Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Authorizing The Appropriate City Officials To Accept A One-Year Policy Between Florida Blue, Administered By HM Life Insurance Company And The City Of Hollywood For Stop Loss Insurance Coverage For An Estimated Premium Amount Of $872,130.00.
Body
Staff Recommends: Approval of the attached Resolution
Explanation:
The Office of Human Resources desires to enter into a one-year contract with a stop loss insurance carrier beginning January 1, 2015. Ascension Benefits & Insurance Solutions was competitively procured by the City to act as the City's agent of record to solicit Stop Loss Insurance quotes on the City's behalf. Ascension Benefits & Insurance Solutions has solicited stop loss quotes from seven different stop loss carriers, including our incumbent. Ascension Benefits & Insurance Solutions has completed a market analysis of all stop loss proposals received on behalf of the City's self-funded medical plan.
In addition to a renewal offer from our incumbent HM Life Insurance Company, quotes were received from Optum (part of the UHC family of companies), Voya (formerly ING) and Symetra (the City's Stop Loss carrier up until last year when replaced by HM Life Insurance Company). AIG and SunLife declined as they felt they could not be competitive and Berkley failed to respond entirely. While only two of the four quotes received were lower than our incumbent provider's quote, they are non-captive carriers and do not work simultaneously with Florida Blue our health claims administrator which would require the City to hire an additional vendor to file all stop claims received reducing any cost savings. While HM Life Insurance Company responded with an approximate 15% increase over last year (significantly lower than the other carrier) due to our high claim experience, we are not required to disclose additional information or updated claims information for the renewal as we would with the other carriers who responded whose quotes may change.
HM Life Insurance Company as the captive carrier for Florida Blue provides simultaneous funding of all claims above the specific deductible level, so the City does not have to pre-fund these claims and wait for reimbursement as would be the case with all the other carriers. HM Life Insurance Company and Florida Blue are an integrated system, transactions are faster and more efficient as claims can be processed, applied to appropriate stop-loss insurance, paid, categorized and reported quickly by the connected systems. There is no information being passed between different systems/companies. This makes the process more streamlined. HM Life Insurance Company's quote proposed a 36/12 contract renewal while the other carriers proposed a 24/12. This provides the City with broader (36 months) claims coverage vs. only 12 months going back.
The individual stop-loss insurance has an individual deductible of $350,000.00, which is the same as previous years.
The City currently has five (5) insured members whose claims exceed $200,000.00.
While increases in Stop Loss insurance are common due to the associated risks, this increase is approximately just over $100,000.00 mostly due to one large claimant on our experience.
Current contract premium = $767,094.00
Renewal premium = $872,130.00
Funding for the renewal has been identified and is available in the 2015 Fiscal Year budget fund 58
Recommended for inclusion on the agenda by:
Dr. Wazir Ishmael, City Manager
Tammie L. Hechler, Director of Human Resources