R2004-163 AUTHORIZING APPLICATIONS FOR GROUP HEALTH INSURANCE COVERAGE

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DEPARTMENT OF FINANCIAL MANAGEMENT RISK MANAGEMENT DIVISION MEMORANDUM NO. 2004-074 October 13, 2004 TO: The Honorable Mayor and City Council Members FROM: Steve Ga ity Manager Ron Neuf , irector of Financial Management L� J. Barry Leo ard, Risk Manager SUBJECT: GROUP ALTH SELF-INSURANCE RENEWAL ' Eve three ears, we re uest bids on our rou health self-insurance ro ram costs. We I� rY Y q g P P g sent letters to 13 companies who had expressed an interest in bidding on the program. We I, selected three companies from this group based on various criteria, such as experience with municipal self-insurance programs for cities of our size. • The three companies are: JL Hubbard, a local agency using a national broker; CCMSI, a regional agency in Danville; and S. C. Miller, a regional agency in Indiana. The three companies, plus the incumbent, Consociate Group, were provided with needed underwriting data, such as claims volume and number of subscribers. Each company was also assigned specific insurers to request stop loss insurance quotes. The proposals were due to us October 1, 2004. Each company provided data on their PPO networks, PPO discounts, and the cost of administration and insurance. The comparison showed Consociate had the best PPO network and a decided advantage in PPO discounts. CCMSI had the best insurance cost and administration fee. We have a contractual obligation to provide a PPO network at least as broad as the 1997 network. Consociate had the broadest network. Consociate's decided advantage in PPO discounts will generate more cost savings and more than offset the insurance cost difference. Staff recommends that we renew our group health self-insurance program with Consociate Group. The detailed submissions are available upon request. We also requested bids on the City provided life insurance program. The best cost was submitted by Acordia. Staff recommends we renew our life insurance program with Acordia.