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 $2,008,200 for a 12-month period retroactively effective January 1, 2022; 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 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 to the City’s employees benefit 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. Industry trend for coverage at this level is at or above 20.5 percent.
On September 7, 2021, the City Council approved health and life insurance agreements for the plan year that begins on January 1, 2022; 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, 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 was evaluated by the market. Of the ten (10) carriers who were solicited to provide stop-loss coverage, eight (8) 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. VOYA, the City’s current stop-loss ...
Click here for full text