Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Authorizing The Appropriate City Officials To Execute A One-Year Agreement With Cigna For Stop Loss Insurance For An Amount Not To Exceed $579,146.70.
Strategic Plan Focus
Employee Development & Empowerment
Body
Staff Recommends: Approval of the attached Resolution.
Explanation:
The City holds stop loss insurance for both Individual Stop Loss (ISL) and Aggregate Stop Loss (ASL) with Cigna who also administers the City's health insurance program. For the 2020 calendar as of August 2020, there were 15 large claimants with claims exceeding $100,000.00, totaling $2.4 million in claims. As of November, 2020 there are currently three large claims exceeding the ISL threshold of $350,000.00 with stop loss reimbursements for the 2020 calendar year of $70,100.00. Historically there have been two large claims over the $350,000.00 ISL since 2015. Gehring Group, the City's benefits consultant conducted an analysis that explored various options to determine the optimal threshold based upon the City's historical large claims and premium savings. Due to premium changes, historical claims data, and the current positive trending forecast of a reduced number of large claimants, Gehring is recommending a change in our ISL from $350,000.00 to $750,000.00. This change will decrease the current rates which will provide a 57.1% savings to the City by reducing the annual premium to $579,146.70. The renewal premium of $579,146.70 has an added 10% to the actual premium quoted in the back-up documentation which is $526,497.00 to allow for fluctuations. It is the City's plan to continue to set aside premium savings by taking on more liability, into an account allowing for the City to be self-insured for such high claimants vs. paying a third party for this insurance. Combining our stop loss vendor with our ASO administrator allows for faster and more accurate stop loss reimbursements to the City. This Re...
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