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R2011-107 -2011-08-29RESOLUTION NO. R2011-107 A RESOLUTION OF THE CITY COUNCIL FO THE CITY OF PEARLAND, APPROVING EMPLOYEE INSURANCE BENEFITS FOR STOP LOSS, DENTAL AND ADMINISTRATION SERVICES. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That the City of Pearland has received proposals for employee benefit rates, attached hereto as Exhibit "A", for employee insurance benefits and such rates have been evaluated. Section 2. That the City Council hereby awards the Employee Stop Loss, Dental and Administration Services to Aetna in the amount described in exhibit "A", attached hereto and incorporated for all purposes. PASSED, APPROVED and ADOPTED this the 19th day of September, A.D., 2011. ATTEST: G L IS SEC TARY APPROVED AS TO FORM: �a DARRIN M. COKER CITY ATTORNEY TOM REID MAYOR • CITY OF PEARLAND PARTIAL SELF FUNDED-BEST AND FINAL OFFERS TPk Current Renewala '- Renegotiated Option 2 - O_ption 3 TPA- - - Aetna t, Aetn etna Aetna ' - Aetna TOP LOSS CARRIER,: Symetra _Everest Re 'PO: _ CPOS II t CPOS II CPOS II CPOS II CPOS II 'BM Aetna Aetna Aetna Aetna Aetna SPECIFIC STOP LOSS: 100,000 100,000 100,000 100,000 100,000 SPECIFIC CONTRACT: 12/12(M,Re) 24/12(M,Rx) 24/12(M,Rx) 12/12(M,Rx)w/rLO 12/12(M,Re)w/TLO SPECIFC MAXIMUM: Unlimited Unlimited Unlimited Unlimited Unlimited AGGREGATE CONTRACT: 12/12(M,Re) 24/12(M.Rx) 24/12(M,Re) 12/12(M,Rx) 12/12(M,Re) AGGREGATE MAXIMUM: 1,000,000 1,000,000 1,000,000 1,000,000 Unlimited COMBINED SPECIFIC AND AGG PREMIUM: Employee $75.63 $113.96 597.79 $70.22 $72.00 Dependents $0.00 $0.00 $0.00 $154.99 $170.18 MONTHLY TOTAL $38,269 $57,664 $49,482 $58,589 $63,137 ANNUAL TOTAL $459,225 $691,965 $593,781 $703,065 $757,644 AGGREGATE STOP LOSS FACTOR: Employee $569.80 $757.98 $715.00 $410.58 $442.71 Additional for Family $0.00 $0.00 $0.00 $1,080.31 $1,100.14 Monthly Aggregate Accumulation $288,319 $383,538 $361,700 $389,920 $402,832 Annual Aggregate Accumulation $3,459,826 $4,602,455 $4,341,480 $4,679,040 $4,833,987 Expected Claims I 82,767,860j $3,681,9641 $3,473,1841 $3,743,2321 $3,867,189 . I I I I I Medical/Rx Administration $38.04 $39.18 $39.18 $39.18 $39.18 Network Access Fee included Included included included included Util¢ation Review/Case Management Included included included included included Disease Management included included included included included Fiduciary Responsibility included Included included included included COBRA included Included included Included included HIPAA included Included included Included included MONTHLY TOTAL $19,248 $19,825 $19,825 $19,825 $19,825 ANNUAL TOTAL $230,979 $237,901, $237,901 $237,901 $237,901 FIXED MONTHLY TOTAL $57,517 $77,489 $69,307 $78,414 $82,962 FIXED ANNUAL TOTAL S690,204 $929,866 S831,682 $940.966 $995,544 MAXIMUM MONTHLY FUNDING SUBTOTAL $345,836 $461,027 $431,097 $468,334 $485,794 MAXIMUM ANNUAL FUNDING SUBTOTAL $4,150,030 $5,532,321 $5,173,162 $5,620,007 $5,829,531 ESTIMATED END OF YEAR INCURRED BUT NOT REPORTED CLAIMS(IBNR) I $400,0001 Included] included] $400,0001 $400,000 FUNDING AT MAXIMUM WITH ESTIMATED INBR $4,550,030 $5,532,321 $5,173,162 $6,020,007 $6,229,531 %Change from Current Maximum 1 nla 21.59% 13,70% 32.31% 36.91% %Change from Current Expected 1 nla $982,291 $623,132 $1,469,977 $1,679,501 FUNDING AT EXPECTED WITH ESTIMATED IBNR $3,858,065 $4,611,830 $4,304,868 $4,684,198 $4,862,734 %Change from Current Expected 1 1 n/a 1 19,54%1 11,58%1 21.41%1 26.04% $Change from Current Expected 1 I n/a I $753,7651 $446,801 1 $826,1341 $1,004,669 10-11 Budget 11-12 Budget $4,566,279 $4,566,279 TOTAL CALCULATIONS BASED ON: 506 - EE 234 Family 272 • CITY OF PEARLAND,TEXAS FULLY INSURED DENTAL RFP BEST AND FINAL OFFERS BENEFITS _) Sun Life-2011 SOLD Aetna Freedom of Choice _ _ Delta Dental Amanitas Ameritas I�" OHMO Calendar Year Deductible $5 Office Visit copay $5 Office Visit Copay Individual None $50 None $50 None $50 $50 $50 t Family L--_i None $150 None $150 None $150 $150 $150 Type I-Preventive Services See Schedule 100% 100% 100% Sea Schedule 100% See Schedule 100% Walling Period I None None None None None None None Oral examinations (2 per year) (2 per year) (2 per year) (2 per year) Bnevdng X-rays (1 per year) (1 per year) (l per year age 18*) (l per year) (1 per year) Full Maui)X-Rays (1 per 3 years) (1 per 3 years) (1 per 5 years) (1 per 5 years) Cleanings (2 per year) (2 per year) (2 per year) (2 per year) Topical fluoride treatment (1 per year) (1 per year,under age IS) (1 per Year,under age 16) (under age 19) (1 per year,to age 15) (1 per year,to age no) Sealants (1 app per 3 yearn to permanent permanent molars,under age (1 per tooth per lifetime) molars,under age 16) 16) (under age 15) (under age 15) Emergency treatment • Basic Basic Type II-Basle Services See Schedule Ded./80% 100% Dedfgo% See Schedule Dedd60% See Schedule Ded./80% Waiting Period Nona None None None None None None Filings Space Maintainers(Age 16) (2 times per year) Preventive Preventive Preventive Preventive Restorative Treatment • General Anesthesia Periodontics 1 1 Erdodonccs. Oral Surgery tl • Palliative Treatment(Relief of Pain) _,rL.__ Type Ill-Major Services ` 1 1 See Schedule Dedi50% 60% Dedf50% See Schedule Dedf50% See Schedule Ded./50% Waiting Period None None None None None None None Crovais (Nays and onlays ii • Removable/fixed(ridge-work '! Parch(or complete dentures I i. Denturereknedrebases �_-1e"_ Dental Annual Maximum _ ,_, R„(. U��®" ®" U&C Reimbrusement Level 1• _�� , 0� 'r5 Orthodontia Services '' `I E1,650 Copay/Chtid Only 50%Child only $2,400 Coney/Adult&Child 50%/Child only •1,700 Copay/Child On 50%/Child Only 50%/Child Only 50%/Child Only Waiting Period None 24 months None None None None . None None • Maximum Benefit _ �. NIA $1,500 $2,400 Ce-a $1,500 None E1,500 $1,000 $1,500 EINANCIIALS" __.a. bt1OPPO• ` " Sun Life-2011 SOLD — Aetna-Freedom of Cholee - 'tt --` Delta Dental - . Amcritas "' EmpOnly x 42 ,204 EmP 4.Spoime _ 1 20 J 65-. � � �� Emp•Chsd(ren) 12-p"53 17E1M111MIM � Emp*Femoy ,,31,Jy105 1113EZEIIEE:E/ "®®'' Monthly Total 1 105!427! ®" Annual Total "_L__ $28,713.00 Combined Monthly Total., ` _ •" 11130111 Combined A nual Total 1_ __ MIIIIIEFEMEIMMIIIIMIPEOZI Perce tage 1 from Current a<, Y,_ t;'S•-6tifi s '` 8°� "', Dollar Change from Renewal fl 51343772 E2135304 Rate Guarantee a _ ,fr;1. "3:$ec' ,'uy::<#m,.. ..;:�.D, .1. ar.; .,a�LW,.. ul Year . ....,1„ ,•;Sic' ".1 ear.iywir °'A 9'. Note:This is a brief summary and not Intended to bee contract Offered One Month Premium Credit=$23,194.52 9.9%cap on year 2 Maximum Covered Expense Net Increase to City Year 1=$4,760 ' novnoP7, VENDOR SELECTION MATRIX STOP LOSS INSURANCE Aetna Svmetra Everest Humana Cost(25%) 25 20 18 13 Financial Stability(20%) 20 20 20 20 Communication(5%) 5 5 5 5 Claims Processing(25%) 25 25 25 25 Claims Management Reports(10%) 10 10 10 10 Integrated Systems/Technology Initiative(10%) 10 9 9 9 References(5%) 5 4 4 5 TOTAL 100 93 91 94 CODE KEY: 60 Below Average 70 Average 80 Average/No Basis for Comparison 90 Above Average 100 Clearly Demonstrable Advantage 5 ispA VENDOR SELECTION MATRIX FULLY INSURED DENTAL Sun Life Aetna Dental Ameritas Cost(25%) 25 24 23 21 Financial Stability(20%) 20 20 20 20 Communication(5%) 4 5 4 5 Claims Processing(25%) 25 25 24 25 Claims Management Reports(10%) 9 9 8 8 Integrated Systems/Technology Initiative(10%) 7 10 9 9 References(5%) 4 5 4 5 TOTAL 94 98 93 93 CODE KEY: 60 Below Average 70 Average 80 Average/No Basis for Comparison 90 Above Average 100 Clearly Demonstrable Advantage . • 6 i i ; R%UC. CITY OF PEARLAND RECOMMENDATIONS MEDICAL ' It is recommended for the City to renew administration services and stop loss insurance with Aetna for the 2011 — 2012 plan years. The stop loss contract will be moving from a 12 month incurred / 12 month paid contract to a 24 month incurred / 12 month paid contract, meaning the new contractwill cover claims incurred from 10/1/10 to 9/30/12 and paid from 10/1/11 to 9/30/12. This contract is considered a mature contract because it will provide insurance for incurred but not reported claims. The negotiated maximum annual liability and expected liability shown in the renewal exhibit are below IPS projections provided at our Pre-Renewal Analysis. However, it is recommended for the City to keep the budget for the health plan static for the 2011 —2012 plan year. Any fund balance from the 2010-2011 plan year would assist in offsetting liability between the the budgeted amount and the City's maximum annual liability. DENTAL It is recommended for the City to move from Sun Life to Aetna for the 2011 — 2012 plan year due to service and administrative issues experienced year to date. Although the Aetna annual cost is 11.2% above the current Sun Life rates, Aetna will provide the City a one month premium credit which drops the annual increase from 11.2% to 1.9%.