HomeMy WebLinkAboutPR13278: BLUE CROSS BLUE SHIELDMEMO
To: May~' & City Council
From: Palricin Dav~, Senior Human Resource Analyst
Dat~ September 16, 2005
Re: Adoption of Proposed Resolution No. 13278 Authorb~n~ the City Manager to Execute
Necesso~ry Renewal Coutrl~-t Doeul~al~ for it Third PJtFty Admlnhtrator
A(Iminhtrattve Services Only Contract for the City of Port Arthur Group Medic~
Demi Imumnce, FOF lhsic Life, lJmic A~ideutsl Deuth end Dismemberment, and
Excess Loss Indemnity with Blue Cross and Blue Shield ofTex, as, Inc,
We reconuuend that the City Council adopt pro~ Resolution No. 13278 which authorizes the City
Manager to Execute Necessary Renewal C~;uact Documents for a Third Party Administrator
Administrative Services Only C~ut~act for ~he City of Port Arthur Group Medical, Enacual Insurance;
For Basic Life, Basic Accidental Death and Dismembermem, and Excess Loss Indemnity with Blue
Cross and Blue Shield of Texas, Inc.
Buelawonnd:
The City of Port Arthur issued a RFP (Request for Proposal) for its major medical heal~ and dental
insurance plan on July 1, 2003, which resulted in Blue Cross and Blue Shield of Texas submitting the
successful proposal. The initial comract was for flwee (3) years renewable annually, with the City
having the option to renew for an addhional two (2) years if it is deemed in the City's hest interest and
mutual agreement can he reached on cost, service provision, e~c.
Aiter considered ~iew of the renewal options presented by Blue Cross and Blue Shield of Texas, staff
is racommmding the City exercise its option to accept the third (3rd)year rmewal offer. The Medicare
Part D (Prescription Pr~ram) is under review and the required actuarial study is being pursued.
A breakdown or,he cost and benefit levels for the 11/t/~5 plan year is delineated as follows:
~ The cost of administrative services only (ASO) coverage will change from $396,093 to $382,672 a
reduction of $13,421 ove~ last year's rates due to plan modifications.
,,Remember, we a;~ l~re to serve ~de clffzMs of Port AJthu~
Mayor & City Couneil/M~mo
September 16, 2005
Page 2
~ The cost of stop loss coverage will increase from $401,045 to $464,969 a difference of $63,924.
~, Dental rates will remain at $243,624.
~. Life and Accidental Death and Dismemberment (AD&D) rates will remain the same.
~, Plan amandmenls as follows:
1). Change in RX co-pays from SS/generic, $20/preferred brand, $35/non-preferred brand to
2). Change in $$0 Emergency Room (ER) treatment ex,pay to $1~ £R co-pay.
3). AIl other existing co-pays and deduet~les will remain the sam~
~' 5% premium increase for all iml~oted employees, r~irees and/or dependents.
Approval of proposed Resolution No. 13278 will require funding the following amounts: {Note:
Amounts am estimated. Actual costs will depend on the City's experience and the number of plan
purtici nts.}
Funding will be from Fund No. 614- Helflth Insurance Fund
Major Medical Health Insurance ................................................ $$,$77,038
Dental Insurance .................................................................. $ 243,624
Life Insurance .................................................... $12,250
Accidental De,th & Dismamberment (AD&D) .............. $ 3,000
TOTAL RECOMMENDED FUNI)ING I~ROM
FUND NO. 614 HOSPITAL INSURANCE FUNI) ...........................
Adoption of the proposed resolution would have no impoot on smtt~4 levels.
$ m rv:
We recommend that the City Council adopt proposed Resolution No. 13278 - which amhorizes the
City Manager to Exeent~ Necessary Renewal Contract Doeum~ for a Third Pmly Admlni.~trator
^dmlni~ve Services Only Conmmt for the City of Port Arthur Group Medical, Dental Instmme~,
For Basic Life and Basic Accidental Death and Dismemberment, and ~ Loss Indemnity with Blue
Cross and Blue Shield of Texas, Inc.
P.R. No. 13278
09/16/05 - HLR/ATT
RESOLU'r[ON NO.
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE RENEWAL
CONTRACTS BETWEEN ITS THIRD PARTY ADMINIS'I'RATOR
(ADM[NI~-TRATIVE SERVICES ONLY) FOR THE CITY OF PORT ARTHUR
GROUP MEDICAL, DENTAL INSURANCE; FOR BASIC LIFE, AND FOR BASIC
ACCIDENTAL DEATH AND DISMEMBERMENT, EXCESS LOSS INDEMNITY
WITH BLUE CROSS AND BLUE SHIELD OF TEXAS, INC.
FUND NO. (S): 61,~ - HOSPITAL INSURANCE FUND
WHEREAS, the City Council of the City of Port Arthur deems it nec__~-3_ ry
and appropriate to continue major medical health care benefits for the City's
employees and its retirees, and;
WHEREAS, the City Council deems it in the best interest of the citizens of
Port Arthur to be self-funded and to contract with Blue Cross and Blue Shield of
Texas, [nc. as a third party administrator at an estimated cost of $382,672 per
year (administrative charge based on the present number of employees and
retirees) as well as at a cost of $464,969 per year for stop loss premium (excess
indemnity), and;
WHEREAS, such contracting with Blue Cross and Blue Shield of Texas,
[nc. complies with Sections 252.021(b), Comoetitive Reauirements for Certain
~, 252.024, Section of ]Insurance Broker. and 252.048, ~,
respectively of the Local Govemment Code; and,
P.R. No. 13278
09/16/05 - HLR/AI-r
Page 2 of 4
WHEREAS, the nature of the premiums to be charged by the City and
the benefits are as delineated in Exhibits "A-i", and "A-2" which reflect the costs
for administration by Blue Cross and Blue Shield of Texas, the stop loss premium,
the expected reserve, and,
WHEREAS, the Basic Life Insurance will also be continued, with no
increase, as per the Blue Cross and Blue Shield of Texas communication dated
6/3/05 attached hereto as Exhibit "B", which will cost the City $1.62 per
employee per month (for a $6,000 death benef~ policy), and,
WHEREAS, as part of the renewal, the C"~y is also obtaining Accidental
Death and Dismemberment insurance on behalf of its employees which will cost
the City $.30 per employee per unit (for a $5,000 accidental death and
dismemberment policy) per month, at a total expected to be less than $3,000
per year.
BE Ti' RESOLVED BY THE C-TTY COUNCIL OF THE L~lt' OF PORT
ARTHUR:
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 Blue Cross & Blue Shield November 1, 2005
Only for the City of Port
Arthur's Group Medical,
Dental
P.R. No. 13278
09/16/05 - HLR/ATT
Page 3of4
Basic Life Blue Cross & Blue Shield November l, 2005
Excess Loss l~ndemnity Blue Cross & Blue Shield November :L, 2005
TI~AT, the renewal proposal submitted by Blue Cross and Blue Shield of
Texas, l~nc. dated 6/3/05 as delineated in Exhibit "B" (attached), is hereby
approved.
TFIAT, the Summary of Benefits which includes plan modifications
changing the prescription plan co-pays and the emergency room treatment co-
pay as delineated in Exhibit "C" (attached) with all other existing health plan
benefits unchanged. A 5% premium increase will be passed on to all impacted
employeesf retirees, and/or dependents as delineated in Exhibit "D" (attached);
and,
TflAT, the City klanager 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 Contracts
for 1Insurance; and,
TflAT, the City f4anager is hereby directed to take all actions necessary to
ensure proper funding of the City of Port Arthur's employee health insurance
P.R. No. 13278
09/16/05 - HLR/ATT
?n~e 4 0£4
fund in accordance with Exhibits ~A(1,2,)", "B'; "C" "D", attached hereto and
made part hereof; and,
TflAT, 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, 2005, at a Regular Meeting of the City Council of the City of Port Arthur, by
the following vote: AYES
Councilmembers.
NOES:.
Oscar Ortiz, Mayor
ATTEST:
City Secretary
APPROVED AS TO FORM:
City Attorn~ ~ ~ b e~o4~ k~
APPROVED FOR ADMINI~I'RATION:
Stephen B. FKzgibbons
APPROVED A~ TO AVA~LABI~I_1TY OF FUND~:
Director Finance
EXHIBIT "B"
City Of Port Arthur
ASO Renewal- Alternate Plan I
November 01,2005 - October 31,2006
#31118
Prepared by Blue Cross Blue Shield of Texas
BlueCross BlueShield
of Texas
June 3, 2005
Mr. Stephen Fitzgibbons
City Manager Anniversary Date: 11/01
City of Port Arthur Group #: 31118
P. O. Box 1089
Port Arthur, Texas 77641-I 089
Dear Mr. Fitzgibbons:
Thank you for allowing Blue Cross and Blue Shield of Texas (BCBSTX) the opportunity to provide group
benefit coverage to you and your employees this past year. We are proud of the partnership we have developed"
with you and will continue to strive to meet your needs for quality health care coverage while managing health
care costs.
What's New: Pharmacy Vendor, Injectable Drug Program, Radiology Quality Initiative and Medical
Care Management Program
Managing Pharmacy Benefits
BCBSTX has joined several other Blue Cross and Blue Shield Association licensees in acquiring ownership
interest Prime Therapeutics LLC, a national pharmacy benefit manager (PBM).
On January 1, 2005, Prime Therapeutics will assume the management of pharmacy benefits for alt BCBSTX
health care benefit plans that include drug coverage, including mail order prescription services.
As our new PBM, Prime Therapeutics will provide comprehensive pharmacy management services. These
services include claims processing, customer service, preferred brand name drag list management, prescription
drag management and reporting, clinical programs, and a broad national network for members to access with
57,000 pharmacies nationwide. With the change to Prime Therapeutics, we gain the ability to further integrate
our pharmacy and health care benefit management and achieve closer coordination with our disease care
management programs.
Your employees will be receiving further communication closer to the transition. If your employees have
existing refills on their mail order prescriptions, most refills will automatically be transferred on their behalf to
PrimeMail, the Prime Therapeutics mail order facility. However, Texas pharmacy regulations require that new
prescriptions be obtained for compound drags and controlled substances even iftbe employee has remaining
refills.
The new preferred brand name drug list which includes modifications to further enhance the management of
prescription drag costs is attached for your review. The changes to the preferred drag list include movement of
multi-source brand name drags from the preferred brand name drag tier to the non-preferred brand name drag
tier, as a generic equivalent is available. The drags that have moved to the non-preferred brand name drag tier
are attached. These changes will provide further encouragement to your employees to play an active part in
their healthcare choices by choosing the generic prescription drag.
4180 Delaware, Suite 502, Beaumont, Texas 77706 · (409) 896-0100 · Fax (409) 896-0111
Access: Unparalleled Provider Networks
Thc Texas PPO network is one of the largest PPO networks in the state including more than 37,000 physicians
and 450 hospitals that is available in all 254 Texas counties. Our network features strong relationships with
local providers, fostered by our Office of Physician Advocacy.
Your employees also benefit from discounts on out-of-network services -- a cost protection feature that is not
available with other carriers. When PPO members choose out-of-network care, they may visit participating
traditional physicians and hospitals and benefit from the following advantages:
Participating physicians agree to accept the allowable amount, with no balance billing.
· Services deemed not medically necessary are not the member's responsibility.
· Participating providers will file the member's claims directly with BCBSTX.
Service: Excellent Customer Service, Online Capabilities
As your carrier, BCBSTX has demonstrated a commitment to outstanding account management and customer
service. The account management team will continue to interact with you as necessary to ensure the ongoing
maintenance of your benefits program. Your employees have benefited from the one-stop shopping of the Full
Service Unit. Online resources allow members to take conta-ol of their health care and afford them the necessary
information to make wise decisions.
BCBSTX.com
Comprehensive Data Reporting
Employers also have access to the Blue Outlook management reporting function which includes:
easy-to-read reports and graphs
· integration of HMO and non-HMO data, as applicable
· immediate access to data at any time
· electronic storage
· statistical monitoring
· advanced technological capabilities, by delivering data directly to the desktop
Based on group size and funding arrangement, data reporting services may include standard monthly,
quarterly, and annual reports that provide in-depth utilization analysis, enrollment reports, and related
savings, such as Coordination of Benefits and subrogation. Ad hoc reports may be available for an
additional charge. Employer groups may access their reports online.
Maps - Employers may also use an interactive map to locate a BCBSTX sales office in their vicinity.
B~ueAccessf~rMembers-securedaccesst~viewc~aimsandExp~anati~ns~fBene~ts~requestrep~acement
ID cards, print temporary ID cards, and e-mail questions to Customer Service.
)~ Provider Finder® and Pharmacy Finder - downloadable network provider directories that can be formatted
by productJnetwork type, region, and city area. A link to the Blue Cross and Blue Shield Association Web
site provides a listing of national and international providers. A link to the Prime Therapeutics, LLC site is
available for national pharmacy listings.
)~ Pharmacy-related services - including online mail order capabilities for members currently enrolled in
Prime Therapeutics' mail order prescription program; an alphabetical listing of the most commonly
prescribed medications available in the preferred brand name category with noted generic equivalents; and
information about the BCBSTX three-tier copayment structure.
2
Downloadableforms - for claims submission, student dependent certification, prescription drug claim
reimbursement, and prescription mail orders.
Custorner service- for replacement lD card requests and other e-mail inquiries.
Health Care Decision Tools
In addition to offering eligibility and claim status information online, BCBSTX provides members with access
to exclusive online health and wellness content and decision-making tools.
> Members will benefit from the Mayo Clinic's Health Risk Assessment and other self-management Web~
based tools relating to common h~alth care problems such as asthma, low back pain, and headaches. These
programs will be integrated with BCBSTX care management programs, as applicable. Members may also
access information about specific diseases and treatments, including alternative medicine and interactive
healtlVlifestyle decision-making tools.
} BCBSTX also offers members access to HealthShare Technology's Select Quality Cam (SQC) Consumer, a
hospital comparison tool that allows members to make informed hospital selections using interactive
software. Using SQC Consumer, members can generate a list of hospitals meeting criteria they've
specified, such as patient volume, location, mortality rates, and unfavorable outcomes. Members can
perform their own side-by-side comparisons of network hospitals, to ensure their comfort and satisfaction
with their hospital experience.
Value: Competitive Administrative Costs, Innovative Medical Management, Health Care Cost Solutions
Keeping health care affordable is important to us because it's important to you. BCBSTX takes a proactive
approach to lowering the cost of health care for employers and employees.
Blue Resource
In conjunction ~vith the Blue Cross and Blue Shield Association, BCBSTX has launched a Blue Resource to
increase awareness of how health care choices impact the rising cost of health care.
BCBSTX provides applicable messages and artwork online at www.bcbstx, com, at no cost to employers.
Campaign materials are grouped by health care topic such as generic drugs versus name brand drugs, or seeing a
PCP for non-emergency situations rather than going to the emergency room. The campaign also includes safety
and wellness information (the benefits of walking, healthy diets, buckling up, and others).
V~s~on One Eyecare Pro~ra
BCBSTX and HMO Blue* Texas is excited to offer your employees access to thc Vision One Eyecare
Program,® through Cole Managnd Vision. This program allows your employees to receive discounts of up to
60% for eye examinations, lenses, frames, and contacts by utilizing the Cole Managed Vision's network of
providers. Discounts are also available for LASIK surgery. To schedule a free evaluation with a participating
LASIK network surgeon, call 1-888-705-2020.
The Cole Managed Vision network includes Sears Optical, Pearle Vision, Target Optical, JCPenney Optical, as
well as independent providers of vision services. To receive the savings for vision services from these
providers, your employees simply show their health plan identification card at a Cole Managed Vision network
location.
Rates
The rates provided in this renewal are effective for the 12-month period beginning 11/1/2005.
These rates are subject to the terms and conditions of the applicable group agreement, contract, schedule of
coverage, schedule of specifications, or schedule of benefits.
~ Please advise your agent and/or BCBSTX of your renewal decision at least 15 days prior to your
anniversary date.
PLEASE SEE A TTA CHED ASO EXHIBITS FOR HEAL TH AND DENTAL RATES
Current Rates .Renewal Rates
Basic Life $ .27per $1,000 no change
AD&D $ .06per $1,000 no change
Additional Information and Reminders
Texas legislation mandates an annual open enrollment period. This means your annual open enrollment for all
eligible employees and their dependents must be at least 31 days prior to your anniversary date and extend 31
consecutive days. It is imperative that you immediately submit all enrollment applications and change forms
during this open enrollment period. A late enroltee's application received altar your effective date will not be
eligible for coverage until your group's open enrollment the next year.
As a reminder, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) became effective July
1, 1997 and continues to affect all individuals eligible to enroll for coverage under your plan. A requirement of
this bill is to provide a notice of Enrollment Rights and Pre-Existing Condition Exclusion and Privacy Practices.
The notices are directly related to and required by HIPAA and do not necessarily reflect the rules mandated by
HB 1212 (Texas Legislation). Copies of the Special HIPAA Notice and HIPAA Notice of Privacy Practices are
included with your renewal for distribution. Please copy and distribute these notices directly to all individuals
as soon as possible. These notices must be given to each employee prior to their enrolling or declining health
care coverage.
If you have any questions regarding the information provided in this letter, any of the enclosed documents, or
would like alternative plans quoted, please do not hesitate to contact your agent. We appreciate the opportunity
to provide your benefits program and we value the partnership we have built with you and look forward to
continuing our relationship.
Sincerely,
Terry VilliSa, MHP
Account Executive
Enclosures
cc: Mickey Moshier