2026-09-09 - Human Resources, Administration and Appointments Committee

TAKEN CARE OF. SORRY, NOT A PROBLEM. ALL RIGHT. ALL RIGHT. WE'RE GOING TO BE STARTING THE [Roll Call: Chair Binder, Santos, Affa] COMMITTEE MEETING FOR HUMAN RESOURCES ADMINISTRATIONS AND APPOINTMENTS

COMMITTEE PRESENT ARE. WELL, I'LL JUST. YOU WANT TO DO A ROLL CALL? GENESIS? SORRY, MR. BENDER. PRESENT, MISS SAFIR, I'M HERE. AND MISS SANTOS IS NOT HERE. ALL RIGHT, SO WE HAVE ONE ITEM ON THE

[15-8635 Bill 61 Amending the 2026 Risk Fund by transferring Six Million Five Hundred Thousand ($6,500,000) Dollars from the General Fund unappropriated balance to the Risk Fund for the payment of

healthcare claims, drug prescription benefits, and other employee medical costs for the remainder of the year, as well as for insurance costs, and property and auto losses. Amounts for healthcare

claims are significantly higher this year and certain losses have been experienced at rates higher than expected.] AGENDA TODAY, AND THAT IS FOR BILL 61. DID YOU WANT TO READ THAT INTO. THANKS. BILL

61 AMENDS THE 2026 2026 RISK FUND BY TRANSFERRING $6,500,000 FROM THE GENERAL FUND UNAPPROPRIATED BALANCE TO THE RISK FUND FOR THE PAYMENT OF HEALTH CARE CLAIMS, DRUG PRESCRIPTION BENEFITS AND OTHER

EMPLOYEE MEDICAL COSTS FOR THE REMAINDER OF THE YEAR, AS WELL AS FOR INSURANCE COSTS AND PROPERTY AND AUTO LOSSES. AMOUNTS FOR HEALTHCARE CLAIMS ARE SIGNIFICANTLY HIGHER THIS YEAR, AND CERTAIN LOSSES

HAVE BEEN EXPERIENCED AT RATES HIGHER THAN EXPECTED. THANK YOU. SO I GUESS AS PART OF THIS, ONE OF THE AND I UNDERSTAND IN OFF THE TOP HERE, I HAD SUBMITTED TO THE COMPTROLLER A COUPLE OF QUESTIONS. I

GAVE IT REALLY LAST MINUTE. SO I DIDN'T EXPECT TO HAVE EVERYTHING BACK IN TIME. AND I HAVE SOME QUESTIONS FOR THE ADMINISTRATION AS WELL, BUT I UNDERSTAND IF THEY'LL TAKE SOME TIME TO BE ABLE TO

RESPOND WITH. AND I WOULD I WOULD LOOK FORWARD TO RECEIVING THAT DATA BEFORE THE NEXT COUNCIL MEETING. IF POSSIBLE. WE HAVE TO VOTE ON. I CAN ADDRESS A LITTLE BIT OF IT NOW, IF YOU'RE INTERESTED. I

MEAN, ONE ONE THING I MEAN, I THINK ONE OF YOUR QUESTIONS IS WHY ARE WE SELF-INSURED? AND IF WE'RE MAKING THESE BIG TRANSFERS AT THE END OF EVERY YEAR, WHY DON'T WE PLAN FOR THEM AND WHY? AND IF WE

WERE NOT SELF-INSURED, HAVE WE EXPLORED THAT? AND WOULD WE SAVE MONEY? AND, YOU KNOW, WE'LL PUT TOGETHER A BETTER ANSWER. BUT BROADLY, THE ANSWER IS THAT EVERY GOVERNMENT THAT CAN BE SELF-INSURED DOES

SO EVERYONE SAVES MONEY BY DOING IT. WHERE YOU SAVE MONEY IS THE PREMIUMS. WE DON'T PAY PREMIUMS ON ANY OF OUR 900 AND SOME EMPLOYEES. IF WE HAD TO PAY PREMIUMS, YOU KNOW, WE WOULD EXPERIENCE A MUCH

GREATER COST. AND BEYOND THE PREMIUMS, OUR PREMIUMS WOULD GO UP. ONE, YOU KNOW, NOT TO, NOT TO NOT TO SPEAK OUT OF TURN. BUT PART OF THE REASON WE HAVE TO TRANSFER 6.5 MILLION IS BECAUSE WE HAVE ONE

LARGE CLAIM. AND WHEN YOU HAVE LARGE CLAIMS, THAT REALLY KILLS YOUR PREMIUM. SO THE SIZE WORKFORCE THAT WE HAVE, WE'RE ALWAYS GOING TO HAVE LARGE CLAIMS. WE BASE THE NUMBER. THE INDUSTRY STANDARD IS

30,033 IS ABOUT WHAT THAT'S WHAT WE BUDGET PER EMPLOYEE FOR HEALTH CARE COSTS. AND, YOU KNOW, MAYBE WE DO HAVE TO UP IT A LITTLE BIT. BUT THAT'S, THAT'S THE UNIVERSE. THAT'S THE THAT IS THE INDUSTRY

STANDARD THAT WE USE. OUR DIRECTOR OF FINANCE COMMUNICATES WITH OTHER DIRECTORS OF FINANCES. THAT'S KIND OF THE AGREED UPON NUMBER, BUT THAT'S HOW WE GOT TO BE SELF-INSURED AND THAT'S WHERE WE ARE.

OKAY. DO YOU KNOW, WITH RESPECT TO THE STOP LOSS, IS THAT EVALUATED ANNUALLY IN BRINGING THAT NUMBER DOWN? SO IF WE HAVE CASES THAT ARE THAT ARE REACHING THAT LIMIT, IS THAT SOME WAY TO BASICALLY TO

POTENTIALLY OFFSET SOME OF THE THE OUTLYING RISK THAT OUR DIRECTOR OF FINANCE. YES. I MEAN, SHE, SHE EVALUATES IT AND IT'S KIND OF LIKE THE MMO, WE EVALUATE THAT EACH YEAR ANNUALLY TOO. AND YOU LOOK

AT THOSE NUMBERS AND YOU MAKE THAT EVALUATION, BUT IT'S A PROJECTION, YOU KNOW, PROJECTIONS, YOU KNOW, BECAUSE THE REASON I'M BRINGING SOME OF THESE QUESTIONS UP AND I UNDERSTAND THE NEED TO, TO MOVE,

MOVE FORWARD WITH THIS BECAUSE WE HAVE TO, WE HAVE TO OBVIOUSLY COVER THINGS. BUT LOOKING AT SOME HISTORICAL DATA AND AGAIN, THIS I'M GOING TO I'M GOING TO COUCH THIS IN SAYING, I'M WAITING FOR THIS

TO BE THE FINAL NUMBERS FROM THE COMPTROLLER. BUT JUST IN ROUGH NUMBERS, IT LOOKS LIKE IN 2024, WE STARTED MOVING. SO THAT ONE WE DID 6.5. AND THEN IN 2025 I MISSED ONE. ACTUALLY, IT WAS AROUND 9.5

MILLION. AND THEN IN 2026, NOW WE'RE DOING 6.5. IT WOULD BE HELPFUL IF WE START TO IT WOULD BE HELPFUL TO ME AT LEAST. I WOULD SAY IS UNDERSTANDING WHERE WE ARE FROM A BUDGETING PERSPECTIVE. BECAUSE

IF WE'RE LOOKING AT THAT SAME, THAT SAME TIME FROM A BUDGET PERSPECTIVE, WE'RE FALLING. WELL, RIGHT NOW WE HAVE TODAY TO THIS MINUTE. WE HAVE WE HAVE SPENT 13,000,272 IN SOME CHANGE DOLLARS IN OUR IN

OUR CLAIMS, WE KNOW THAT WE EXPERIENCE A, A, YOU KNOW, WE'VE BUDGETED ABOUT $30 MILLION FOR OUR HEALTH CARE COSTS. WE KNOW THAT WE'RE GOING TO HIT A A HICCUP. WE'RE WE HIT MOST OF OUR CLAIMS. WE HIT A

BIG NUMBER AT THE END OF THE YEAR. SO THIS IS PRUDENT BUDGETING TO MAKE SURE, YOU KNOW, WE WE'RE ABLE TO FULFILL THOSE CLAIMS. BUT THAT'S WHERE WE ARE TODAY. WHERE WE ARE TODAY IS 13,000,272 AND

CHANGE. SO AND CURRENTLY IN RIGHT NOW OF WHAT'S BEEN MOVED SO FAR, WE'VE IT'S BUDGETED FOR THE YEAR IS 23.3 MILLION, I BELIEVE IS WHAT IT LOOKS LIKE. I SEE I DON'T KNOW, I'M NOT SURE IT'S BUDGET FOR

THE YEAR. SO WE'RE USING WE'VE USED 13 OF THAT BUDGETED 23. WE'RE LOOKING TO MOVE 6.5 WITH THE EXPECTATION THAT WE'RE GOING TO HAVE AN OVERRUN. BUT BUT IT'S NOT A IT'S WE DON'T KNOW THAT TO BE THE

CASE YET. YEAH. WE I MEAN, RIGHT THERE PROJECTIONS. YOU HAVE TO HAVE THE MONEY AVAILABLE. THE WORST CASE SCENARIO WE WE WOULD HAVE WE WOULD HAVE AN OVERAGE IN THE ACCOUNT. BUT LOOK, THE I THINK REALLY

WHAT YOU'RE ASKING IS CAN WE PLAN BETTER? CAN WE BUDGET BETTER FOR 2027? AND YOU KNOW, YOU'VE ALREADY BEGUN TO HAVE LOOKS AT THE BUDGET THAT WE'RE CREATING. YOU'RE WELCOME TO DELVE INTO IT AS MUCH AS

YOU WANT AND GIVE YOUR OPINIONS, AND WE'LL TAKE THEM SERIOUSLY. AND I DON'T WANT TO BE CLEAR, I'M NOT INFERRING OR IMPLYING THAT WE'RE NOT BUDGETING IT PROPERLY. I'M JUST ASKING THE QUESTION JUST

BECAUSE IN MY IN MY, IN MY LIMITED TIME HERE, THE THIS IS NOW MY, I THINK SECOND OR THIRD, YOU KNOW, MOVEMENT FOR THIS IN BUDGETING TIME OR IN SORRY, IN, IN PROCESSING THIS TRANSFER. AND IT JUST, IT,

IT CONCERNS ME WHEN WE'RE LOOKING AT THIS. AND IF, IF YEAR OVER YEAR, IT'S STARTING TO GET HIGHER. THAT'S WHY I ASKED THE QUESTION ORIGINALLY ABOUT HAVE WE EVALUATED IT? I UNDERSTAND THAT IT MAY NOT

BE A COST SAVING MEASURE. IT MAY BE A IT MAY BE A NEUTRAL MOVE TO CONSIDER PRIVATE. BUT MY QUESTION IS IT WOULD BECOME MORE STABILITY TO IT. WE WOULDN'T BE SEEING THIS TRANSFER BACK AND FORTH. SO I

JUST IT WOULD BE IT WOULD BE GREAT TO KNOW AGAIN, IF IT'S IF IT'S A TON OF EFFORT AND THAT'S LIKE, PLEASE LET US KNOW. I DON'T WANT TO PUT PEOPLE ON, YOU KNOW, WILD GOOSE CHASES AND STUFF. I JUST I'M,

IT WAS MORE OF A CURIOSITY. SO OKAY, SO JUST WANT TO OPEN THIS UP TO THE DYESS TO SEE IF ANYONE ELSE HAS ANY QUESTIONS. COUNCIL PRINCIPAL GO. HEY, DIRECTOR CAIN. SO I THINK I'M PRETTY INTERESTED. I

KNOW YOU MENTIONED PREMIUMS AND VERY UNDERSTANDABLE. I THOUGHT IT WAS A GREAT KIND OF POINT TO BRING UP THE 900 EMPLOYEES UNDER OUR COVERAGE AND ROUGHLY THE 30,000 THAT'S, YOU KNOW, ALLOCATED PER

EMPLOYEE DOING THE QUICK MATH WITH, YOU KNOW, WHAT'S CURRENTLY BEING TRANSFERRED HERE. IT AMOUNTS TO ABOUT $7,000 PER EMPLOYEE. SO MAYBE, YOU KNOW, ROUGHLY LIKE 25% OF THE ESTIMATED BUDGET PER YEAR.

SO IF THAT'S TO COUNCILPERSON BENDER'S POINT, IF THERE'S SOMETHING WE CAN DO TO UPDATE THAT PROJECTION, THAT'S ONE WAY TO KIND OF BE A LITTLE BIT MORE ON THE NAIL. BUT I THINK THE OTHER SIDE OF IT IS

JUST LIKE INSURANCE COMPANIES, WE'RE WE'RE ESSENTIALLY ACTING AS OUR OWN INSURANCE COMPANY BY BEING SELF-INSURED. AND I KNOW, YOU KNOW, OUT IN THE PRIVATE SECTOR, WHEN INSURANCES GET TOO EXPENSIVE,

THERE ARE CERTAIN THINGS THAT ARE MAYBE LIMITED. AND I'M JUST CURIOUS, HAS THE CITY UNDERGONE AND AGAIN, IF YOU DON'T HAVE THIS ANSWER RIGHT NOW, THAT'S FINE. I'M JUST CURIOUS IF THERE'S ANY SORT OF

KIND OF THRESHOLDS OR SPECIFIC REQUIREMENTS WE SET FOR THE TYPES OF CARE OR THE TYPES OF INCIDENTS THAT INCIDENCES THAT YOU KNOW, ARE COVERED OR. YEAH, YEAH. I MEAN, LOOK, I MEAN, IT'S A, WE COULD

TALK FOR DAYS ABOUT THE HEALTH PLAN AND THE OFFERINGS, BUT WE LOOK AT THINGS LIKE THE COST OF PRESCRIPTION MEDICATIONS. WE LOOK AT THINGS, YOU KNOW, A COST OF, OF CARE AND LONG TERM FACILITIES. IF WE

HAVE TO CARE, COST OF CARE OF CERTAIN SURGERIES. AND WE, YOU KNOW, WE HAVE RATES NEGOTIATED AT PLACES. I MEAN, IT'S A, IT'S A, IT'S A DEEP, DEEP DIVE THAT WE TAKE. AND, YOU KNOW, WE'RE GOING TO BE,

WE'RE GOING TO BE TALKING ABOUT THAT IN THE COMING. I'M NOT, I'M NOT REALLY READY TO TO TALK ABOUT THE DETAILS, BUT WE'VE FOUND SOME SIGNIFICANT COST SAVING MEASURES THAT WE'RE GOING TO BE BRINGING TO

YOU AS PART OF THE 2027, ACTUALLY, BEFORE THE 2027 BUDGET. IF YOU GIVE ME A COUPLE OF WEEKS TO TO PROPERLY ALERT OUR EMPLOYEES. SURE. NO, AND I APPRECIATE THAT. AND I THINK, YOU KNOW, WE ALL HEAR

ABOUT RISING COSTS. AND, YOU KNOW, OBVIOUSLY ALL OUR CONSTITUENTS ARE DEALING WITH THOSE. AND SO IT'D BE GOOD TO UNDERSTAND WHAT SOME OF THE HIGH CONTRIBUTORS ARE. I KNOW THERE'S ONE OFF EVENTS THAT,

YOU KNOW, HAPPEN. AND, YOU KNOW, THERE'S NOTHING PREVENTING THAT FROM HAPPENING. BUT IF THERE'S THINGS THAT WE'RE SEEING THE TREND AND WE CAN REACT IN A WAY THAT, YOU KNOW, KIND OF ALLOWS US TO

MAINTAIN THE SAME STANDARD OF, OF COVERAGE AND CARE, BUT NOT NECESSARILY, YOU KNOW, TAKE ON UNNECESSARY EXPENSE IF THERE'S A WAY TO, YOU KNOW, TRY ONE THING. I'LL TELL YOU, WE AT THE CITY OF ALLENTOWN

HAVE NO SPOUSAL COORDINATION, WHICH MEANS IF YOU WORK FOR THE CITY, WE DON'T ASK ANY QUESTIONS. AND EVERYBODY, ALL OF YOUR DEPENDENTS AND SPOUSE IS COVERED. SO WHAT THAT REALLY MEANS IS IF YOUR SPOUSE

IS OFFERED FROM THEIR EMPLOYER, A SIMILAR HEALTH CARE PLAN, THEY COULD STILL CHOOSE TO COME ON OURS. OFTEN THE EMPLOYER WILL PAY THEM NOT TO BE ON THEIRS, TO BE ON OURS. AND THEN THE TAXPAYERS OF

ALLENTOWN SUBSIDIZE THAT. WE'RE TRYING TO FIND A FAIR WAY TO RESPECT THAT. WE HAVE A GOOD PLAN, AND PEOPLE ARE ENTITLED TO THAT LEVEL OF CARE. BUT WE WANT TO INCENT PEOPLE, MAYBE NOT TO BE IN OUR PLAN

IF THEY DON'T HAVE TO BE. AND WE WANT TO, YOU KNOW, WE WANT PEOPLE TO PAY THEIR FAIR SHARE IF THEY HAVE THE OPPORTUNITY TO GO SOMEWHERE ELSE AND THEY DON'T. SO WE DON'T WANT TO PUT ALL OF THAT ON THE

BACKS OF THE TAXPAYERS. THAT'S THAT'S ONE EXAMPLE OF SOME OF THE THINGS. WE'RE ALSO LOOKING AT CERTAIN MEDICATIONS AND THE COSTS ASSOCIATED WITH THOSE MEDICATIONS AND WHETHER THEY'RE WHETHER THEY'RE

MEDICALLY NECESSARY, YOU KNOW, IN THE SAME WAY THAT WE WOULDN'T COVER YOUR COSMETIC SURGERY, WE MAY NOT CHOOSE TO COVER CERTAIN MEDICATIONS THAT DON'T HAVE A MEDICAL PURPOSE. OR I KNOW THE COMMON ONE

IS GENERICS VERSUS NAME BRANDS. I'M NOT SURE. BUT AGAIN, WE DON'T HAVE TO DELVE IN. SURE, WE OUR UNION CONTRACTS WERE LOCKED INTO $5 GENERIC VERSUS $10 NAME BRAND I, WHICH I, I'VE, YOU KNOW, WE'RE

GOING TO PUT THAT INTO OUR UNION CONTRACTS GOING FORWARD. WE'RE GOING TO DO A STUDY AND SEE WHAT PEOPLE REALLY OUGHT TO BE PAYING. IT'S NOT LIKE YOU SHOULDN'T BE PAYING $5 FOR AMOXICILLIN, BUT THERE

ARE MEDICATIONS THAT ARE VERY EXPENSIVE THAT WE SUBSIDIZE A GREAT PORTION OF. UNDERSTOOD. THANK YOU. ANYONE ELSE? I THINK AS AS YOU START TO DO THIS RESEARCH, I WOULD I'D BE CURIOUS IF YOU COULD ALSO

FIND OUT LIKE WHAT OTHER MUNICIPALITIES ARE DOING AND HOW WE COMPARE. I'M CURIOUS HOW WE COMPARE TO MUNICIPALITIES OF OUR SIZE, WHETHER THEY'RE NEARBY OR DIFFERENT STATES, AND MAYBE JUST EVEN SOME OF

OUR NEIGHBORING MUNICIPALITIES AND KIND OF SEE WHERE WE ARE AS A AS A CITY. AND MAYBE THERE'S SOME ADJUSTMENTS THAT, BASED ON WHAT WE'RE SEEING ELSEWHERE, MIGHT MAKE SENSE. SO SOMETHING TO THINK

ABOUT. IF YOU CAN BRING THAT UP, THAT DATA TO COUNCIL WOULD BE NICE TO UNDERSTAND THAT FOR SURE. YEAH. THANK YOU. I JUST HAVE ONE OTHER FOLLOW UP QUESTION. SO JUST YOU HAD MENTIONED THE 13 MILLION IS

WHAT WE'VE OUR SPEND SO FAR, WHICH MEANS WE STILL HAVE TEN SITTING IN THE, IN, IN THE RISK FUND FOR THIS IS THERE. JUST HELP ME UNDERSTAND WHY ARE WE MOVING THE 6.5 NOW VERSUS JUST FOLDING THAT INTO

THE BUDGET FOR 2027? BECAUSE WE KNOW THAT WE'RE ABOUT TO GET HIT. HISTORICALLY, WE'RE ABOUT TO GET HIT WITH A LOT OF CLAIMS RIGHT NOW. THIS IS THE PERIOD, FOR WHATEVER REASON THAT WE GET HIT WITH A

LOT OF CLAIMS. OKAY. THAT'S HELPFUL. THAT'S MY FIRST CYCLE ON THIS. SO I'M ASKING SOME QUESTIONS ON IT. I ASKED THE SAME QUESTION. OKAY. WELL, GOOD. WE'RE ON THE SAME PAGE. SO WITH THAT, DOES ANYONE

ELSE HAVE ANY QUESTIONS ON THE DICE. ALL RIGHT. I'D TAKE A MOTION TO TO MOVE IT FORWARD FAVORABLY. I THINK YOU YOU HAVE TO SORRY. YOU'RE ON THE. I'LL MAKE A MOTION. ALL RIGHT. ALL THOSE IN FAVOR? AYE.

THANK YOU. THIS MEETING. OH, I DIDN'T SEE * This transcript was compiled from uncorrected Closed Captioning.