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OPENPUBLICA · PUBLIC MEETING RECORD

Record of Proceedings

Red Wing City Council Workshop: Employee Benefits and ICHRA Analysis - October 5, 2026

City Council — Monday, October 5, 2026

BodyRed Wing, Minnesota

SessionCity Council

DateMonday, October 5, 2026

StatusFILED

Video Record

0:00 / 2:20:38

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Speaker numbers apply only to this recording.

Speaker 1

1:39

All right,

Speaker 2

1:40

welcome.

1:40

Good evening.

1:41

This is October 5th workshop, Red Wing City Council workshop.

Unassigned speaker

1:45

It's

Speaker 2

1:46

5 30, and we have two items on tonight.

1:48

I will call us to order, but our workshop items are an update from DDA HR on our survey and benefits analysis.

1:54

And then our two B is a pr presentation from IntelliSense.

1:58

So we have a couple presenters and then I believe our own staff will be finishing up tonight.

2:03

But um I think Tessa is online, right?

Speaker 3

2:06

Yes.

Unassigned speaker

2:06

So

Speaker 2

2:07

if you wouldn't mind, just please introducing yourself and again um giving us a brief overview would be wonderful.

2:12

Thanks for being with us tonight.

Speaker 1

2:15

Perfect.

2:15

Thank you for having me, Mayor and Council members.

2:18

Um I'm Tessa Melvin from DDA, and I'm here to present um on the employee engagement survey that we did.

2:24

So if you remember you heard from me a couple weeks back when we did a benefit survey on your comparable um entities that you use for benchmarks.

2:34

Um now we kind of asked employees of what that you offer, how do they feel about it, what do they like, what would they what would they like?

2:42

Um just to give you some background.

2:44

So I will share my screen.

2:54

Can you see my screen?

Speaker 2

2:57

Nope, not yet.

Speaker 1

3:08

There we go.

3:09

Now we see

Unassigned speaker

3:10

it.

Speaker 1

3:10

Perfect.

3:11

Okay, perfect.

3:12

So um for this part of the employee engagement survey, there was a hundred and two respondents, and that's what the information I'm going to give

Unassigned speaker

3:20

you.

Speaker 1

3:21

Um will be based on that.

3:25

Um from the market though, I just wanted to provide some a summary of those market findings.

3:31

I know there was some questions and concerns after I presented.

3:35

Um, and I just wanted to share that in this um presentation as well for the council, and I know there was a FAQ that was sent out to employees, but um, from the market finding, and that's when we did the benefits of your benchmark communities.

3:49

Um you're unique because you use ICRA um and you're self-insured, so you are very different than most entities.

3:57

Umusual.

4:03

Red Wing offers variety uh various benefits to employees based on their FLSA status.

4:08

So um not everyone has the same benefits or opportunities of benefits as based on your position in the city.

4:16

Um you exceed um the market and life insurance um for exempt employees, but um not for the non-exempt.

4:24

Like most of your benchmarks, you do have PTO.

4:28

Um it's generally in line with the market.

4:31

Some cities do provide a little bit more at the beginning of employment.

4:34

Um the in for um employees for cash out vacation and sick time, you're pretty similar to the market.

4:43

Red wing um is one of the few um in comparison that compensates employees for waiving their health insurance, so opting out of a plan.

4:51

You are very unique, and then offering the Cavira telehealth home and on-site benefit.

Unassigned speaker

5:00

generally in line with the market some cities do provide a little bit more at the beginning of employment um the in for um employees for cash out vacation and sick time you're pretty similar to the market red wing um is one of the few um in comparison that compensates employees for waiving their health insurance so opting out of a plan you are very unique and then offering the cavira telehealth home and on-site benefit um performance based pay comes in several variations so not everyone is paid the same consistency um and performance pay is unique because it varies by each group so that was just kind of the benefits overall for the benchmarks now we'll get into the employee questions so this question just asks you know what I think we do oh sorry to interrupt you I just can we maybe any council questions just on that first oh sure yeah I'm sorry benefit study survey results just best question do um other cities who's ever speaking is cutting out I'm sorry I don't know why oh do other cities also offer performance pay um some do it's very unique um because it's hard to administer because you have to have employees that understand it and especially managers that are able to um rate it but it is offered in some entities but not as common as a performance um classification system that would allow a step increase if you're meeting expectations okay great thank you so much does that yeah any other questions from the council on the actual benefit survey all right thanks then we'll move on to the employee survey perfect thanks yeah so this one just kind of asked are you currently either you're in the city's group health program so you have the largest um amount of employees in there if you participate in the health insurance opt-out meaning you're opting out of any plan the ICRA and then a couple of people preferred not to answer so this just kind of sets the stage that you most of your employees that are in your insurance plan have the group health insurance but you do have um about 38 employees that are in the ICRA program.

Speaker 1

6:56

Um and you can and the reason we kind of pull that we could pull it out separately because that was one thing we talked about you know per the group plan how do they answer ICRA um because they're you're going to see later that their opinions may vary because of what is offered to them and their experiences have been different so I would say the one thing coming out of the employee um benefit survey asking them is you know it's not consistently applied throughout the city and people have various opinions on that um the opportunities for professional growth um you can kind of see here you know the majority um agree um the one thing I will say with the survey a large percentage um just it was either neutral in this question and just throughout the survey um so they're either happy or

Unassigned speaker

7:49

they

Speaker 1

7:50

don't disagree or they don't have any feelings towards the question which makes it hard to see like are they you know do they appreciate it do they like it or do they not so I'm just going to kind of move forward on that and you can see the disagree and um strongly disagree.

Unassigned speaker

8:07

Please with the career advancement opportunities again you have a majority that agree um with that statement my organization is dedicated to my professional development um this one you have again um 86 employees or about 48 percent that agree with that some strongly um some disagree and you know but again on another large group is just neutral I'm satisfied with the job relating training and or training my organization offers um so this one again you have quite a few that agree or strongly agree um with that statement I'm satisfied that I have opportunities to apply my expertise um so this one you had the most people that applied or chose agree or strongly disagree I mean agree I'm sorry that wrong I'm satisfied with the investment my organization makes in training um so here you'll see that you have a little bit more kind of on the disagreement than you had in past um but again you're holding strong um with 41% agreeing and another about 10% strongly agreeing I understand the full range of benefits offered um this one again shows a large percent agree or strongly agree um with that statement um benefit information is easy to find when needed so again agree or strongly um agree large percent again you have a large lot in the middle so either they don't use the benefits or they don't have to find it or they just don't have an opinion it's hard to say the city communicates benefit details clearly and effectively um this one shows again you have a large percentage saying agree or strongly agree um I know who to contact um when I have questions so they definitely know the staff and who's able to help them so that reflects well on the HR team on the mere materials provided help me understand my benefits again you have a large percentage of agree and strongly agree that um agree with that statement um I'm satisfied with the current health insurance options so this one um

Speaker 1

10:02

I know who to contact when I have questions, so they definitely know the staff and who's able to help them.

10:08

So that reflects well on the HR team.

10:12

The mere materials provided help me understand my benefits.

10:16

Again, you have a large percentage of agree and strongly agree that agree with that statement.

10:28

So this one you see again, you still have a good percentage of agree.

10:33

You have that neutral, but you're seeing a little bit increase in the disagree.

10:38

Um, and part of that goes into we'll go into a little bit later is just the opportunity or options that each one is offered as it's not consistent through the city.

10:47

The cost of my health insurance fee feels reasonable.

10:50

Um you have, you know, 32% agree and six.

10:58

Um, again, a big strong in that neutral um zone as well.

Discussion Breakdown — Share of Meeting

Personnel Matters████████████████████████████████32%

Fiscal Sustainability█████████████████████21%

Health Insurance█████████████████17%

Employee Benefits███████████11%

Budget Equity Analysis███████7%

Procedural█████5%

Healthcare Access████4%

Workforce Development██2%

Technology and Innovation█1%

Summary of Proceedings

Red Wing City Council Workshop: Employee Benefits and ICHRA Analysis - October 5, 2026

The Red Wing City Council held a workshop on October 5, 2026, from 5:30 p.m. to 7:49 p.m., to discuss employee benefits. The agenda included an update from DDA/HR on the employee benefits survey and a presentation from Intellicents comparing the city's ICHRA (Individual Coverage Health Reimbursement Arrangement) plan to a group health insurance plan. Council members heard from DDA/HR consultant Tessia Melvin and Intellicents representative Lynn Kermes, along with city staff. No formal votes were taken; the workshop provided guidance for the upcoming budget and insurance renewal decisions.

Discussion Items

2.A. Update from DDA/HR on Employee Benefits Survey

Tessia Melvin presented results from an employee benefits survey with 102 respondents. She summarized market findings, noting the city is unique due to its ICHRA and self-insured status, and that benefits vary by FLSA status.
Key survey findings: Approximately one-third of responses were neutral, which was higher than typical; neutral may indicate employees are satisfied or have no opinion. Employees on the ICHRA plan showed higher dissatisfaction on questions about health insurance options (22% strongly disagreed, 38% disagreed), cost of health insurance, and overall satisfaction.
Council Member Snyder asked about questions 40-42, noting a disconnect: 64% agreed benefits positively impact job satisfaction, almost 70% said benefits influence decision to stay, but only 41% agreed "I feel supported by the city through the benefits I receive." Melvin explained this may reflect overall dissatisfaction or a desire for more benefits.
Council Member Norton observed that some respondents are not on city benefits, affecting the data. Council President Farrar noted a large neutral response; Melvin said neutral can indicate employees are fine with the status quo or rushing through the survey.
On comparison to other cities, Melvin stated that for the most part results are similar, but dissatisfaction is higher due to the city's unique insurance structure.
Additional findings: Employees ranked total out-of-pocket expenses, low deductibles, and HSA contributions as most important. Common concerns included training/development (e.g., CDL training costs), difficulty navigating benefit information, and a desire for additional benefits such as single-plus-one health coverage, more dental/vision, and performance bonuses for non-exempt employees.

2.B. Presentation from Intellicents on Health Insurance and ICHRA to Group Analysis

Lynn Kermes from Intellicents reviewed the ancillary RFP process, noting that finalists for dental, vision, and PFML (paid family and medical leave) are being evaluated, with employee feedback on dental and vision finalists.
He presented a claims review for the group plan: from September 2024 to August 2025, 10 high-cost claimants (over $70,000 each) accounted for $2 million (60% of total claims). In the more recent period (September 2025 to August 2026), only 3 high-cost claimants were identified, indicating favorable claims trends.
Kermes explained the original decision to move exempt employees to ICHRA in 2023 was driven by a projected 31.9% renewal increase. Removing the exempt group reduced the renewal to 15.88%; the city and employees have saved premium dollars since.
Financial analysis for 2027: If exempt employees stay on ICHRA, total plan cost increases 4.59% ($243,000). If all employees are on the group plan, total cost increases 9.8% ($5.8 million), a difference of $276,000. The employer cost would increase by $110,000 (2.13%) and employee contributions by $166,000 (43% aggregate), but individual employee premium changes would be small: e.g., $1.44/month for single, $5.09 for family.
Key difference in out-of-pocket maximums: Group plan has a $6,700 maximum; individual market gold plans have a $13,000 maximum. Kermes noted that an HRA and ICHRA cannot be combined to bridge the gap.
A census-based risk analysis of the ICHRA population scored 14 on a 24-point scale (12 is neutral), indicating moderate risk. Kermes cautioned that future claims data cannot fully mitigate risk, and a return to ICHRA later would likely not regain the original 15.88% discount.
City staff (HR Manager Alex Saxe, Finance Director Marshall Hallock, Assistant Finance Director Tony Schultz) presented pros and cons of ICHRA, including complexity, administrative burden, and employee shopping difficulties. They also detailed funding scenarios for 2027, noting that the levy currently has $301,000 set aside; moving to the group plan would require about $66,000, leaving $235,000 of excess levy authority.
Council members discussed the risk profile. Council President Farrar expressed concern about future volatility. Council Member Beise stated he was comfortable with a moderate risk profile and thought now was the right time to move exempt employees back. Council Member Snyder was comfortable with risk but wanted to understand the budget better. Council Member Norton supported the move, citing employee concerns. Council Member Lambert was in favor. Council Member Goggin was comfortable with risk but leaned against the timing due to cost to residents. Council Member Kliewer wanted to hear from employees and see the actual plan policies.

Key Outcomes

Council discussion provided staff with guidance: a majority of council members (at least four) expressed comfort with a moderate risk profile for 2028 and beyond, and supported moving exempt employees back to the group plan for the 2027 renewal. Specifically, Council Members Beise, Snyder, Norton, and Lambert indicated support; Council President Farrar and Council Member Kliewer wanted more information (narrative survey responses and plan documents) before finalizing; Council Member Goggin was not supportive of the timing.
Staff will bring a formal insurance renewal approval to the next council meeting on October 12, 2026, with additional data from the survey narrative responses and plan details for 2027.
No formal motion or vote was taken; the workshop was for discussion and direction.

Meeting Transcript

All right, welcome. Good evening. This is October 5th workshop, Red Wing City Council workshop. It's 5 30, and we have two items on tonight. I will call us to order, but our workshop items are an update from DDA HR on our survey and benefits analysis. And then our two B is a pr presentation from IntelliSense. So we have a couple presenters and then I believe our own staff will be finishing up tonight. But um I think Tessa is online, right? Yes. So if you wouldn't mind, just please introducing yourself and again um giving us a brief overview would be wonderful. Thanks for being with us tonight. Perfect. Thank you for having me, Mayor and Council members. Um I'm Tessa Melvin from DDA, and I'm here to present um on the employee engagement survey that we did. So if you remember you heard from me a couple weeks back when we did a benefit survey on your comparable um entities that you use for benchmarks. Um now we kind of asked employees of what that you offer, how do they feel about it, what do they like, what would they what would they like? Um just to give you some background. So I will share my screen. Can you see my screen? Nope, not yet. There we go. Now we see it. Perfect. Okay, perfect. So um for this part of the employee engagement survey, there was a hundred and two respondents, and that's what the information I'm going to give you. Um will be based on that. Um from the market though, I just wanted to provide some a summary of those market findings. I know there was some questions and concerns after I presented. Um, and I just wanted to share that in this um presentation as well for the council, and I know there was a FAQ that was sent out to employees, but um, from the market finding, and that's when we did the benefits of your benchmark communities. Um you're unique because you use ICRA um and you're self-insured, so you are very different than most entities. Umusual. Red Wing offers variety uh various benefits to employees based on their FLSA status. So um not everyone has the same benefits or opportunities of benefits as based on your position in the city. Um you exceed um the market and life insurance um for exempt employees, but um not for the non-exempt. Like most of your benchmarks, you do have PTO. Um it's generally in line with the market. Some cities do provide a little bit more at the beginning of employment. Um the in for um employees for cash out vacation and sick time, you're pretty similar to the market. Red wing um is one of the few um in comparison that compensates employees for waiving their health insurance, so opting out of a plan. You are very unique, and then offering the Cavira telehealth home and on-site benefit. generally in line with the market some cities do provide a little bit more at the beginning of employment um the in for um employees for cash out vacation and sick time you're pretty similar to the market red wing um is one of the few um in comparison that compensates employees for waiving their health insurance so opting out of a plan you are very unique and then offering the cavira telehealth home and on-site benefit um performance based pay comes in several variations so not everyone is paid the same consistency um and performance pay is unique because it varies by each group so that was just kind of the benefits overall for the benchmarks now we'll get into the employee questions so this question just asks you know what I think we do oh sorry to interrupt you I just can we maybe any council questions just on that first oh sure yeah I'm sorry benefit study survey results just best question do um other cities who's ever speaking is cutting out I'm sorry I don't know why oh do other cities also offer performance pay um some do it's very unique um because it's hard to administer because you have to have employees that understand it and especially managers that are able to um rate it but it is offered in some entities but not as common as a performance um classification system that would allow a step increase if you're meeting expectations okay great thank you so much does that yeah any other questions from the council on the actual benefit survey all right thanks then we'll move on to the employee survey perfect thanks yeah so this one just kind of asked are you currently either you're in the city's group health program so you have the largest um amount of employees in there if you participate in the health insurance opt-out meaning you're opting out of any plan the ICRA and then a couple of people preferred not to answer so this just kind of sets the stage that you most of your employees that are in your insurance plan have the group health insurance but you do have um about 38 employees that are in the ICRA program. Um and you can and the reason we kind of pull that we could pull it out separately because that was one thing we talked about you know per the group plan how do they answer ICRA um because they're you're going to see later that their opinions may vary because of what is offered to them and their experiences have been different so I would say the one thing coming out of the employee um benefit survey asking them is you know it's not consistently applied throughout the city and people have various opinions on that um the opportunities for professional growth um you can kind of see here you know the majority um agree um the one thing I will say with the survey a large percentage um just it was either neutral in this question and just throughout the survey um so they're either happy or they don't disagree or they don't have any feelings towards the question which makes it hard to see like are they you know do they appreciate it do they like it or do they not so I'm just going to kind of move forward on that and you can see the disagree and um strongly disagree. Please with the career advancement opportunities again you have a majority that agree um with that statement my organization is dedicated to my professional development um this one you have again um 86 employees or about 48 percent that agree with that some strongly um some disagree and you know but again on another large group is just neutral I'm satisfied with the job relating training and or training my organization offers um so this one again you have quite a few that agree or strongly agree um with that statement I'm satisfied that I have opportunities to apply my expertise um so this one you had the most people that applied or chose agree or strongly disagree I mean agree I'm sorry that wrong I'm satisfied with the investment my organization makes in training um so here you'll see that you have a little bit more kind of on the disagreement than you had in past um but again you're holding strong um with 41% agreeing and another about 10% strongly agreeing I understand the full range of benefits offered um this one again shows a large percent agree or strongly agree um with that statement um benefit information is easy to find when needed so again agree or strongly um agree large percent again you have a large lot in the middle so either they don't use the benefits or they don't have to find it or they just don't have an opinion it's hard to say the city communicates benefit details clearly and effectively um this one shows again you have a large percentage saying agree or strongly agree um I know who to contact um when I have questions so they definitely know the staff and who's able to help them so that reflects well on the HR team on the mere materials provided help me understand my benefits again you have a large percentage of agree and strongly agree that um agree with that statement um I'm satisfied with the current health insurance options so this one um

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