R2024-342 Resolution Authorizing Agreement and Amendment with BlueCross BlueShield of Ilinois for Administration of the City Group Health Benefit Plan for Calendar Year 2025

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tr Financial Management DATE: 11/4/2024 MEMO: TO: Honorable Mayor Moore Wolfe and City Council Members FROM: Tim Gleason,City Manager Ruby F.James,City Treasurer&Chief Financial Officer Brian Hastings,Risk Manager SUBJECT: Resolution Authorizing Agreement and Amendment with BlueCross BlueShield of Ilinois for Administration of the City Group Health Benefit Plan for Calendar Year 2025 SUMMARY RECOMMENDATION: City Administration recommends City Council approval of the attached resolution authorizing the agreement for renewal of the administration of the City's self-insured group health benefit plans including claims administration and stop loss insurance for the period January 1,2025 to December 31,2025. BACKGROUND: BlueCross BlueShield has been the City's third-party administrator for the city self-insured group healthcare benefit plan since 2008 and continues to be an excellent administrator for the group healthcare benefit plan. BlueCross BlueShield continues to offer the largest network of doctors and hospitals in and out of state and offers the best price offerings for coverage for medical care due to its substantial network of medical providers. Current Proposed %Change 2024 2025 Illinois access fee 1.44% 1.19% -17.4% Administration fee $60.30 $60.10 0.0% Rx rebate credit $(128.45) $(128.45) 0.0% Medical rebate credit $(2.50) $(2.50) 0.0% Additional services $2.52 $2.02 -19.8% Net administration fee $(68.13) $(68.83) -0.1% Stop loss $ 161.06 $268.11 66.5% Fixed cost per month $95.57 $202.21 111.6% Total Projected Costs PEPM $ 1,711.09 $ 1,865.11 9.0% Contract Total Dollars $11.2 million $12.3 million 9.8% Projected Enrollment 544 551 1.3% The proposed 2025 fixed cost fees quoted by BlueCross BlueShield will increase in aggregate versus the current 2024 fixed cost fees. 2024 fixed cost fees resulted in a 111.6% increase based largely on an increase in enrollment and stop loss fees. This resulted in a 9%increase in City and employee out of pocket costs overall for claims and expenses. The significant increase in the stop loss fee is based on the continuing and expected claims experience that exceeded the stop loss limit of$200,000 each year. There is nothing the City can implement to reduce these particular stop loss claims. First Mid Bank, our advisor, did bid the stop loss line to two other providers to obtain the best pricing for the City. In the end, Blue Cross did provide the best pricing for Stop Loss coverage.