Standard Plan/HSA
Plan and HMO Plan Defined Contributions are adjusted. The City's cost increase is
over $156,000 (approx. 59.5%) while the employees cost increase is over $106,000
(approx. 40.5%). Under Option 5 (HMO-focused plan), the Standard Plan/HSA Plan
and HMO Plan Defined Contributions are adjusted with greater financial support of the
HMO Plan.
Jeff Darby, 1515 N. 26th St., asked what the deadline was for notifying HUB of the
city's provider selection. Chris Duque, City Manager, explained the item was placed
on this agenda in order to give the HR department time to schedule open enrollment
timely.
A motion was made by Trustee Sonnier and seconded by Trustee Duplant to award a bid
for employee health insurance to United Healthcare, Option 2, with no increase to
employees. MOTION CARRIED.
Ayes: Chairperson Albanese, Trustees Duplant, Root, Sonnier, and Guillot.
Noes: None.
4. DENTAL INSURANCE
Mr. Duque stated the City currently utilizes Blue Cross/Blue Shield of Texas as its
dental insurance provider. Under the dental insurance plan design, the City pays
100% of the employee premiums and 0% of dependent premiums, regardless of
whether the employee chooses the HIGH or LOW plan. The majority of City
employees and retirees utilize the HIGH plan (108 out of 125 active employees OR
87%). The City annually spends over $36,300 on dental insurance premiums.
The BCBS of Texas renewal offer is a rate pass. However, the UHC health proposal
includes a bundling discount if their dental insurance bid is accepted. The UHC
proposal is a 4.4% rate increase with a $5,000 credit, which will offset the City's
greater costs. Staff's recommendation is to award the dental insurance bid to United
Health Care maintaining the same plan design and contribution model. The additional
annual cost to the City will be offset by the $5,000 credit. The additional annual cost
to the employees is approximately $1,800.
A motion was made by Trustee Sonnier and seconded by Trustee Root to award a bid
for employee dental insurance to United Healthcare. MOTION CARRIED.
Ayes: Chairperson Albanese, Trustees Duplant, Root, Sonnier, and Guillot.
Noes: None.
5. ADJOURN
There being no further business a motion was made by Chairperson Albanese and
seconded by Trustee Root to adjourn the meeting at 6:28 p.m. MOTION CARRIED.
ti in
Ayes: Chairperson Albanese, Trustees Duplant, Root, Sonnier, and Guillot.
Noes: None.
Don Albanese, Chairperson
City of Nederland Employee Benefits Trust
ATTEST:
Sylvia Root, Secretary
City of Nederland Employee Benefits Trust