AGENDA TITLE:
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Adopt a Resolution Approving a Side-Letter Agreement with AFSCME General Services Unit and AFSCME Maintenance & Operators Unit, Amending the City's Contribution to Medical Insurance Premiums (HR)
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MEETING DATE:
January 17, 2024
PREPARED BY:
Adele Post, Human Resources Manager
recommendation
RECOMMENDED ACTION:
Adopt a Resolution Approving a Side-Letter Agreement with AFSCME General Services Unit and AFSCME Maintenance & Operators Unit, to amend the City's contribution to medical insurance premiums.
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BACKGROUND INFORMATION:
In 2012, the City experienced significant increases to CalPERS medical premiums, greatly reducing employees' net take home pay. During the negotiation process, the City and AFSCME had agreed to minimize the increases to employees earning less than $40,000 a year. The City agreed to contribute up to an additional three percent (3%) towards the medical premiums for those employees earning less than the annual threshold of $40,000.
Over the next several years, the salary threshold increased incrementally to $43,000 and then to $47,000 in 2021. During negotiations in 2022, the City agreed to increase its contribution for medical premiums for the contract term of January 1, 2023 through December 31, 2025; however, the City maintained the $47,000 threshold for subsidized premiums.
In August 2023, the City received the CalPERS premium rates for calendar year 2024, which included significant increases across all medical plans. Many plans experienced double-digit percentage increases, including Kaiser which is the lowest cost option available to employees who live in Lodi and the most commonly selected health care provider for all employees. AFSCME requested that the City consider addressing the increased medical premiums for their membership. The City and AFSCME met and conferred and the City proposes to increase the salary threshold from $47,000 to $55,000 a year for the subsidized medical...
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