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HomeMy WebLinkAboutPR 14867: CONTRACT FOR CITY GROUP INSURANCE (BLUE CROSS BLUE SHIELD OF TEXAS)MEMO To: Mr. Stephen Fitzgibbons, City Manager From: Patricia Davis, Senior Human Resource Analyst ~G2~~ Date: August 4, 2008 Re: Adoption of Proposed Resolution No. 14867 Authorizing the City Manager to Execute the Necessary Renewal Contract Documents for a Third Party Administrator Adminisirrative Services Only (ASO) Contract for the City of Port Arthur Group Medical, Dental Insurance; For Basic Life, Basic Accidental Death and Dismemberment, and Excess Loss Indemnity with Blue Cross and Blue Shield of Texas, Inc. (BC/BS) Recommendation: I recommend that the City Council adopt proposed Resolution No. 14867 which authorizes the City Manager to execute the necessary renewal contract documents for a third party administrator administrative services only contract for the City of Port Arthur Group Medical, Dental Insurrance; for Basic Life, Basic Accidental Death and Dismemberment, and Excess Loss Indemnity with Blue Cross and Blue Shield of Texas, Inc. (BCBS;-. After considered review of the responses from the City's Request for Proposals (RFPs) opened on July 9, 2008, staff is recommending acceptance of the Blue Cross and Blue Shield's bid offer for the 1111/08 -10/31/09 plan year. Background: The City of Port Arthur issued a RFP (Request for Proposal) for its major medical, dental wind life insurance plan on May 16, 2008. Thirteen (13) responses were received which resulted in Blue Cross and Blue Shield of Texas, Inc. (BC/BS) submitting the successful proposal. InGuded in the RFP offer was a three (3) year option to renew. A breakdown of the cost and benefit levels for the plan year beginning 11/1/08 is delineated as follows: - The cost of administrative services only (ASO) coverage will change from $342,525 to $354,120--an increase of 3.4% or $11,595 over last year's rates. Actual administration cost per member decreased approximately 6% per member while overall membership increase created the annual cost increase. - The cost of aggregate and specific: stop loss coverage will remain the sarne per member as last year. However, the additional membership created an annual increase of $41,455 over last year's annual cost. - Dental rates will increase from $248,000 to $270,000, which is a 9% increa~~e over last year's total cost. "Remember, we nre here to serene the citizens of Port Arthur." Stephen Fitzgibbons/Memo August 4, 2008 Page 2 - Life and Accidental Death and Dismemberment (AD8~D) annual cost will decrease from $14,123/yr. to $12,398/yr. - Key plan amendments effective November 1, 2008 are as follows: 1). Services or supplies for obesity or weight when medically necessary, will be covered the same as any other sickness. 2). 7% premium increase (health and dental) for all impacted active employees and/or dependent coverages. 3} Approximately 6.5% premium increase for all impacted retirees and/or dependent coverages (retirees are not eligible for dental coverage). NOTE: All other existing co-pays and deductibles will remain the same. Budaetarv/Fiscal Effect: Approval of proposed Resolution No. 14867 will require funding the following amounts: [Note: Amounts are estimated. Actual costs will depend on plan utilization, number of plan participants, etc.] Funding will be from Fund No. 614 -Health Insurance Fund Major Medical Health Insurance .............................................$6,875,451 Dental Insurance .................................................................$ 270,000 Life Insurance .................................................$10,886 Accidental Death & Dismemberment (AD&D)........$ 1,512 TOTAL RECOMMENDED FUNDING FROM FUND NO. 614 HOSPITAL INSURANCE FUND ........................$7,157,849 Staffing/Emglovee Effect: Adoption of the proposed resolution would have no impact on staffing levels. Summary: We recommend that the City Council approve proposed Resolution No. 14867, which authorizes the City Manager to Execute Necessary Renewal Contract Documents for a Third Party Administrator Administrative Services Only Contract for the City of Port Arthur Group Mledical, Dental Insurance for Basic Life and Basic Accidental Death and Dismemberment, and Excess Life Indemnity with Blue Cross and Blue Shield of Texas, Inc. (BC/BS). "Remember, we nre here to serMe the citizens of Port Arthur." P. R. No. 14867 08/04/08 -- HLR/pd RESOLUTION NO A RESOLUTION AUTHORIZING THE CIl'Y MANAGER TO EXECUTE RENEWAL CONTRACTS BETWEEN ITS THIRD PARTY ADMINISTRATOR (ADMINISTRATIVE SERVICES ONLI~ 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 N0. (S) : 614 -HEALTH INSURANCE FUND WHEREAS, the City Council of the City of Port Arthur deems it necessary and appropriate to continue major medical health care benefits for the City's employees and its retirees, and; WHEREAS, the City Council received responses to its Request for Proposals (RFP) at 3:00 p.m. on July 9, 2008. Thirteen (1.3) responses were received as it relates to aself-insured major medical insurance programs; arid, WHEREAS, the City Council deems it in the best interest of the citizens of Port Arthur to be self-funded and to accept the bid proposal from Blue Cross and Blue Shield of Texas, Inc. as a third party administrator at an estimated asst of $354,120 per year (administrative charge based on the present number of employees and retirees) as well as at a cost of $391,925 per year for stop loss premium (excess indemnity), and; WHEREAS, such contracting witr~ Blue Cross and Blue Shield of l"exas, Inc. complies with Sections 252.021(b), Competitive Requirements for Certain P. R. No. 14867 08/04/08- HLR/pd Page 2 of 5 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 Exhibits "A-1", and "A-2" v~rhich reflect the costs for administration by Blue Cross and Blue Shield of Texas, the stop loss premium, the expected reserve, and, WHEREAS, the premiums for all impacted active employees and/or dependents will be increased approximately 7%, and approximately Ei.S°/a premium increase for all impacted retirees and and/or dependents (rate chart attached hereto as Exhibit "B-1"and "B-2"}; and, WHEREAS, the Basic Life Insurance will also be continued per the Blue Cross and Blue Shield of Texas bid proposal dated 6/4/08 attached hereto as Exhibit "C", which will cost the City $1.44 per employee per month (fora $6,000 death benefit policy), and, WHEREAS, as part of the Blue Cross and Blue Shield of Texas bid proposal, the City is also obtaining Accidental Death and Dismemberment insurance on behalf of its employees which will cost the City $.20 per employee per unit (fora $5,000 accidental death and dismemberment policy) per month. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF I~ORT ARTHUR: P. R. No. 14867 08/04/08 - HLR/pd Page 3 of 5 THAT, the City Council of the City of Port Arthur hereby awards, 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 Administrative Services Only for the City of Port Arthur's Group Medical, Dental Blue Cross & Blue Shield Basic Life & AD&D Excess Loss Indemnity Blue Cross & Blue Shield Blue Cross & Blue Shield EFFECTIVE DAT"E November 1, 2008 November 1, 2()08 November 1, 2008 THAT, the bid proposal submitted by Blue Cross and Blue Shield of Texas, Inc. dated 7/7/08 as delineated in Exhibit ~~D" (attached), is hereby approved. 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 charge to bind coverage pending receipt of the Contract for Third Party Administrator Administrative Services and the Con{tracts for Insurance; and, THAT, the City Manager is hereby directed to take all actions necess<~ry to ensure proper funding of tfie City of Port Arthur's employee health insurance P.R. No. 14867 08/04/08 - HLR/pd Page 4 of 5 Fund (pending budget approval) in accordance with Exhibits "A (1, 2,)", "13 (1, 2)", "C", "D", attached hereto and made part hereof; and, 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, 2008, at a Regular Meeting of the City Council of the City of Port Arthur, by the following vote: AYES: Councilmembers NOES: Deloris "Bobbie" Prince, Mayor ATTEST: City Secretary APPROVED AS TO FORM: City Attorney P. R. No. 14867 08/04/08 - HLR/pd Page 5 of 5 APPROVED FOR ADMINISTRATION: Sfephen B. 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"`` ~ 3 ~. ` t _ r . 4 ;; W l c ~~. ~ N ~ N ~ ~O (~ CD > > ~ n ~~' ~ rt _ `~.; N ~{'y Ot C rn 70 rn H v ~"~ rn v a a v 3 M 0 ~o A w O "'~ a C x _ °' r• rn rt a~ ~= C z A rn rn ~~ 0 o~ g ^\ ~ 1 ~_ V , S ~• "'t1 x Q S ~~ f_Z Q ~_ ~~ tl~~ 'S O ...s a. ~1 0 S Q '~. H n t0 7C7 N r~ o' r- i N Exhibit "C" FORT DEARBORN LIFE Insurance Company Administrative Office • P.O. Box 65403 • Dallas, TX 7~26~-5403 • (bob) 89~-4895• Fax (972) 996-9366 June 4, 2008 Elizabeth Villarreal City of Port Arthur P.O. Box 1089 Port Arthur, Texas 77641 Subject: Renewal Analysis Package Group Life Policy #31118 Anniversary Date: 11-1-08 Dear Policyholder: Fort Dearborn Life Insurance Company would like to thank you for allowing us the opportunity to provide you and your employees with group insurance benefits. We have reviewed the current demographics of your group insurance programs .along with. your actual experience We are pleased to announce that due to a positive change iri the risk characteristics of your group along with favorable experience, a rate decrease is being implemented on the Basic Tenn Life and AD&D program effective on your anniversary date. Benefit Program Present Rates Renewal Rates Basic Life $.27 per $1,000 $.24 per $1,000 AD&D $.06 per $1,000 $.04 per $1,000 Basic Life and AD&D rates are guaranteed until 11-1-2010. We would also like to take this opportunity to advise you FDL offers a variety of Group Life, Disability and financial insurance products designed to increase the value of employment at your company and enhance your ability to attract and retain skilled, experienced employees. These products include: Dependent Life, Short Term Disability, Long Term Disability, and Fixed Annuities. FDL also offers a complete portfolio of employee paid voluntary benefits including Voluntary Life and AD&D, Voluntary Long Term Disability, and Voluntary Short Term Disability If you are interested in pursing proposals for any of these products, contact your Regional Sales Manager. FDL values our relationship with you and looks forward to continuing to provide quality service to your employees in the future. Sincerely, Karen Waterhouse Senior Underwriter, Group Underwriting cc: Christi Clisham, Regional Sales Manager c~x>>lul~ .u '~ae, ~ .' 1~ c ' .. ~ . ~' B1~eCross B1ueShielcl of Texas July 7, 2008 Harvey L. Robinson Assistant City Manager Office of the City Secretary- City Hall 444 4th Street Port Arthur, Texas 77641 Dear Mr. Robinson: On behalf of Blue Cross and Blue Shield of Texas (E',CBSTX), I am pleased to present this renewal proposal for the City of Port Arthur (the City). As the current carrier, BCBSTX has demonstrated a commitment to outstanding account management and customer service. The account management team will continue to ensure the ongoing maintenance of its benefits program with the City. BCBSTX has long been known for its extensive network and commitment to customer service. We are building on that foundation to make health care more; economical and accessible for employers and members in several innovative ways. BCBSTX is meeting the demands of transparency through our Blue Distinction programs which include a treatment cost estimator, hospital comparison tool, and B1ueCompare, which gives members quality and affordability information about providers in our network. In x968, BCBSTX began offering utilization management services and we continue to make our programs more accessible and effective. Today, we offer Blue Care Connection , a total health management program, which views members on a continuum of care ranging from wellness to chronic conditions. Previously, we focused our programs on chronic members and have now expanded them to focus on wellness. These programs encourage employees to make health and financial decisions which, in tum, could decrease overall costs. We value the partnership we have built with the City and look forward to continuing our relationship. If you have any questions, please feel free to contact me at any time. Sincerely, Terry Villiva Account Executive (409)896-0104 terry villiva ~bcbstx.com P.O. Box 655730 Dallas, Texas 75265-5730 www.bcbstx.com A Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield ,4ssociation 00044.0304