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CITY COMMISSION AGENDA ITEM |
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Department: |
City Manager’s Office – Human Resources Division |
Commission Meeting Date: October 16, 2018 |
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Staff Contact: |
Lori Carnahan/Michelle Spreer |
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Recommendations/Options/Action Requested: |
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Authorize the City Manager to enter into contract negotiations with Aetna to provide stop-loss coverage at the current levels for the City’s Employee Healthcare Plan for 2019 with a total annual premium of $1,269,373. |
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Executive Summary: |
Hays Companies, the City’s benefits consultants, sent out a Request for Proposal (RFP) on behalf of the City for Stop Loss Insurance. Five companies responded. Aetna – 22.9% increase, Unimerica/Optum – 23.0% increase, SwissRe – 25.9% increase, Companion Life – 29.5% increase and Sun Life – 39.9% increase.
Aetna is the only vendor that was willing to lock in the renewal with no additional data claims data needed. They did place a laser on one claimant. The laser would raise the individual limit on this one claimant to $300,000 before Aetna would be liable for claims. This is potential risk to the plan of $175,000 in additional claims cost.
Aetna has also agreed to one month ‘fee holiday’ on the administrative fees which totals $35,000 in 2019.
The Human Resources division budgeted for a 20% increase to stop loss premiums for 2019. The recommended renewal is slightly higher than budgeted parameters but the fee holiday will help offset the higher percentage. |
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Strategic Plan Critical Success Factor |
Effective Governance/Professional Administration Innovative Infrastructure and Asset Management Core Services Sound Fiscal Stewardship |
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Fiscal Impact (Amount/Source): |
The fiscal impact to the City is $1,269,373. This item was in the 2019 Healthcare Budget. |
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Attachments: |
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(for CMO use only) |
☐TM ☐DS ☒CT ☐BM |