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Recommendation to authorize City Manager to execute an agreement with ING Employee Benefits (ReliaStar Life Insurance Company), for healthcare specific stop-loss reinsurance coverage with a $500,000 deductible level at a cost of $823,936 for a 12-month period; and authorize City Manager to execute any subsequent amendments necessary to maintain current benefit levels and remain in compliance with state and federal laws. (Citywide)
DISCUSSION
On September 20, 2011, the City Council approved health and life insurance agreements for the plan year that began on January 1, 2012. In 2008, the City took a new approach to stop-loss insurance for large claims that exceeded $500,000 per individual claim within a plan year. Specifically, it was determined that the City’s self-funded medical and prescription drug programs should be supported by a specific stop-loss agreement instead of what at that time was an aggregate approach.
In addition, staff committed to return to City Council with the insurance carrier selected to provide the City’s specific stop-loss insurance following a competitive bid process closer to the plan year start date. The selection process has been completed, and ING Employee Benefits proposed the most competitive rates and provided the ability to data interface with the City’s current self-funded medical carriers. While the negotiated contract with ING Employee Benefits is 44% higher than the rate for 2011, it is significantly less than the renewal rate for Elite Underwriting Services, last year’s carrier, as well as all other carriers that submitted a quote. These rates reflect large claims experienced during 2011. The remainder of the market declined to quote because their rates were not competitive.
The specific stop-loss agreement with ING Employee Benefits will run concurrently with the City’s benefit plan carrier contracts, from January 1, 2012 through December 31, 2012.
This letter was reviewed by Linda Trang, Deputy City ...
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