Item Coversheet

*4.A.2.


Shakopee City Council
November 3, 2021


FROM:Chelsea Petersen, Assistant City Administrator
TO:Mayor and Council Members
Subject:
Modification to the benefit eligibility date for new hires. 
Policy/Action Requested:
Approve a modification to the benefit eligibility date for new hires to the first of the month after the first date of employment, and authorize staff to implement this change the city's various insurers. 
Recommendation:
Approve the action as requested.
Discussion:

Currently benefit-eligible positions need to wait until the first of the month after 30 days of employment to be eligible for health-related benefits. Depending on the start date of new employees there can be a nearly two month waiting period for insurance coverage to begin, which can create significant logistical and financial challenges for employees and their families. In order to alleviate some of these potential challenges, staff is proposing to modify the current waiting period to instead be the first of the month after the date of hire. This will likely result in a shorter waiting period in most instances, since many employers allow for coverage to continue through the month that an employee terminates their employment. 

 

If approved, this change would be implemented as part of the open enrollment process and take effect January 1, 2022. Under current practice any new employees with a December start date would not be benefit-eligible until February 1, 2022, but this modification would supersede that practice as the change would be effective on January 1, 2022. 

Budget Impact:
There would be little to no budget impact as backfilling of existing positions already have wages and benefits budgeted for the full year, and newly added benefit-eligible positions are typically budgeted for wages and benefits based on an estimated start date.