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Mr. Pap6 asked where the market was on co-pays and deductibles. Ms. Daut said the public sector lagged behind the private sector, where deductibles were higher. She noted that there were some public sector agencies with less than $100 deductibles. She said the City negotiates its benefits with its unions, and over time, health insurance had become a more important bargaining issue because health care costs had increased. The City negotiated changes in the plan but generally negotiated three-year contracts with its unions that could not be changed for three years. She said all the unions agreed to implement tiered pharmacy costs and to pay for a portion of their insurance premiums in the last round of bargaining, and now the City was attempting to negotiate plan designs with the unions, including increased deductibles and co-pays. Mr. Pap6 believed that the way to manage health care costs was through wellness programs. He said he heard about the City programs but it was his perception the program had not reached out to the employment base. He asked how the City was progressing in this area. Ms. Daut said the City's program was very comprehensive. The City offered health risk appraisals to all employees and the cost of regular physical exams were covered by the City's health plans. Family members could receive the appraisals for a small fee. Mr. Pap6 asked what percentage of employees took the health risk appraisals. The health and wellness program also had targeted health and fitness programs within department. Health and Fitness Director Steve Auferoth worked with each department to create their own tailor-made incentive programs for employees. For example, the Police Department worked very closely with Mr. Auferoth on creating health and fitness programs for police employees. Responding to a desire expressed by Mr. Pap6 for measurements to indicate how well the programs were working, Ms. Daut indicated the City had data in the risk report that would provide the council with data on information such as sick leave utilization factors and health risk appraisal participation. She emphasized the City wished employees to understand that managing their own health risks were key to reducing health care costs. Mr. Kelly complained about the lack of information accompanying the agenda item summary, suggesting a copy of the presentation should have been included so the council could be better prepared with its questions. Mr. Kelly asked what benefits-related issues the City should be prepared to lobby at the State legislature. Ms. Daut said the City reviewed the health insurance bills as they were introduced in every session. She worked with the League of Oregon Cities and LPGI to put forward agendas relating to health insurance. Mr. Kelly noted that the mayor and city councilors, if they wished to participate in the City's plans, pay 100 percent of the cost. Ms. Bettman asked about the nature of the large claims, and if there were trends involved. Ms. Daut said the the most common type of large claim involved premature births. Those events cost around $500,000 apiece. Ms. Nathanson arrived at the meeting. Ms. Bettman asked if there was a way for the City to avoid hiring individuals with preexisting voluntary health factors, such as smoking, to reduce the City's health care costs. She asked if there were legal issues involved. Human Resource and Risk Services Director Lauren Chouinard indicated that was difficult for the City to do for most job categories. Such a prohibition must represent a bona fide occupational MINUTES--Eugene City Council October 13, 2004 Page 3 Work Session