HomeMy WebLinkAbout2009-2010 Employee BenefitsSubject: Renewal of Group Health
Dental Insurance, Life Insurance
Disability Coverage FY 09/10
A grove' for Submittal b City
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Insurance,
Long -Term
Manager
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Agenda No. 0q, 130
Department Ori
in: Administrative Services
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City Attorney: L�
City Clerk:
Date Submitted: August 18, 2009
For Agenda of: August 26, 2009
i er, City Manager
Exhibits:
1. Insurance Analysis and Recommendation from the Gehring Group
EXPENDITURE REQUIRED:
N/A
AMOUNT BUDGETED:
Included in the 2009 -2010
Proposed Annual Budget
APPROPRIATION
REQUIRED: N/A
HOME OF PELICAN ISLAND
CITY OF SEBASTIAN
AGENDA TRANSMITTAL
SUMMARY
Effective September 30, 2009, the city's group health, dental, vision and life and long term disability
insurance contracts will expire. All insurance carriers have agreed to renew our group insurance
policies at the same premiums as FY 2009, which means no increase. The only exception is the
Long Term Disability, which has an annual increase of $3,037 due to a loss ratio from (2) employees
currently receiving disability claims. For a more detailed explanation of the renewals of the group
insurance premiums, please see attached insurance analysis and recommendation report.
As a brief review, City staff and the Gehring Group are constantly reviewing our claims experience
and analyzing different courses of action for our group health insurance, to include; medical clinics,
premium stabilization plans, self insurance and increases in employee co -pays. For fiscal year 2010,
we did not consider altering the City's 50% contribution for dependent care as we are bound by
contractual bargaining agreements with the PBA and PEA.
The following are the specific coverage's the City provides that we are requesting renewal of, along
with their associated carriers:
1. Health Insurance Blue Cross Blue Shield of Florida
2. Dental Insurance Florida Combined Life Insurance Company (a subsidiary of BCBSFL)
3. Vision Insurance Humana Specialty Benefits
4. Long Term Disability Florida Combined Life Insurance Company (a subsidiary of
BCBSFL)
5. Life Insurance Florida Combined Life Insurance Company (a subsidiary of BCBSFL)
The Gehring Group is currently the city's agent of record for employee group insurance. The
Gehring Group receives a 3% commission on the total premiums paid to BlueCross BlueShield of
Florida (BCBSFL).
1
In return, the Gehring Group provides the following services to the City:
Presence during the two (2) day open enrollment period to assist the City in processing all
necessary paperwork for additions and changes to employee coverage's. Additionally,
provides paycheck stuffers and posters notifying City employees of open enrollment which is
scheduled for September 8 and 9, 2009.
Availability to City Council to answer any questions
Assistance in handling any questions or problems with insurance providers throughout the
contract period.
Provides and updates our employee benefit highlights booklets each fiscal year for all
employees.
Meetings throughout the fiscal year with management to review claims experience,
forecasting and planning.
Provides technology and support for our online benefits program which has streamlined our
in -house benefit administration.
Kurt Gehring of the Gehring Group will be available at the Council meeting for a short presentation
and to answer any questions.
RECOMMENDED ACTION
Move to waive competitive bid procedures and authorize a one (1) year renewal of the following
agreements: Group Health Insurance through BlueCross BlueShield of Florida, Dental insurance,
Life Insurance Long -Term Disability through Florida Combined Life Insurance Company (a
subsidiary of BCBSLF) and Vision Insurance through Humana Specialty Benefits.
2
City of Sebastian
HOME OF PEUCAN
Employee Benefits
Insurance Analysis and Recommendation
Effective Date: October 1, 2009
Presented by:
GEHRING„ GROUP
11505 Fairchild Gardens Ave., Ste 202
Palm Beach Gardens, Florida 33410
Telephone: (561) 626-6797
Fax: (561) 626-6970
www.gehrin roup.com
Section 1~,~~,~~,,..,.~.,..,..~..~..... Executive Summary of Recommendations
Section 2 Health Insurance Proposal Analysis
Section 3,,,,,,,,,,,,,~,,,,,,,~~,,,,,~,,,,,,,,,,,,,~, Dental Insurance Proposal Analysis
Section 4,,,~,,~,,,,,..,,,~~,,,,~~, Life Disability Insurance Proposal Analysis
SECTION 1
Health Insurance Evaluation
Due to the concern regarding the rising healthcare inflation rate in the State of Florida, as
well as the budget reductions facing municipal governments, the City of Sebastian's agent
of record, the Gehring Group, initiated renewal discussions with the City's current health
insurance carrier, BlueCross BlueShield of Florida in order to maintain the current benefit
structure while reducing the overall renewal impact on a fiscal basis.
The City has been able to maintain the same plan design over the past few years and has
been able to maintain a competitive health insurance plan throughout the County. Initially
BlueCross BlueShield of Florida provided an overall renewal increase to the City at an 8.5%
increase in current premiums. After subsequent negotiations the Gehring Group was able
to negotiate the renewal to a no increase. This negotiation resulted in a savings of
approximately $105,777.
In addition to renewing the current plan with no benefit changes, the Gehring Group, at the
request of City staff, also requested that BlueCross BlueShield provide alternative quotes
with reduced quotes. Pricing was provided for a combination of health plans based upon
the current plan.
The savings associated with offering an alternative plan were not substantial enough for
the City to be able to offer a viable health plan by requiring the City to reduce the current
level of benefits on the PPO plan.
Upon review of the negotiated premiums and benefits associated with the proposed
alternatives, the Gehring Group along with City staff have determined that the most viable
option for the City at this time is to renew its health insurance coverage with BlueCross
BlueShield of Florida with no changes in the schedule of benefits and no increase in
premium. There is no additional fiscal impact from the current fiscal year effective October
1, 2009 through September 30, 2010.
Dental Insurance Evaluation
The current dental program is an employer- sponsored program offered through Florida
Combined Life Insurance Company (a subsidiary of BlueCross BlueShield of Florida) and
consists of a single option PPO dental plan.
Upon review of the plan claims paid for the current year, Florida Combined Life offered a
rate pass for the upcoming plan year. Upon review of the renewal evaluation with City staff,
it is recommended that the City renew its dental insurance program with Florida Combined
Life and maintain the current dental plan for the upcoming 2009/2010 plan year.
e. Insurance Evaluation
The City of Sebastian currently offers all employees $10,000 of basic life and accidental
death and dismemberment insurance. Employees are able to purchase an additional
benefit up to $500,000.
This benefit is currently being provided by Florida Combined Life (a subsidiary of
BlueCross BlueShield of Florida). Upon review of the plan claims paid for the current year,
Florida Combined Life offered a rate pass for the upcoming plan year. It is recommended
that the City renew its life insurance program with Florida Combined Life and maintain the
current basic life and accidental death and dismemberment insurance for the upcoming
2009/2010 plan year.
Long Term Disability insurance Evaluation
In addition to the dental and life insurance being offered by Florida Combined Life, they
also provide the long term disability insurance for the City's employees.
In 2007 rates for the long term disability plan were guaranteed through September 30,
2009. As a result of the long term disability rate guarantee claims are exceeding premium
paid by 100% with two employees currently receiving disability claims. As a result of this
loss ratio Florida Combined Life has proposed a 10.2% increase in premium, which
represents $3,037 annually. Considering that the long term disability benefits are
associated with dental and life insurance offerings, it is the recommendation of the Gehring
Group that the City renew its long term disability insurance October 1, 2009 with Florida
Combined Life at the requested $3,037 annual increase.
Vision Insurance Evaluation
The City of Sebastian currently offers employees and their dependents vision insurance
through Humana VisionCare. The current rates for the vision plan will remain unchanged
for an additional two year period until September 30, 2011. The Gehring Group was able to
negotiate with Humana VisionCare to extend the rates at no increase. The Gehring Group
recommends that the City continue its vision insurance with Humana VisionCare effective
October 1, 2009.
SECTION 2
Health Insurance Proposal Analysis
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BLUE CROSS BLUE SHIELD OF FLORIDA, INC.
HEALTH OPTIONS, INC
SALES ALTERNATE BENEFIT PLAN
Group Number: 94085
Group Name: CITY OF SEBASTIAN
AOR Fee: 4.0%
Alternate Plan:
11749 $15/$30/$50
21767 $15/$30/$50
31750 $15/$30/$50
41758 $15/$30/$50
51754 $15/$30/$50
6
7
8
Prepared by: Sales
Date: 8/4/2009
Eff Date: 10/1/2009
FINAL REQUESTED RATES:
1749 1767 1750 1758 1754
Single $527.91 $531.38 $524.45 $517.63 $514.37
Emp /Sp $1,092.75 $1,099.95 $1,085.61 $1,071.50 $1,064.73
Emp /Ch $992.44 $998.99 $985.96 $973.15 $967.00
Family $1,676.10 $1,687.12 $1,665.12 $1,643.49 $1,633.10
COMMENTS: Rates based "rate pass" renewal action and assume Single Option offering.
All rates are subject to Office of Insurance Regulation approval. For any changes in rates
policyholders will not be billed the proposed rates until those rates are approved by the Office
of Insurance Regulation. Policyholders will continue to be billed the current rates.
SECTION 3
Dental Insurance Proposal Analys
City of Sebastian
Dental Insurance RFP Evaluation
Effective Date: October 1, 2009
CURRENT
GET HRIN G
RENEWAL
SCHEDULE OF BENEFITS
Plan Basics
Calendar Year Maximum
Deductibles
Single
Family
Deductible Waived for
Preventative Svcs
Bey
Preventative
Basic
Major
Orthodontia
Service Information
Out of Network Benefits
Payable Level
Waiting Period for
Major Services
Endodontics /Periodontics
Payable Level
Rate Guarantee
Employee
Employee Spouse
Employee Child(ren)
Family
73
25
15
18
Monthly Premium
Annual Premium
Increase
Increase
BlueCross BlueShield (FCL)
BlueDental ChoicePlus
In Network Non Network
$50
$150
Yes
$1,000
$50
$150
Yes
100%
80%
50%
50%
100%
80%
50%
50%
90% UCR
None
Major
Expires 9/30/2007
$28.50
$57.18
$71.50
$99.36
$6,370.98
$76,451.76
N/A
N/A
BlueCross BlueShield (FCL)
BlueDental ChoicePlus
In Network Non Network
$50
$150
Yes
100%
80%
50%
50%
$50
$150
Yes
100%
80%
50%
50%
90% UCR
None
Major
24 months
$28.50
$57.18
$71.50
$99.36
$6,370.98
$76,451.76
$0.00
0.0%
GROUP
G: \Gehring Group \clients \Sebastian, City of\Employee Benefits\2009 Files \080509 Sebastian Medical Dental Renewal Evaluation 2009 -2010
SECTION 4
Life Disability Insurance Proposal Analysis
LIFE AND AD &D
CURRENT
RENEWAL
BlueCross BlueShield FCL
$0.33
$0.04
BlueCross BlueShield FCL
$0.33
$0.04
Basic Life Rate $1,000
AD &D Rate $1,000
Total Life and AD &D Rate
$0.37
$0.37
Estimated Volume
$1,414,000.00
$1,414,000.00
Total Monthly Premium
$523.18
$523.18
Total Annual Premium
$6,278.16
$6,278.16
Increase
N/A
$0.00
Increase
N/A
0.00%
LONG -TERM DISABILITY
BlueCross BlueShield /FCL
BlueCross BlueShield /FCL
Long Term Disability Rate $100
$0.49
$0.54
Estimated Volume
$506,173.69
$506,173.69
Total Monthly Premium
$2,480.25
$2,733.34
Total Annual Premium
$29,763.01
$32,800.06
Increase
$0.00
$3,037.04
Increase
0.00%
10.20%
TOTAL LIFE AND LTD PREMIUM
$36,041.17
$39,078.22
INCREASE
N/A
$3,037.04
INCREASE
N/A
8:43%
City of Sebastian
Life and Long Term Disability Renewal
Effective: October 1, 2009
*Rates contingent upon renewal of health dental insurance
G li G GROUP
G:\Gehring Group \clients \Sebastian, City of Employee Benefits\2009 Files\080509 Sebastian Life and Disability Renewal 2009- 2010.xlsx