Loading...
R-1469 - 05/26/2015 - PERSONNEL - Resolutions Supporting Documents ITEM 10.A.2 tz- ©4 k 0 v 0 ,mr- CIO 4F m,.-. AGENDAITEM Regular Board of Trustees Meeting of May 26, 2015 SUBJECT: Health,;Third Party Administrator and Stop Loss Insurance, Dental,Life/AD&.D Insurance and Vision Insurance Agreements for 2015-2016 Plan Year FROM: Tate Andris, Human Resource Generalist BUDGET SOURCEIBUDGET IMPACT: Program 133 Employee Benefits RECOMMENDED MOTION I move to waive competitive bidding and approve the staff recommendation and direct staff to execute Agreements after receiving final attorney review with BlueCross BlueShield(BC/BS)of Illinois for Group Health Insurance Coverage, Third Party Administrator(TPA) Service, and Stop Loss Insurance for the Plan Year starting July 1, 2015 through June 30, 2016. Further,I move to approve the staff recommendation and direct staff to execute an Agreement after receiving final attorney review with Delta Dental for the Plan Year starting July 1,2015 through June 30, 2016: Health Benefit Program; The Village operates a self-insured health insurance program for all PPO claims on a per individual basis for the first $85,000 ("individual specific attachment point") of claims in a given plan year (July 1 to June 30). This program has been in place in this format since 1993, but with different specific attachment points and TPAs. The Village secures Stop Loss Coverage for claims that exceed$85,000 per individual or over 125% of the annual aggregate specific attachment paint of expected claims. The Village health benefit program has approximately 174 employees, which includes approximately 30 retirees (retirees/COBRA employees on the traditional insurance plan who pay 100% of the equivalent premium for their coverage) in the program, ,plus eligible dependents for a total of approximately 399 participants. A provision in the Affordable Care Act (ACA) also requires us to extend health benefits to employees who average over 30 hours per weep. We currently have approximately 12 employees who fall into that category. The Oak Brook Park District is also on our plan paying the full premium cost for all eligible individuals, The Village's program itself is a three-tier premium systern consisting of single, single+1 and family coverage for a'iZ- health, dental and vision coverage. In addition, the Village provides group term life insurance coverage at$100,000 for all employees. Renewal Information: Our medical and dental plans were up for renewal. The medical plan was marketed by our broker Mesirow Financial, to four providers, all who declined to quote. The medical plan was marketed to four carriers (UHC, Aetna, Humana and Cigna). All markets declined to quote. The primary reason for declination was due to their rates being uncompetitive. The medical rates are proposed for 1 year. Medical: As for the BC/BS proposal, their initial overall renewal proposal was 6.6% (approximately $167,391) higher than last year's rate. However, after negotiations BC/BS's final proposal has a rate increase of 4.5% (approximately $114,299) higher than our current plan year. When reviewing the BC/BS proposal, there are a few key areas to highlight. The first is the estimated fixed costs. This was increased by 3.3% or approximately $12,000. Next, was claim liability, which was increased 7.5% or approximately $140,000. The Village is experiencing higher claims utilization in the current policy year. Next, the HMO portion of the medical is decreasing about 10.2% or approximately $30,500. Lastly, there are the Affordable Care Act (ACA) fees, which are decreasing with this plan year. The estimated total cost for the PPO policies will be around $14,000 for this plan year for the transitional reinsurance fee. The Village avoids paying the Insurance Industry Fee by continuing to be self-funded on the PPO policies. If we were subject to the fee, it would increase costs by approximately 3%. Dental: This year, the Village's dental insurance was also up for renewal. The costs for the dental program through Delta Dental are not increasing over the current year. The dental rate is being proposed for 1 year. Life/AD&D and Vision: The village is currently in the second year of a two-year agreement with Dearborn National to provide Life and AD&D insurance. The contract will expire June 30th, 2016. Additionally, we are in the second year of a four year agreement with EyeMed for vision insurance. Therefore, there will be no additional costs associated with these two benefit plans. The village will continue to promote its wellness program allowing those who receive insurance up to 2% off their premium and for those without insurance the opportunity to receive gift cards for achieving pre-determined wellness goals. Overall, the program continues to provide many opportunities for employees to continue their healthy efforts. These programs include annual wellness evaluation, lunch and learn programming and group fitness activities such as the pink 5k event at the Oak Brook Park District. Recommendation: 1. Staff is recommending the self insurance fund ensure a balance of$379,444. This fund balance is maintained by the premiums paid by both the employees and employer monthly health contributions. All claims and health related expenses are budgeted from the self-insurance fund. Therefore, we recommend that 2.8% of premiums be set aside to ensure the target fund balance. 2. The Village is committed to providing excellent benefits to employees in the most cost effective way. Over the next plan year we are recommending a comprehensive review of our insurance program involving all applicable employee groups. While we evaluate our options, we recommend no changes to the current plan design for applicable non-union groups. 3. We recommend the Village President and Board of Trustees continue to have access to the health insurance benefits including health, dental and vision plans at the full premium cost. RESOLUTION 2015-PL-IS-R-1469 A RESOLUTION APPROVING THE WAIVER OF COMPETITIVE BIDDING AND AUTHORIZING THE PURCHASE OF INSURANCE BENEFITS FOR EMPLOYEES WHEREAS, the Village provides its employees with health and dental insurance benefits (collectively, "Insurance Plans"); and WHEREAS, the Village currently purchases health insurance coverage, third-party administrator services, and stop loss insurance from BlueCross BlueShield of Illinois (collectively, "BC/BS Plans'; and WHEREAS, the Village currently purchases dental insurance coverage from Delta Dental ("Delta Plan"); and WHEREAS, the Insurance Plans are up for renewal; and WHEREAS, instead of putting the purchase of the Insurance Plans out to bid or request for competitive proposals, the Village Board retained Mesirow Financial to market the Insurance Plans to various insurance providers to obtain the most advantageous Insurance Plans for the Village; and WHEREAS, because the Village retained Mesirow Financial to obtain quotes from various insurance providers, and the Village Board believes that Mesirow Financial has negotiated for the purchase of Insurance Plans that are advantageous to the Village, Village staff has recommended that the Village waive competitive bidding for the purchase of the Insurance Plans; and WHEREAS, Village staff has recommended the Village Board renew the BC/BS Plans and the Delta Plan through June 30, 2016 (collectively, "Renewals"); and WHEREAS, the President and Board of Trustees, being fully advised in the premises, have determined that it is in the best interests of the Village and its residents to so waive competitive bidding and to approve the Renewals, all subject to the appropriation of sufficient funds for the Renewals in the future fiscal year; NOW THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows: Section 1: Recitals. The foregoing recitals are hereby incorporated into, and made a part of, this Resolution as the findings of the President and Board of Trustees of the Village of Oak Brook. Section 2: Waiver of Competitive Bidding Requirements. The advertising and bidding requirements for the purchase of the Insurance Plans are hereby waived in accordance with Section 1-7- 4 of the Village Code. Section 3: Authorization of Renewals. The purchase of the Renewals is hereby authorized. Section 4: Execution of Required Documentation. The President, the Village Manager, and the Village Clerk shall be, and are hereby, authorized to execute and attest, on behalf of the Village all documents necessary to complete the purchase of the Renewals pursuant to Section 3 of this Resolution, which documentation shall be in a final form approved by the Village Attorney. Section 5: Effective Date. This Resolution shall be in full force and effect from and after its passage by two-thirds of the Trustees and its approval in the manner provided by law. [SIGNATURE PAGE FOLLOWS] Resolution 2015-PP-IS-R-1469 Approving the Purchase of Insurance Plans Page 2 of 2 APPROVED THIS 26th day of May, 2015 Gopal G. Lalmalani Village President PASSED THIS 26th day of May, 2015 Ayes: Nays: Absent: ATTEST: Charlotte K. Pruss Village Clerk