ITEM TITLE:
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Approval of Contracts Comprising the City and School Health Insurance Benefit Plan for the Twelve Months Beginning April 1, 2018.
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SUBMITTED BY: Brian Carlson, Finance Director
FISCAL NOTES:
Expenditure Required: $3.43MM through 2018
Unencumbered Balance: $3.14MM
Funding Source: Pro-rated by Department; Cost code 41300 - Benefits
RECOMMENDATION:
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Approve three contracts comprising the City/School Health Insurance Benefit Plan for the 2018-2019 plan year.
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SUMMARY STATEMENT:
* This agenda item is comprised of three contracts:
o Medical Rehabilitation Consultants (MRC) - case management
o Meritain Health - third-party administrator (TPA)
o Sun Life - stop loss insurance
* The Meritain materials also contain the School TPA agreement. This is not for Council to approve, but is included for reference.
* The bottom-line change to premiums is:
o 18% increase in premiums for the new plan-year
* $14.65 increase in monthly employee contribution
* $351.70 increase in monthly employer cost
o 14% ($291K) increase over the adopted 2018 budget
* Total monthly premium per employee is $2,383
o $2,288.02 Employer contribution
o $95.33 Employee contribution
* All attached contracts have been reviewed by Legal and are approved as to form
BACKGROUND:
* The Health Insurance benefit is a $6MM annual self-insured plan covering approximately 240 employees (plus dependents), divided nearly evenly between City and School.
* "Premiums" are paid to the plan from City/School payroll contributions, and are calculated based on known fixed costs plus estimated variable costs (claims).
o Fixed Costs reflect services established in the three attached contracts, plus the Broker/Consultant contract with Parker, Smith, Feek, which was approved on January 16, 2018
o Variable costs are covered claims, which flow through to the Health Insurance Fund balance. Fund balance rises and falls based on how actual costs relate to initial estimated costs.
o Var...
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