Prepared by Jeffrey Londa, Ogletree, Deakins, Nash,  Smoak & Stewart, P.C. & City of San Antonio OMB  Page 1 of 1  February 23, 2015 

City Of San Antonio Labor Proposal to SAPOA 

February 20, 2015 

 On February 20, 2015 the City of San Antonio offered to the Police Union a four year labor proposal: 

Pay  increases  resulting  in $40,910,065 additional wage  costs  for  the City which provide each 

officer with wage increases totaling 9.5%.  

a. 2% lump sum payment based on annual total compensation including base pay, longevity, 

supplemental pay and overtime payable in FY 2015 following ratification of the agreement 

b. 2% wage increase effective October 1, 2015  

c. 2.5% wage increase effective October 1, 2016  

d. 3% wage increase effective October 1, 2017 

 

Officers sharing the cost of healthcare 

Employee only  coverage available with no premium  cost  to employees; dependent  coverage  is 

subsidized  by  the  City with  employees  paying  premiums  for  dependent  coverage.  Healthcare 

changes will be effective January 1, 2016. The estimated healthcare cost to the City, as certified 

by Arthur  J. Gallagher and based on FY2014 healthcare cost,  is $11,300 per employee per year. 

The Legacy Plan is available for only FY 2016 with premiums for employees and dependents. 

 

Phasing out of City funding for the Legal Defense Fund over three years; continuation of tuition 

reimbursement with caps and job related criteria; elimination/revision of the evergreen clause; 

elimination of patrol car mileage limitation; and certain other language changes. 

 

Total Contract Cost of Police Contract 

The  total cost of  the contract  (wages, specialty pays, overtime, benefits, and patrol vehicles)  in 

the FY 2015 General Fund Adopted Budget is $316.8 million 

The table below shows the projected cost of the contract to the General Fund reflecting the City’s 

February 20 Labor Proposal 

 Fiscal Year 

Annual Amount($ in Millions)1 

FY 2015 $321.9 

FY 2016 $329.9

FY 2017 $338.3

FY 2018 $350.91) Contract cost reflects City’s February 20 labor proposal; healthcare inflation of 10% through FY 2016 and 8% for 

FY 2017 and FY2018; fully funding all authorized uniform positions; and any step increases and longevity 

increases estimated as authorized under the current CBA  which do not result from the February 20 City Proposal 

As directed by the City Council, the City’s proposal keeps public safety expenses at no more than 66% of 

the General Fund for the term of the agreement. 

CityofSanAntonioDetailsofCityFebruary20HealthBenefitsProposaltoSAPOA

 

Prepared by City of San Antonio OMB & Gallagher Benefit Services, Inc. Page 1 of 2 Tuesday, March 10, 2015

 

Effective  January  1,  2016,  the  City  of  San  Antonio  offers  Police  uniformed  employees  a  choice  of  three  Healthcare  Benefit  Plans with 

employee premiums described on page 2.   

 

The City’s proposal provides the defined healthcare benefits described on page 2. These benefits are offered to employees at the premium 

costs stated on page 2. The premium costs stated on page 2 will apply during calendar year 2016 and will, along with benefits, be subject to 

adjustment during subsequent years. See “Future Changes” below. 

 

FY 2016: 3 Plans: Legacy, Value and CDHP. 

Value and CDHP: Employee only coverage has no premium cost to employees; dependent coverage is subsidized by the City with 

employees paying premiums for dependent coverage. 

Legacy Plan available for only FY2016 with premiums for employees and dependents. 

Estimated healthcare cost to the City, as certified by Arthur J. Gallagher and based on implementation for FY2014, was $11,300 per 

employee for that fiscal year. 

Healthcare costs are estimated to increase 10% annually for each of the fiscal years 2015 and 2016, resulting in an estimated 

healthcare cost to the City of approximately $13,600 per employee for the healthcare plan options effective January 1, 2016. 

 

FY 2017 & FY 2018: 2 Plans: Value and CDHP. 

Value and CDHP: Employee only coverage with no premium cost to employees; dependent coverage is subsidized by the City with 

employees paying premiums for dependent coverage. 

Healthcare costs are estimated to increase 8% annually for each of the fiscal years 2017 and 2018. 

 

Future Changes to Healthcare (Benefits and/or Employee Contributions) Healthcare Benefit Plans and Employee Contributions will be reviewed annually as part of the City’s Budget Process. 

City and SAPOA will use an agreed upon actuarial formula to determine total funding needed to fund plan benefits. Any deficiency or 

excess in funding will result in an adjustment to the benefit plans and/or employee contributions to meet 100% of the funding 

requirements of the City’s Self Insurance Fund. 

CityofSanAntonioDetailsofCityFebruary20HealthBenefitsProposaltoSAPOA

 

Prepared by City of San Antonio OMB & Gallagher Benefit Services, Inc. Page 2 of 2 Tuesday, March 10, 2015

 

 

 

 

 

 

Attachment I

IN Network Out of Network IN Network Out of Network IN Network Out of Network

Employee Premiums (Monthly Deduction)EE Only

EE & Child(ren)

EE & Spouse

EE & Family

Health Savings Account

Plan DesignIndividual $250 $500 $500 $1,000 $4,000 $8,000

Family $500 $1,000 $1,000 $2,000 $8,000 $16,000

Coinsurance Percentage 20% 40% 20% 50% 0% 50%

Individual $850 $1,700 $2,500 unlimited $4,000 $8,000

Family $2,000 $4,000 $5,000 unlimited $8,000 $16,000

Office Visit Co‐Pay

$25 PCP ‐ $50 

SPEC

Emergency Room Co‐Pay $250

Urgent Care Center Co‐Pay $50

Separate Brand 

Drug Deductible or 

out of pocket cap

$150 OOP per 

individual, $300 OOP 

per family (in 

addition to OOP limit 

above) $100

50% 

after deductible

0% 

after deductible

50% 

after deductible

RX ‐ 30 day Tier 1/ 

Tier 2 /Tier 3

$0 generic/20% 

brand/ 30% non‐

preferred brand

20% generic/40% 

brand/ 50% non‐

preferred brand $10/$25/$40

0% After Ded, 

Preventive Drugs 

Subject to Co‐

Pays$10/$25/$40

RX ‐ 90 day Tier 1/ 

Tier 2 /Tier 3

$0 generic/10% 

brand/ 20% non‐

preferred brand

20% generic/40% 

brand/ 50% non‐

preferred brand $20/$50/$80

0% After Ded, 

Preventive Drugs 

Subject to Co‐

Pays$20/$50/$80

Notes:

(1) Legacy Plan offered only to incumbent employees and only for calendar year 2016

(2) H.S.A contribution by City of $2,000 in 2016, and $1,000 in 2017 and 2018

0% 

after deductible

50% 

after deductible

$218.70  $134.20  $93.60

Max.  Out‐of‐Pocket 

(includes deductibles and co‐pays)

Pharmacy

$112.90  $0.00 

Annual Deductible

20%

 after deductible

40% 

after deductible

50% 

after deductible

$2,000 per Employee(2)$456.80 $327.10 $228.20

$296.20 $192.90 $134.60 

$0.00

LEGACY PLAN(1) VALUE PLAN CDHP

City of San Antonio ‐ Healthcare Proposal to SAPOA

Monthly Premiums City Employee Total City Employee Total City Employee Total

Employee Only $730.0 $112.9 $843.0 $493.4 $0.0 $493.4 $417.9 $0.0 $417.9

Employee plus Child $874.0 $218.7 $1,092.7 $753.9 $134.2 $888.1 $658.6 $93.6 $752.2

Employee plus Spouse $1,184.4 $296.2 $1,480.5 $867.8 $192.9 $1,060.8 $778.4 $134.6 $912.9

Employee Plus Family $1,369.6 $456.8 $1,826.4 $1,128.3 $327.1 $1,455.5 $1,029.1 $228.2 $1,257.3

Note

1) Legacy Plan offered only to incumbent employees and only for calendar year 2016

2) Health Savings Account (H.S.A.) contribution by the City per employee of $2,000 in 2016, and $1,000 in 2017 and 2018

LEGACY (1) VALUE CONSUMER CHOICE (2)

Prepared by Gallagher Benefit Services, Inc.

Compiled by OMB Printed on 3/11/2015

Arthur J. Gallagher & Co.

Healthcare Analytics Consulting 125-310 Village Boulevard, Princeton, NJ 08540

Phone: 609.452.2488 – Fax: 609.452.2668

© 2015 GALLAGHER BENEFIT SERVICES, INC www.AJG.COM

March 12, 2015 Buddy Morris Area President Gallagher Benefit Services, Inc. 601 NW Loop 410, Suite 325 San Antonio, Texas 78216 Re: Certification of City of San Antonio’s 2016 Total Premium Estimates and Employee Contribution Amounts Dear Buddy: Healthcare Analytics Consulting (“HCA”), a division of Arthur J. Gallagher, has completed the Certification of the City of San Antonio’s 2016 Total Premium Estimates and Employee Contribution Amounts and determined all values contained in the Summary of Results section of this document to be reasonable and acceptable based on claim information and benefit design supplied to HCA. Scope HCA was asked to develop total premium estimates for 2016 based on updated claims information and updated member migration assumptions. HCA was asked to review the methodology used to calculate Employee Contributions and provide a Certification of the City of San Antonio’s 2016 Total Premium Estimates and Employee Contribution Amounts. Methodology The Apex.HRM (“HRM”) model provides a complete commercial healthcare plan rating capability, including the cost impacts of alternative plan design features and premium rate setting for both first dollar and specific/aggregate stop loss coverage. HRM is considered one of the industry’s best in managing plan design and calculating program costs. The actuarial values for plan designs are based on HRM and measure the portion of the plan costs expected to be reimbursed by the employer after member cost share from a normative population. Data was supplied to HCA that provided detail regarding the client’s percentage of claims serviced In-Network, splits between Medical and Prescription Drug claims, and distribution of claims at specific levels for their employees. Analysis of this data was performed and the potential impact of variances in this data and the standard population inhernet in the HRM Model was considered in developing the cost per employee cost estimates. Updated claims information through December of 2014 was provided to HCA. Actuarial judgement was used in considering the opportunity for employee “selection” in the choice of benefit plans when more than one plan is offered to a population.

2015 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. | AJG.COM

Summary of Results

2016 Total Premium and Percentage of Employee Contribution

Scenario #1 Low Midpoint High

Total Premium $32,509,408 $34,747,980 $36,986,553

Employee Contribution $6,423,188 $6,423,188 $6,423,188

Percentage 19.8% 18.5% 17.4%

Scenario #2 Low Midpoint High

Total Premium $33,141,929 $35,308,710 $37,475,491

Employee Contribution $6,623,228 $6,623,228 $6,623,228

Percentage 20.0% 18.8% 17.7%

Cost to City

Scenario #1 Low Midpoint High

Cost to City with H.S.A $27,986,220 $30,224,792 $32,463,365

Cost Per Employee $11,789 $12,732 $13,675

Scenario #2 Low Midpoint High

Cost to City with H.S.A $27,944,701 $30,111,482 $32,278,263

Cost Per Employee $11,771 $12,684 $13,597

Migration Assumptions

Scenario #1 Legacy Value CDHP

Enrollment 20% 40% 40%

Scenario #2 Legacy Value CDHP

Enrollment 20% 50% 30%

Data Reliance Benefit plan designs, subscriber counts, base claim projections, administrative expense projections, member premiums, HSA contributions and cost per employee were supplied to HCA and assumed to be accurate for the purpose of this review.

2015 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. | AJG.COM

Limitations Our estimates are based on generally accepted actuarial techniques applied in a consistent manner and determined in accordance with the Actuarial Standards of Practice (ASOPs) established by the Actuarial Standards Board (ASB) and with applicable laws and regulations. The undersigned is a member of the American Academy of Actuaries, meets the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States promulgated by the American Academy of Actuaries, and has the education and experience necessary to perform the work. If you have any further questions, please call. Sincerely,

Robert L. Jordan, ASA, MAAA, FCA Client Consulting Actuary cc: Mark Rosenberg, HCA