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CITY COMMISSION AGENDA ITEM |
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Department: |
Human Resources |
Commission Meeting Date: October 4, 2016 |
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Staff Contact: |
Lori Carnahan, Human Resources Manager |
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Recommendations/Options/Action Requested: |
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Authorize the City Manager to execute the necessary agreements with Cigna Healthcare to provide stop-loss coverage at the current levels for the City’s Employee Healthcare Plan for 2017 with a total annual premium of $1,026,997. |
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Executive Summary: |
Stop-loss coverage is insurance that protects employers who self-fund their healthcare plans against catastrophic losses. The stop-loss carrier becomes liable for losses in excess of specified limits. Specific coverage insures the City for claims over a certain threshold relating to any one individual. Currently the city’s specific limit is set at $125,000. Aggregate coverage insures the City over a certain threshold related to all claims incurred.
Hays Companies, the City’s benefits consultants, sent out a Request for Proposal (RFP) on behalf of the City. Eight companies responded. The incumbent, Sun Life, provided a quote with a 38% increase. Cigna provided the most favorable quote. Both Cigna and Sun Life were given final items the City wished to have addressed before making a recommendation. Cigna ultimately provided the most financially favorable quote with the fewest restrictions. Their rate quote is valid through October 21, 2016.
The Human Resources division budgeted for a 20% increase to stop loss premiums for 2017. The recommended renewal is well below budgeted parameters for both premium and maximum claim liability. Cigna’s quote is a 4.4% increase over what we are currently paying for a total premium increase of $43,562 over 2016.
The 2016 stop loss claims to date are higher than they were this time last year. The City has paid approximately $745,000 in premiums with total claims reimbursement from Sun Life of approximately $654,000.
Other vendor contracts that are on auto renewal each year between RFP’s include ASI (Flexible Spending), Optum Health (COBRA administration), New Directions Behavior Health (EAP services), Cigna, Delta Dental and MedTrak. The city will continue the contract with each vendor for 2017.
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Strategic Goal Area: |
Other |
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Fiscal Impact (Amount/Source): |
The fiscal impact to the City is $1,026,997. This item was in the 2017 Healthcare Plan budget. |
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Attachments: |
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