TITLE
Recommendation to authorize City Manager, or designee, to execute an agreement with VOYA, for healthcare specific stop-loss reinsurance coverage with a $500,000 deductible level, at an estimated cost of $2,161,743 for a 12-month period retroactively effective January 1, 2023; and, execute any subsequent amendments necessary to maintain current benefit levels and remain in compliance with State and federal laws. (Citywide)
DISCUSSION
The Human Resources Department administers the Employee Benefits Program (Program) for active and retired City of Long Beach (City) employees and their qualified dependents. The Program includes a self-insured PPO medical plan option and stop-loss insurance to protect the City against large claim losses. The stop-loss insurance coverage is an important component of the City employee’s benefits program to provide protection against catastrophic or unpredictable losses due to high-cost claims. The stop-loss insurance reimburses the Program in the event an individual plan participant has medical claims that exceed $500,000 within a plan year. The industry trend for coverage at this level is at 20 to 25 percent.
On August 23, 2022, the City Council approved health and life insurance agreements for the plan year that begins on January 1, 2023; however, at that time, the stop-loss insurance rates had not yet been finalized and staff committed to returning to the City Council for authorization to contract for the specific stop-loss insurance.
Alliant Insurance Services (Alliant), the City’s current health insurance consultant, conducted a competitive bid process in which the City’s current rate, demographics, and historical large claims experience were evaluated by the market. Of the 12 carriers who were solicited to provide stop-loss coverage, 9 carriers declined to quote due to uncompetitive rates, the City’s ongoing high-cost claimant risk, and historical multi-year premium vs. high-cost claim loss ratio. There were three carr...
Click here for full text