Council MIN 10-01-2013 SpecialCITY OF
Federal Way
MINUTES
FEDERAL WAY CITY COUNCIL
SPECIAL MEETING
Council Chambers - City Hall
October 1, 2013
5:30 p.m.
www.cityoffederalway.com
1. CALL MEETING TO ORDER
Mayor Priest called the meeting to order at 5:31 p.m.
City officials present: Mayor Skip Priest, Deputy Mayor Jim Ferrell, Councilmember Susan
Honda, Councilmember Jeanne Burbidge, Councilmember Bob Celski, Councilmember Diana
Noble - Gulliford and Councilmember Dini Duclos. Councilmember Kelly Maloney arrived at
5:44 p.m.
City staff present: City Attorney Pat Richardson and City Clerk Carol McNeilly.
2. FINANCIAL IMPACT OF AFFORDABLE CARE ACT
Doug Evans, President of R.L. Evans Company was in attendance to present information on
the financial impacts to the City of The Affordable Care Act. He provided background
information on his firm and listed the 18 municipal agencies they currently work with.
Beginning January 1, 2014 The Affordable Care Act or ACA aims to expand health coverage
which may have impacts to the City. Mr. Evans provided information on Insurance
Exchanges, which launched today for people to register for coverage effective January 1,
2014. Exchanges provide subsidies for those with income between 138% - 300% of Federal
poverty level.
The Employer Mandate requires employers who have more than 50 employees who work 30
hours per week to offer insurance to those individuals and their dependents, or pay taxes if an
employee obtains Exchange coverage and a premium tax credit. If the employer does not
offer minimum essential coverage to its full time employees (FTE) and their dependents and
one FTE receives a tax credit through an Exchange, the City's penalty is $2,000 times the
total number of FTEs (minus the first 30). Mr. Evans noted the City currently offers minimum
essential coverage. If an employer does offer coverage but it is not affordable (the cost for
self -only coverage exceeds 9.5% of the employees income), or does not provide minimum
value (60% actuarial test), and a FTE receives a tax credit through the Exchange, the penalty
is $3,000 time the number of FTEs receiving the tax credit. The City's current premium
sharing meets the affordability test and coverage meets Minimum Value test. The
implementation date of the Mandate is January 1, 2015.
Some of the changes under the ACA which are effective 2014 that may impact the City are
health plans do not have pre- existing condition exclusions; added coverage for miscellaneous
City Council Minutes — October 1, 2013 Special Meeting Page 1 of 2
preventive services; prescription co -pays will need to be tracked along with other out -of-
pocket medical expenses to ensure that the ACA limit is not exceeded (the limits are $6,350
for individuals and $12,700 for families).
Mr. Evans reviewed the details of the following ACA taxes and fees; Patient - Centered
Outcome Research Institute (PCORI); Transitional Reinsurance Tax - a per capita fee that
supports a transitional reinsurance fund for insurers offering individual insurance through
Exchanges; Carrier Fee (this only pertains to insurance companies); and other fees that will
support Exchanges. The Cadillac Tax, which is effective in 2018, imposes 40% excise tax on
the value of coverage exceeding $10,200 for individuals and $27,500 for families; $11,800
and $30,950 for retirees and employees in high -risk jobs. It does not include the cost of
"standalone" dental /vision plans. There is a general concern regarding the trend of premium
increases that could cause the City to bump up against limits in 2018.
3. EXECUTIVE SESSION
The Mayor, Council and City Attorney adjourned to Executive Session at 5:51 p.m. to discuss
Collective Bargaining Pursuant to RCW 42.30.140(4)(b) for approximately one hour. They
adjourned from Executive Session at 6:51 p.m.
4. ADJOURNMENT
The meeting was adjourned at 6:51 p.m.
Attest:
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Carol McNeilly, CMC, City Clerk
Approved by Council: October 15, 2013
City Council Minutes — October 1, 2013 Special Meeting Page 2 of 2