R2007-198 AUTHORIZING EXTENSION OF ADMINISTRATIVE AGREEMENT

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DEPARTMENT OF FINANCIAL MANAGEMENT RISK MANAGEMENT DIVISION MEMORANDUM NO. 2007 — 042 October 10, 2007 TO: Honorable Ma or Paul Osb rne and i o n il M m rs y o C ty C u c e be FROM: Steve Gar ity Manager Ron Neufel ' ector of Financial Management J. Barry Leona d, Risk Manager� SUBJECT: Extension of Group Health Plan Administrative Agreement and Renewal of Group Health Plan Stop Loss Insurance � SUMMARY RECOMMENDATION: Staff recommends approval of the attached resolution regarding a 60 day temporary extension of the current group health � insurance plan administrative agreement, and application for purchase of stop loss insurance. BACKGROUND: In order to complete the selection process for the City's group health plan administrator, it will be necessary to ask the current administrator, Consociate-Dansig, to extend the City's current service agreement for sixty (60) days beyond the termination date of October 31, 2007. It was hoped that the Blue Ribbon Committee could meet this week, interview candidates for the TPA, and come to a recommendation regarding City Council action before the end of October. However, only two (2) committee members could meet this week, and we do not want to rush their work. An extension is therefore necessary to ensure uninterrupted service for the City's self-funded health insurance program. Consociate-Dansig has indicated a willingness to accommodate a request for an extension of this length. It will also be necessary to extend the City's stop loss insurance coverage in this interim period, as this policy also expires on October 31, 2007. Stop loss insurance protects the City of Decatur for both specific and aggregate losses above a specified amount. Staff recommends renewal of stop loss insurance with the current carrier, Transamerica, because of the extension request. Consociate-Dansig is an approved third party administrator (TPA) for Transamerica Insurance Company. 1