R2006-137 AUTHORIZING AGREEMENT - Laserfiche WebLink

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The Honorable Paul Osborne ' City of Decatur August 30, 2006 Page 2 We also offer an Evaluation of Current Vendors in response to direction by the City Council in our discussions at the August 21, 2006 meeting. This process will provide insight into the most appropriate health care delivery structure to ensure the City is maximizing the services of its existing providers in a most cost efficient program. This proposal summarizes our understanding of the City's current situation, describes Segal's approach to each project and the resulting deliverables, presents associated fees, and provides an overview of our firm and the services we offer. OUR UNDERSTANDING It is our understanding that the City provides employees with a healthcare plan that is self-funded and administered by the third party administrator, Consociate Dansig. Consociate also has developed the PPO network currently utilized by the City. Three plan design options are offered, varying primarily by the amount of deductible and co-pays that apply to each. Incentives for a healthy lifestyle (related to non- smokers and appropriate weight, blood pressure and cholesterol levels) are also tied to varying deductibles and employee contribution rates. The City pays the majority of the premium equivalent costs for single and family coverage for bargained employees. Management employees pay a higher contribution toward the premium. The City spends approximately $3.4 million annually in medical claims. The health plan is currently well-funded. However, claims fluctuations in past years have put a strain on the City and have created concern among Council Members and staff. This has led to their interest in engaging a consulting firm to conduct an independent review and assessment of the health benefit program. AREAS OF REVIEW The City seeks an independent review and assessment of the health benefit plan offered to employees and the work performed by its current TPA,including particular concentration of the following areas: �I � Funding Analysis � ❑ Are the health plan reserves at appropriate levels for the short-and long-term? � Should the health plan remain self-funded, or is the City's risk position such that options, including a partially self-insured or fully insured plan structure, should be considered? � Evaluation of Current Vendors _] Are the existing health care vendors (i.e., Consociate Dansig as TPA and PPO network, and Express Scripts as PBM) the most appropriate providers for the City? �J Is the current TPA structure the most cost advantageous option for the City? � Is the City maximizing its contractual arrangement options with existing vendors? � Are the City's existing contractual arrangements with vendors competitive with those of regional comparators?