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PR 19903: GROUP MEDICAL INSURANCE BLUE CROSS AND BLUE SHIELD OF TEXAS, INC.
City of i urt rtltur � '�� l� xs INTEROFFICE MEMORANDUM Human Resources Department Date: September 14, 2017 To: Brian McDougal, City Manager From: Monique LeFlore, Human Resource Director Lisa Colten, Assistant Human Resource Director Elizabeth Diaz, Compensation& Benefits Manager RE: BC/BS Renewal Effective 11/1/2017 P. R. No. 19903 - A Resolution Authorizing The City Manager To Execute Contracts Between Its Third Party Administrator(Administrative Services Only) For The City of Port Arthur Group Medical, Dental Insurance; For Basic Life, For Basic Accidental Death And-Dismemberment,-And Excess-Loss Indemnity With Blue Cross and Blue Shield of Texas,Inc. Nature of the request: The City of Port Arthur considers its employees to be its most valuable asset and resource. In keeping with this premise, major medical health insurance and dental insurance, basic life insurance, and basic accidental death and dismemberment insurance are provided for its employees and City Council appointees. Additionally, the City also provides access to its major medical health insurance coverage, including prescription drug coverage, for its retirees under age 65. Medicare retirees as well as their Medicare dependent(s) transitioned to the Blue Cross Medicare Advantage PPO and Prescription Drug Plan last year(11/1/2016). Staff Analysis, Considerations: The City of Port Arthur has a Preferred Provider Organization (PPO) insurance format which provides participants great latitude in selection of health care providers. This format has been deemed most beneficial for plan participants and most compatible with our organizational culture. The City also offers a lower cost Health Savings Account (HSA) option. The City is self-insured for major medical health insurance coverage. Brian McDougal, City Manager Page 2 of 2 P.R. #19903 As we reviewed the upcoming renewal with Blue Cross and Blue Shield of Texas along with the adoption of a Blue Cross Medicare Advantage PPO and Prescription Drug Plan for our Medicare retirees and their Medicare dependent(s) affecting approximately 175 plan participants, staff feels it is in the overall best interest of the City to accept this renewal which has resulted in a substantial savings of over one million dollars ($1,000,000), as a result of last year's move to the Medicare Advantage plan. Each renewal year comes with additional elements of the Affordable Care Act impacting the City's health insurance that must be taken into account. In the upcoming renewal year there are no changes to the current level of benefits (i.e. no change in annual deductible, no change in maximum out-of-pocket deductible, no change in co-pays, etc.). The City of Port Arthur has enjoyed surprising price stability with Blue Cross and Blue Shield of Texas, Inc. with average rate increases of 2.3% where industry averages are significantly greater at 7%-11%. Further, the Blue Cross and Blue Shield network discounts and national availability provide not only significant plan cost savings, but also access for employees, City Council appointees, retirees under the age of 65, and dependents across the nation. This current year's renewal reflects no increase in recommended premium funding. Also included as Attachment "A" is an analysis of this year's renewal proposal as presented by the City's insurance consultant, Mr. Mickey Moshier. Dental, AD&D, and Life insurance rates remained constant with no increase. Additional efforts with regard to wellness and education regarding plan usage and alternatives will be a significant initiative in the upcoming renewal year. The 2017-2018 Open Enrollment period will be from October 1 to October 31, 2017. Recommendation: It is recommended that the City Council adopt P. R. No. 19903 which authorizes the City Manager to execute contracts between its third party administrator (administrative services only) for the City of Port Arthur group medical, dental insurance; for basic life, for basic accidental death and dismemberment, and excess loss indemnity with Blue Cross and Blue Shield of Texas, Inc., and Dearborn National Life Insurance Company for its 11/1/2017- 10/31/2018 plan year. Budget Considerations: Approval of P. R.No. 19903 which authorizes the City Manager to execute contracts with the following budgetary impact for which funds are available: Fund No. 614-1701-583.54.00 (Health Insurance Fund) Expected claims $6,744,271 Administration/Stop Loss $1,434,409 Dental $322,247 Basic Life/AD&D $ 30,000 Total $8,530,927 "Remember we are here to serve the Citizens of Port Arthur" P.R. No. 19903 9/14/2017 ml/lc/ed RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE CONTRACTS BETWEEN ITS THIRD PARTY ADMINISTRATOR (ADMINISTRATIVE SERVICES ONLY) FOR THE CITY OF PORT ARTHUR GROUP MEDICAL, DENTAL INSURANCE; FOR BASIC LIFE; FOR BASIC ACCIDENTAL DEATH AND DISMEMBERMENT; AND EXCESS LOSS INDEMNITY WITH BLUE CROSS AND BLUE SHIELD OF TEXAS, INC. FUND NO. (S): 614-1701-583.54-00 (HEALTH INSURANCE FUND) WHEREAS, the City Council of the City of Port Arthur deems it necessary and appropriate to provide major medical health care benefits for the City's employees, City Council appointees, and its retirees under the age of 65 effective on 11/01/2017; and, WHEREAS, the City Council deems it in the best interest of the citizens of Port Arthur to be self-funded and to accept the renewal from Blue Cross and Blue Shield of Texas, Inc. as a third party administrator at an estimated cost of $193,387 per year (administrative charge based on the present number of employees) as well as at a cost of $1,241,022 per year for stop loss premium (excess indemnity) per the recommendation of the City's insurance consultant, Mickey Moshier, listed hereto as Attachment "A"; and, WHEREAS, the City's group health plan coverage encompasses the enactment of the Patient Protection and Affordable Care Act (PPACA) effectuated on March 23, 2010, with continuing provisions enacted annually, and do hereby affirm to continue to make changes to its existing health plan policies or products as required to comply with the law; and, P.R. No. 19903 9/14/2017 ml/lc/ed Page 2 of 5 WHEREAS, such contracting with Blue Cross and Blue Shield of Texas, Inc. complies with Sections 252.021(b), Competitive Requirements for Certain Purchases, 252.024, Section of Insurance Broker, and 252.048, Change Orders, respectively, of the Local Government Code; and, WHEREAS, the nature of the premiums to be charged by the City and the summary of benefits are as delineated in Exhibit "A", which reflect the costs for administration by Blue Cross and Blue Shield of Texas, Inc., the stop loss premium and the expected reserve; and, WHEREAS, the Basic Life Insurance will also be continued per Dearborn National Life which includes provisions to provide basic life insurance coverage to Fire Civil Service personnel at a rate of one times his/her base annual salary in accordance with the 10/01/2011 Collective Bargaining Agreement between the City of Port Arthur, Texas and Local 397 International Association of Fire Fighters, which will cost the City $.22/per thousand dollar unit, and all other eligible employees' coverage will remain a $6,000 death benefit policy, which will cost the City $.19/per thousand dollar unit/per employee/per month and attached as Exhibit "B"; and, WHEREAS, as part of the Dearborn National Life proposal, the City is also obtaining Accidental Death and Dismemberment insurance on behalf of its employees which will remain at a cost of $.04/per thousand dollar unit/per P.R. No. 19903 9/14/2017 ml/lc/ed Page 3 of 5 Employee (for a $5,000 accidental death and dismemberment policy for all eligible Employees) per month as attached as Exhibit "B"; and, WHEREAS, the current year's renewal provides for no increase in premium to the City or to employees, City Council appointees, or to retirees under the age of 65. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: Section 1. That, the City Council of the City of Port Arthur hereby accept the following contracts to Blue Cross and Blue Shield of Texas, Inc., attached hereto and made a part hereof, as is fully delineated herein: INSURANCE COVERAGE ADMINISTRATIVE SERVICES EFFECTIVE DATE Administrative Services Blue Cross and Blue Shield November 1, 2017 City of Port Arthur's Group Medical and Stop Loss Dental Blue Cross and Blue Shield November 1, 2017 Basic Life & AD&D Dearborn National Life November 1, 2017 Section 2. That, the City Manager is hereby further authorized to execute the necessary contracts and other documents on behalf of the City of Port Arthur subject to the approval of the City Attorney, and to make payment of necessary premium and administrative charges to bind coverage subject to the terms and conditions of the contract for Third Party Administrator (Administrative P.R. No. 19903 9/14/2017 ml/lc/ed Page 4 of 5 Services Only) and the Contracts for Insurance attached hereto as required to effectuate said services; and, Section 3. That, The City Manager is hereby directed to take all actions necessary to ensure proper funding of the City of Port Arthur's Employee Health Insurance Fund; and, Section 4. That, a copy of the caption of this Resolution be spread upon the minutes of the City Council. READ, ADOPTED, AND APPROVED this day of , AD, 2017, at a Regular Meeting of the City Council of the City of Port Arthur, by the following vote: AYES: Mayor , Councilmembers: NOES: P.R. No. 19903 9/14/2017 ml/lc/ed Page 5 of 5 Derrick Ford Freeman, Mayor ATTEST: Sherri Bellard, City Secretary APPROVED AS TO FORM: Valecia Tizeno, Attorney APPROVED FOR ADMINISTRATION: Monique LeFlore, Human Resource Director Brian McDougal, City Manager APPROVED AS TO AVAILABILITY OF FUNDS: Director of Finance ATTACH M ENT "A" J.S. Edwards Sherlock INSURANCE AGENCY City of Port Arthur Employee Benefits Renewal November 2017 The November 2017 renewal offer from Blue Cross Blue Shield of Texas (BCBS) reflects the 5th year in their 5 year proposal response that began in November 2013. Fee guarantees were included and remain part of the November 2017 renewal offers. The original November 2017 health plan renewal offer reflected a 7.3% increase in suggested funding and thus in overall cost. After careful and thorough negotiations, BCBS reviewed and reduced their numbers and the revised figures now reflect a NO CHANGE to funding levels for the upcoming year. The only change in the contract other than Affordable Care Act requirements is moving the aggregate stop loss level from the current 125% level to 130%. In doing so, BCBS reduced their expected paid claims level in their 130% offer such that the potential 5% liability increase is less than in the original 125% plan. Obviously, the City's business is important to BCBS and the revisions BCBS is offering reflect their loyalty to the City. 4155 Phelan Boulevard • Beaumont,D( 77707 • P.O.Box 22237, 77720-2237 Beaumont(409)832-7736 • Fax(409)833-1721 • Houston(713)224-8723 The City's move to a Medicare Advantage plan for retirees age 65+ was instrumental in reducing costs at the November 2016 renewal and remains a significant part of being able to maintain current costs for the November 2017 contract. While there has been some concern expressed about the Medicare Advantage provider network, the plan chosen by the City has as good or better network access than others available. And members can utilize out-of-network benefits if they choose to do so. A commitment has been obtained from BCBS to contact non-member providers and attempt to contract them in the Medicare Advantage plan being offered. BCBS is also the carrier providing dental benefits for active employees. For the 3rd time in 3 years, they have offered a NO CHANGE to their fully insured contract rates. Dearborn National provides the City's life insurance benefits and they have extended their current rates at NO CHANGE for the next year as well. I am available for review and additional discussion on this brief analysis as needed. My recommendation is that the renewal offers are more than fair and should be accepted as proposed/presented. Respectfully submitted, Mickey Moshier, MHP J.S. Edwards and Sherlock Insurance Agency EXHIBIT "A" PPO ASO Standard with Network ' i BlueC BlueShield rrt� - Deductible and Split Copay as , of Texas BENEFIT HIGHLIGHTS Prepared For City of Port Arthur BlueChoice Network Effective Date : 11 /01 /2017 Overall Payment Provisions In-Network Out-of-Network Benefits Benefits Deductibles Per-admission Deductible None $200 Calendar Year Deductible $1,500 Individual/ $2,000 Individual/ Applies to all Eligible Expenses except Inpatient Hospital Expenses(unless $3,500 Family $6,000 Family otherwise indicated) Three-month Deductible carryover applies Yes Yes Out-of-Pocket Maximum $5,000 Individual/ $6,500 Individual/ $10,200 Family $15,000 Family Deductible applies to Out-of-Pocket Yes—no option Yes** Copayment applies to Out-of-Pocket Yes—no option Yes** Network Deductible&Out-of- Out-of-Network Deductible&Out-of **Copayment amounts and per admission deductibles are applied but will continue to Pocket will only apply toward Network Out-of-Pocket will only be required after the benefit percentage increases to 100%. Network Deductible&Out-of- apply toward Out-of-Network Pocket Maximum Deductible&Out-of-Network Out-of- Pocket ut-ofPocket Maximum Copayment Amounts Required Physician office visit/consultation: Primary Care Copayment Amount for office visit/consultation when $35 Primary Care Copayment services rendered by a Family Practitioner,OB/GYN,Pediatrician,Behavioral Health Practitioner,or Internist and Physician Assistant or Advanced Practice Nurse who works under the supervision of one of these listed physicians Specialty Care Copayment Amount for office visit/consultation when services $50 Specialty Care Copayment rendered by a Specialty Care Provider Refer to Medical/Surgical Expenses section for more information Urgent Care center visit $75 Copayment Amount Refer to Urgent Care Services section for more information Outpatient Hospital Emergency Room/Treatment Room visit $150 Copayment Amount $150 Copayment Amount Refer to Emergency Room/Treatment Room section for more information Maximum Lifetime Benefits Per Partici.ant Unlimited Inpatient Hospital Expenses Inpatient Hospital Expenses All services must be preauthorized All usual Hospital services and supplies,including semiprivate room,intensive 80%of Allowable Amount 60%of Allowable Amount after per- care,and coronary care units admission Deductible Penalty for failure to preauthorize services None $250 A Division of Health Care Service Corporation,a Mutual Legal Reserve Company.an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+Business PPO ASO Standard with Network Ded,Split Copay Rev 7/2017 for effective dates 01/01/18&after(8/2017 Release) Page 1 of 5 .I PPO ASO Standard with Network ttlueCro BlueShield Deductible and Split Copay of Medical/Surgical Expenses In-Network Out-of-Network Benefits Benefits Medical/Surgical Expenses Services performed during the office visit/consultation when rendered by a Primary 100%of Allowable Amount after 70%of Allowable Amount after Care Provider,including lab and x-ray(does not include Certain Diagnostic Procedures $35 Primary Care Copayment** Deductible and surgical services) Services performed during the office visit/consultation when services rendered by a• 100%of Allowable Amount after 70%of Allowable Amount after Specialty Care Provider,including lab&x-ray(does not include Certain Diagnostic $50 Specialty Care Copayment Deductible Procedures and surgical services) Lab&x-ray in other outpatient facilities(excluding Certain Diagnostic Procedures) 100%of Allowable Amount 70%of Allowable Amount after Deductible -Physician surgical services performed in any setting 80%of Allowable Amount after 60%of Allowable Amount after Deductible Deductible -Physician inpatient hospital visits 80;i2 of Allowable Amount after 60%of Allowable Amount after Deductible Deductible -Certain Diagnostic Procedures;such as Bone Scan,Cardiac Stress Test,CT-Scan 80%of Allowable Amount after 60%of Allowable Amount after (with or without contrast),MRI,Myelogram,PET Scan. Deductible Deductible -Home Infusion Therapy(Services must be preauthorized) 80%of Allowable Amount after 60%of Allowable Amount after Deductible Deductible -All other outpatient services and supplies 80%of Allowable Amount after 60%of Allowable Amount after Deductible Deductible Virtual Visit MDLIVE(Standard) NOT COVERED N/A N/A -Telemedicine Vendor(Specific procedures and providers) Not Covered Does not apply In Vitro Fertilization Services Not Covered Extended Care Expenses Extended Care Expenses All services must be preauthorized 100%of Allowable Amount 70%of Allowable Amount after Deductible Skilled Nursing Facility Limited to 25 day maximum each Year* Home Health Care Limited to 60 visit maximum each Year* Hos•ice Care Unlimited Special Provisions Expenses Mental Health(Serious Mental Illness(SMI)included)and Chemical Dependency(Substance Use Disorder) Inpatient Services Inpatient Chemical Dependency treatment must be provided in a Chemical Dependency/Residential Treatment Center(RTC) -Hospital services(facility) 80%of Allowable Amount 60%of Allowable Amount after per-admission Deductible None Penalty for failure to preauthorize services $250 Preauthorization required for inpatient,residential treatment centers(RTC),partial hospital program admissions,and certain outpatient professional services -Physician services 80%of Allowable Amount after 60%of Allowable Amount after Calendar Year Deductible Deductible Outpatient Services -Services performed during office visit/consultation when rendered by a Primary 100%of Allowable Amount after 70%of Allowable Amount after Care Provider(does not include psychological testing) $35 Primary Care Copayment Deductible Amount -All outpatient services and psychological testing 80%of Allowable Amount after 60%of Allowable Amount after Deductible Deductible *Benefits used In-Network and Out-of-Network will apply toward satisfying any Annual Maximum benefits indicated **Primary Care/Specialty Care copayments are defined in the Overall Payment Provisions section in this document. A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+Business PPO ASO Standard with Network Ded,Split Copay Rev 7/2017 for effective dates 01/01/18&after(8/2017 Release) Page 2 of 5 PPO ASO Standard with Network tiuueCross ttueSisiel 1 Deductible and Split Copay TIP of Texas • Special Provisions Expenses, cont. in-Network Out-of-network Benefits Benefits Emergency Room/Treatment Room Accidental Injury&Emergency Care -Facility charges 80%of Allowable Amount after$150 Copayment Amount (Copayment Amount waived if admitted,Inpatient Hospital Expenses will apply) -Physician charges 80%of Allowable Amount after Deductible Non-Emergency Care -Facility charges 80%of Allowable Amount after$150 60%of Allowable Amount after$150 Copayment Amount(Copayment Copayment Amount&Deductible Amount waived if admitted,Inpatient (Copayment Amount waived if Hospital Expenses will apply) admitted,Inpatient Hospital Expenses will apply) -Physician charges 80%of Allowable Amount after 60%of Allowable Amount after Deductible Deductible Urgent Care Services Urgent Care center visit,including lab&x-ray services(does not include 100%of Allowable Amount after$75 70%of Allowable Amount after Certain Diagnostic Procedures and surgical services) Copayment Amount Deductible Certain Diagnostic Procedures;such as Bone Scan,Cardiac Stress Test, CT-Scan(with or without contrast),MRI,Myelogram,PET Scan,surgical 80%of Allowable Amount after 60%of Allowable Amount after procedures and all other services and supplies. Deductible Deductible Ground and Air Ambulance Services 80%of Allowable Amount after Deductible Preventive Care Routine annual physical examinations,well-baby care exams, 100%of Allowable Amount 70%of Allowable Amount after immunizations 6 years of age&over,and any other preventive health Deductible services as determined by USPSTF Immunizations for Dependent children through the date of the child's 6th 100%of Allowable Amount 100%of Allowable Amount birthday Speech and Hearing Services Services to restore loss of or correct an impaired speech or hearing function Covered same as any other sickness Covered same as any other sickness Hearing Aid Maximum Hearing aids are subject to 1 per ear per 36 month period hysical Medicine Services Chiropractic Care-Office Services 80%of Allowable Amount after 60%of Allowable Amount after Deductible Deductible Maximum Limited to 35 visits each Year* All other Physical Medicine Services rendered by any other eligible Provider will ........................ be allowed on the same basis as any other sickness. *Benefits used In-Network and Out-of-Network will apply toward satisfying any Annual Maximum benefits indicated A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+Business PPO ASO Standard with Network Ded,Split Copay Rev 7/2017 for effective dates 01/01/18&after(8/2017 Release) Page 3 of 5 PPO ASO Standard with Network Bluecross tsl„r r►iekl Deductible and Split Copay 9 ) of Texas Pharmacy Benefits Participating Pharmacy* Non-Participating Pharmacy (member files claim) Drug List** Basic Compound Drugs Not Covered(2015 Standard) Non-sedating antihistamine(NSA)drugs and combination Cover prescription strength NSAs only medications containing a non-sedating antihistamine and decongestant Proton Pump Inhibitors Generics and Brands coverage NOTE:For Performance and Performance Select drug lists,coverage will be based on the drug list.Customization is not allowed. Cover prescribed over-the-counter(OTC)medications Cover only prescribed ACA OTCs NOTE: ACA OTCs(aspirin,vitamin D,folic acid,iron,prenatal and fluoride)are standardly covered for Non-Grandfathered plans due to ACA with no cost share with a prescription from a provider. Cover prescription medications with OTC equivalents(same No strength,same active ingredients) If no,cover Omeprazole 20 mg ® Yes ❑No Prescription Drug Deductible*** None Prescription Drug Out-of-Pocket Maximum Separate Prescription Drug Out-of-Pocket Maximum applies to Retail&Mail Service Pharmacy:Individual: $1,500/Family: $3,000 Vaccinations obtained through Pharmacies**** All ACA vaccines,including flu 80%of Allowable Amount minus (standard) Copayment Amount and deductible Covered at pharmacies participating in Prime's Vaccination Network only: Zero Copayment Deductible does not apply Retail Pharmacy (Copayment amounts are based on a 30-day supply. With appropriate prescription order,up to a 90-day supply is available. Copayment amounts apply to Out-of-Pocket Maximum.) Preferred/Non-Preferred Generic Drug $15 Copayment Amount 80%of Allowable Amount minus Copayment Amount Preferred Brand Name Drug $35 Copayment Amount 80%of Allowable Amount minus Copayment Amount $60 Copayment Amount 80%of Allowable Amount minus Non-Preferred Brand Name Copayment Amount Specialty Copay$150 Not Covered Specialty Drugs are not covered unless obtained through a participating Specialty Pharmacy Provider. Specialty Drugst Specialty Lock-Out through Prime Specialty Pharmacy applies: No coverage available for specialty drugs when purchased through any other provider. Mail Order Program Yes (Copayment amounts are based on a 30-day supply. With appropriate prescription order,up to a 90-day supply is available. Copayment amounts apply to the Out-of-Pocket Maximum.) Generic Drug $15 Copayment Amount Preferred Brand Name Drug $35 Copayment Amount Non-Preferred Brand Name Drug $60 Copayment Amount A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+Business PPO ASO Standard with Network Ded,Split Copay Rev 7/2017 for effective dates 01/01/18&after(8/2017 Release) Page 4 of 5 PPO ASO Standard with Network BtueCros 11oe hiielcl Deductible and Split Copay of Texas MAC 3-Generic Incentive(Standard)-Members who purchase Brand Name Drugs when a Generic equivalent exists, will be required to pay the difference between the cost of the Generic and Brand Name Drug,plus the applicable Copayment Amount. *To locate a preferred/participating pharmacy in your area,go to myprime.com or contact customer service at the phone number on the back of your identification card. **The drug lists are available at:bcbstx.com/member/rx_drugs.html ***Three-month Deductible carryover does not apply to prescription drug deductible. ****Select Participating Pharmacies have been contracted to provide vaccination services. Each pharmacy may have age,scheduling,or other requirements that will apply. Members are encouraged to contact the store in advance. Benefit does not include childhood immunizations,subject to state regulations. IFor more information on the specialty drug program,call Prime Specialty Pharmacy at(877)627-6337. Diabetes Supplies are available under the Prescription Drug benefits of your plan.Diabetic Supplies include insulin and insulin analog preparations,insulin syringes necessary for self-administration,prescriptive and non-prescriptive oral agents,all required test strips and tablets which test for glucose,ketones,and protein,lancets and lancet devices,biohazard disposable containers,glucagon emergency kits,and other injection aids.All provisions of this portion of the plan will apply including Copayment Amounts and any pricing differences that may apply to the items dispensed. Standard UM Programs(prior authorization and step therapy)and exclusions apply,including auto updates and FastPath. Note:To confirm standard benefits,refer to the Pharmacy page on Product Central on FYIBlue. Malana Hearn Group Executive Name and Title Signature Date (Please type or print) Agent of Record Name Signature Date (Please print or type) BCBSTX Representative Name Signature Date (Please print or type) A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+Business PPO ASO Standard with Network Ded,Split Copay Rev 7/2017 for effective dates 01/01/18&after(8/2017 Release) Page 5 of 5 Blue Cross and Blue Shield of Texas Dental Summary of Benefits Prepared for CITY OF PORT ARTHUR—Account#31118 Group #031120 Effective 11/01/2017 TYPE OF SERVICE BENEFIT GENERAL PROVISIONS FOR PREVENTIVE,BASIC AND MAJOR CARE BENEFITS Calendar Year Deductible(4th quarter carryover applies) $50 Individual/$150 Family Deductible Credit from Prior Carrier N/A Calendar Year Maximum per Participant $1,000 PREVENTIVE CARE BENEFITS(deductible waived) 100% • Oral Examinations,X-Rays,Cleanings BASIC CARE BENEFITS 80% • Fillings, Extractions,Endodontics,Oral Surgery,Root Canal Therapy MAJOR CARE BENEFITS 50% • Prosthetics(dentures,bridgework),Crowns,Inlays and Onlays ORTHODONTIC BENEFITS(no deductible) No • Orthodontic Diagnostic Procedures and Treatment Available Only to Participants Under 19 Years of Age N/A Lifetime Maximum per Participant N/A TEMPOROMANDIBULAR JOINT(TMJ)BENEFITS(no deductible) No Lifetime Maximum per Participant N/A • This is a general Summary of your benefit design. Please refer to your benefit booklet for other details and for Iimitations and exclusions. • The following eligibility provisions apply: Dependent children are covered until age 26. Disabled dependent children can be covered beyond age 26. Retirees are not eligible for coverage. Employees may enroll dependent children up to age 5 on the first of the month following application with no late enrollment penalty. • A pre-existing condition exclusion will apply to expenses involving the replacement of teeth that were missing prior to the effective date of the dental contract. This exclusion will not apply to: Any participant who becomes effective on the dental contract date who was covered under a previous group dental care contract by the Employer. Any participant who has been continuously covered for 24 months under a group dental care contract with BCBSTX which included prosthetic benefits. • When the course of treatment will be in excess of$300, a predetermination request should be submitted to BCBSTX in advance of treatment. Please note that our dental is a 'freestanding"product and can be purchased separately from the Health Care Services Corporation product, i.e., an employee can have only himself covered for health, but have dental for the family and vice versa. DENT-FRSTG-Summary of Benefits Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association Group Executive Name and Title Signature Date Agent of Record Name Signature Date BCBSTX Representative Name Signature Date • DENT-FRSTG-Summary of Benefits Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Lera1 Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association E, N cn N co O W O N a N E ` CID U m -r X 1' " Ea C,', m 1smi W 4._ J co N {J p O - U L 0 -Q - g m g Smag CD 00 a ... 0 p Q , CL Q CD 0 m4... 0N a m® Q 0 U 0J W m i = o a ■® m c > c > > m 0 Q Z I • o » \ co a)co / \ q 1.0 ° 03 Ta e \ ^26 5 £ \ E ƒ % a / \ / a % _ \ E \ \ / ƒ - o \ \ { ® f \ j / / / } : of >, > e - 9 c - _ = e o C oa ,_ as ( 7 3 / ) / ) CI » p 1. \ • \ \ C k ^ / ƒ \ N 0 7 g = E e - 2 = o ° ••n 0 U © @ V) / -C 2 E 0 \ ( / % @ a \ o - > _ Ta _ o ° c a) / \ ,d ° 0 \ a) — 5 a. 1 \ \ \ \ o \ / -\ o e 0) m o e > n 0 ( n 9 2 § 2 \ [ f o 8 O k % c/ > co 0 \ / U >i E \ G \ \ \ n @ ! 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A. Aggregate Stop Loss Coverage: ® Yes ❑ No If yes, complete items 1 through 9 below. 1. ❑ New Coverage ® Renewal of Existing Coverage 2. Stop Loss Coverage during the current Policy Period: ❑ New Coverage (Select one from below): ❑ Incurred and paid during the Claims incurred and paid from to Policy Period: ❑ Incurred with Run-Out: Claims incurred from to and Claims paid from to ❑ Run-in coverage: Claims incurred from to and Claims paid from to If coverage is for claims incurred prior to the effective date of the Policy and paid by Policyholder's prior claim administrator, then such claims must be reported by the Policyholder to the Company (Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company) and paid by the Policyholder's prior claim administrator by the end of the current Policy Period. ❑ Renewal of Existing Coverage: ® Claim Administrator's Claims: Claims incurred on or after the original Effective Date of Policy and paid during the Policy Period. ❑ Incurred with Run-Out: Claims incurred from to and Claims paid from to A Division of Health Care Service Corporation,a Mutual Legal Reserve Company an Independent Licensee of the Blue Cross and Blue Shield Association TXStopLossApp-06/17 3. Aggregate Stop Loss Coverage shall apply to: ® Medical Claims ® Outpatient Prescription Drug Claims with Company's Pharmacy Benefit Manager ❑ Outpatient Prescription Drug Claims with Policyholder's Pharmacy Benefit Manager: ❑ Dental Claims ❑ Other(please specify): 4. Average Claim Value: 824.08 (per Employee per Month) Attachment Factor: 130% of the Average Claim Value 5. Aggregate Claim Liability and Run-Off Claim Liability Factors a. Employer's Claim Liability for each Policy Period shall be the sum of the Monthly amounts obtained by multiplying the number of Individual and Family Coverage Units for each Month by the following factors: $594.39 for each Coverage Unit $1751.86 for each Family Coverage Unit Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note:you can use the "return"key to create additional rows, if needed: b. Employer's Run-Off Claim Liability shall be calculated by multiplying the sum average of the total of all Coverage Units during each of the three calendar Months immediately preceding termination by the factors shown below. Settlement for the final accounting period will be described in the section of the Policy entitled SETTLEMENTS. $ for each Coverage Unit $ for each Family Coverage Unit Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note:you can use the "return"key to create additional rows, if needed: Composite$329.36 6. CAP Arrangement ® Yes ❑ No 7. Aggregate Stop Loss Claims a. The amount of Paid Claims during the current Policy Period, less: i. Individual (Specific)Stop Loss Claims ii. Any claims in excess of the Individual (Specific) Stop Loss Claims per Covered Person per Lifetime Maximum iii. Any claims in excess of the Individual (Specific) Stop Loss Claims maximum Point of Attachment that exceeds the Aggregate Point of Attachment. The Aggregate Point of Attachment shall equal the sum of the Employer's Claim Liability amounts calculated Monthly as described in item A.5.a. above for the current Policy Period. b. In the event of termination at the end of a Policy Period, the Final Settlement Aggregate Point of Attachment shall equal the sum of the Employer's Claim Liability amount for the Final Policy Period and the Employer's Run-Off Claim Liability calculated as described in item A.5.b. above. However, for the current Policy Period the minimum Aggregate Point of Attachment shall be $7,890,841. TXStopLossApp-06/17 2 8. Stop Loss Premium (Select one): •• ❑ Annual Premium (Due on the first day of the current Policy Period): $ ® Monthly Premium shall be equal to the amounts obtained by multiplying the number of Individual and Family Coverage Units for a particular Month by: $3.51 for each Employee Coverage Unit $9.82 for each Employee/Family Coverage Unit Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note: you can use the "return"key to create additional rows, if needed: 9. The premium is based upon a current membership of 401 Individual Coverage Units and 281 Family Coverage Units. B. Individual (Specific) Stop Loss Coverage: ❑ Yes ❑ No If yes, complete items 1 through 6 below. 1. ❑ New Coverage ® Renewal of Existing Coverage 2. Stop Loss Coverage Period: ❑ New Coverage (Select one from below): ❑ Incurred and paid during the Claims incurred and paid from to Policy Period: ❑ Incurred with Run-Out: Claims incurred from to and Claims paid from to ❑ Run-in coverage: Claims incurred from to and Claims paid from to If coverage is for claims incurred prior to the effective date of the Policy and paid by Policyholder's prior claim administrator, then such claims must be reported by the Policyholder to the Company (Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company)and paid by the Policyholder's prior claim administrator by the end of the current Policy Period. ® Renewal of Existing Coverage: • Claim Administrator's Claims: Claims incurred on or after the original Effective Date of Policy and paid during the Policy Period. ❑ Incurred with Run-Out: Claims incurred from to and Claims paid from to 3. Individual (Specific) Stop Loss Coverage shall apply to: ® Medical Claims ® Outpatient Prescription Drug Claims with Company's Pharmacy Benefit Manager ❑ Outpatient Prescription Drug Claims with Policyholder's Pharmacy Benefit Manager: ❑ Dental Claims ❑ Vision Claims TXStopLossApp-06/17 3 ❑ Other(please specify): 4. Individual (Specific) Stop Loss Claims a. For n/a who is identified by the health identification (ID) number n/a, the amount of Paid Claims during the current Policy Period in excess of the Individual Point of Attachment of$n/a. Such amount shall apply for the current Policy Period. b. For each other Covered Person: The amount of Paid Claims during the current Policy Period in excess of the Individual Point of Attachment of$130,000 per Covered Person but not to exceed a maximum Point of Attachment of$ per Policy Period. Paid Claims in excess of the maximum point of attachment shall not be eligible to satisfy the Aggregate Point of Attachment. Such amount shall apply for the current Policy Period. c. Covered Person per Lifetime Maximum: The Individual (Specific) Stop Loss Claims shall not exceed n/a per Covered Person per Lifetime. Paid Claims in excess of the Covered Person per Lifetime Maximum shall not be eligible to satisfy the Aggregate Point of Attachment. Point of Attachment ® Includes Claim Administrator's Provider Access Fee ❑ Excludes Claim Administrator's Provider Access Fee 5. Stop Loss Premium (select one): ❑ Annual Premium (Due on the first day of the current Policy Period): $ ® Monthly Premium shall be equal to the amounts obtained by multiplying the number of Individual and Family Coverage Units for a particular Month by: $83.57 for each Coverage Unit $233.95 for each Family Coverage Unit Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note: you can use the "return"key to create additional rows, if needed: 6. The premium is based upon a current membership of 401 Individual Coverage Units and 281 Family Coverage Units. Additional Provisions: COPA increased the ASL to 130% TXStopLossApp-06/17 4 The undersigned person represents that he/she is authorized and responsible for purchasing stop loss coverage on behalf of the Employer. It is understood that the actual terms and conditions of coverage are those contained in Application the Stop Loss Coverage Policy into which this Application shall be incorporated at the time of acceptance by Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company ("HCSC"). Upon acceptance, HCSC shall issue a Stop Loss Coverage Policy to the Employer. Upon acceptance of this Application and issuance of the Stop Loss Coverage Policy, the Employer shall be referred to as the "Policyholder." Sales Representative Signature of Authorized Purchaser Name of Underwriter Title of Authorized Purchaser Signature of Underwriter Date INTERNAL USE ONLY Date Application approved by Underwriting: TXStopLossApp-06/17 5 EXHIBIT "B" Dearborn National July 20, 2017 CITY OF PORT ARTHUR ATTENTION: ELIZABETH VILLARREAL PO BOX 1089 PORT ARTHUR TX 77641-1089 Subject: Renewal Analysis Group Policy Number: G31118 Anniversary Date: November 1,2017 Dear Policyholder: Dearborn National would like to thank you for allowing us the opportunity to provide you and your employees with Group insurance products. We have reviewed the current demographics of your group insurance programs. We are pleased to inform you that there will be no change in the existing rates for the upcoming renewal period. Rates will be guaranteed until November 1,2019. Products Current Rates Renewal Rates Life—Class 1 $0.19 per $1,000 $0.19 per $1,000 Life—Class 2 $0.22 per $1,000 $0.22 per $1,000 AD&D $0.04 per$1,000 $0.04 per$1,000 If you have any questions pertaining to your renewal, or would like more information including the availability of other products as well as a quote for additional benefit programs, please contact your local Dearborn National sales office or insurance broker. We value our relationship with you and look forward to providing quality service to you in the future. Sincerely, Underwriting Department In Force Team 701 East 22nd Street, Lombard, IL 60148 A Fax: 312.540.4706 Products and services marketed under the Dearborn National®brand and the star logo are underwritten and/or provided by Dearborn National®Life Insurance Company (Downers Grove,IL)in all states(excluding New York),the District of Columbia,the United States Virgin Islands,the British Virgin Islands,Guam and Puerto Rico.