R-1723 - 05/22/2018 - PURCHASING - Resolutions Supporting DocumentsBOT AGENDA Page 1
BOARD OF TRUSTEES MEETING
SAMUEL E. DEAN BOARD ROOM
BUTLER GOVERNMENT CENTER
1200 OAK BROOK ROAD
OAK BROOK, ILLINOIS
630-368-5000
AGENDA ITEM
Regular Board of Trustees Meeting
of
May 22, 2018
SUBJECT: Health, Third Party Administrator and Stop Loss Insurance, Dental,
Life/AD&D Insurance, Vision Insurance & Telemedicine
Agreements for 2018 - 2019 Plan Year
FROM: Riccardo F. Ginex, Village Manager
BUDGET SOURCE/BUDGET IMPACT: Program 128 - Employee Benefits
RECOMMENDED MOTION: I move to approve Resolution 2018-PL-IS-R-1723, a
Resolution Approving the Waiver of Competitive Bidding and Authorizing the Purchase of
Insurance Benefits for Employees 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 as well as Delta Dental for Dental, Dearborn National for Life and EyeMed for
Vision in the Plan Year starting July 1, 2018 through June 30, 2019.
Background/History:
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 or
ISL”) 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 attachment point of expected
claims. As of March, the Village health benefit program has approximately 133
employees that include eligible dependents totaling 365 members. The Oak Brook
Park District is also on our plan paying the full premium cost for all eligible
individuals. The Village also offers a fully-insured HMO plan to all employees.
Renewal Information:
The PPO medical plan was marketed to five providers by our broker Vista National and
unfortunately all carriers declined to quote due to claims utilization. Due to our enrollment on
ITEM 9.B.1
BOT AGENDA Page 2
the PPO medical plan, BC/BS will not allow us to carve out the Stop Loss because they require
at least 250 enrolled employees. The HMO medical plan was marketed to four carriers and,
similar to last year, all markets declined to quote due to their rates being uncompetitive.
Medical: BCBS's proposal for the PPO has a rate increase of +16.64% or approximately
$428,424 higher than our current plan year. For the premium equivalents, used for
contribution splits and Cobra, the rates will increase by +11.42% which is estimated to be
$273,052 annually based on the current participation. When reviewing the BCBS proposal,
there are a few key areas to highlight: (1) the estimated fixed costs was increased by
+14.87% or approximately $48,496 and (2) this year BC/BS is requesting an increase of
+16.89% or approximately $379,928 in claim liability. We evaluated an alternative PPO
plan design, an increase in the ISL as well as a change of funding and determined the limited
estimated savings did not justify a change.
For the HMO there will be a decrease of -7.70% for the 2018 – 2019 policy year. As a
reminder, there are the Affordable Care Act (ACA) fees that were decreased last year. The
estimated total cost for the PPO policies will be around $956.00 for this plan which is now
only the Patient-Centered Outcomes Research Institute Fee (PCORI). The last year for the
Transitional Reinsurance fee was 2016. 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 to 4%. The Village does pay that 3-4% on the HMO
within the premiums along with the PCORI fee.
Dental: The Village received an increase of +3.20% or approximately $6,157 from Delta
Dental. The Village will renew with Delta Dental and will include the addition of adult fluoride
to the benefit. The Village has also decided to move from a 2-tier rate to a 3-tier rate structure.
Life/AD&D: The Village received a rate pass from Dearborn National as well as a 2-year rate
guarantee. Therefore, there will be no additional costs associated with this benefit.
Vision: The Village received a rate pass from EyeMed as well as another 4-year rate
guarantee. Therefore, there will be no additional costs associated with this benefit plans.
Telemedicine: Last year, the Village implemented 1-800MD Telemedicine to reduce the
PEPM from $8.00 to $2.48. The Village will continue to promote education on this service.
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:
The Board approves the Resolution as presented.
RESOLUTION 2018-PL-IS-R-1723
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, dental, and life 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 Village currently purchases term life insurance coverage from Dearborn National
("Dearborn 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 has once again retained Vista National Insurance Group, Inc. 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 Vista National Insurance Group, Inc. to obtain quotes
from various insurance providers, and the Village Board believes that Vista National Insurance Group,
Inc. 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: (i) the BC/BS Plans so that
they continue through June 30, 2019; (ii) the Delta Plan so that it continues through June 30, 2019; (iii)
and (iv) the Dearborn Plan so that it continues through June 30, 2019 (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 Insurance Plans, all subject to the appropriation of sufficient funds for the Insurance
Plans 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 Insurance Plan. The purchase of the Insurance Plans is hereby
authorized.
Section 4: Execution of Required Documentation. The President, Village Manager, and the
Village Clerk shall be, and are hereby, authorized to execute and attest, on behalf of the Village all
Resolution 2018-PL-IS-R-1723
Approving the Purchase of
Insurance Plans
Page 2 of 2
documents necessary to complete the purchase of the Insurance Plans 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.
APPROVED THIS 22nd day of May, 2018
Gopal G. Lalmalani
Village President
PASSED THIS 22nd day of May, 2018
Ayes:
Nays:
Absent:
ATTEST:
Charlotte K. Pruss
Village Clerk