HEALTH INSURANCEHEALTH INSURANCE

PROGRAMPROGRAM

Health Insurance Team MembersHealth Insurance Team Members

Favorite City ManagerFavorite City Manager Human ResourcesHuman Resources

FinanceFinance ContractsContracts PurchasingPurchasing

UtilityUtility FireFire

Medical DirectorMedical Director Insurance BrokerInsurance Broker

With support from the Employee CommitteeWith support from the Employee Committee

GROUP HEALTH INSURANCE GROUP HEALTH INSURANCE PROGRAM OVERHAULPROGRAM OVERHAUL

Contract with Insurance Broker on Flat Fee Contract with Insurance Broker on Flat Fee BasisBasis

Evaluate employee clinic conceptEvaluate employee clinic concept Evaluate fully-insured vs. self-insured Evaluate fully-insured vs. self-insured

optionsoptions Analyze Plan DesignAnalyze Plan Design Promote healthy workforce through Promote healthy workforce through

enhanced wellness programsenhanced wellness programs

Fully-Insured vs. Self-InsuredFully-Insured vs. Self-Insured

Fully InsuredFully Insured– Underwriters set premiums Underwriters set premiums

anticipating profit (premiums anticipating profit (premiums received exceed claims received exceed claims paid)paid)

– Lack of control over pricingLack of control over pricing– Utilization of five (5) years Utilization of five (5) years

claims experienceclaims experience– Anticipated annual increases Anticipated annual increases

based on current trends based on current trends would continue to be in would continue to be in double digitsdouble digits

Self-InsuredSelf-Insured– City pays fixed City pays fixed

administrative costsadministrative costs– City pays actual claims City pays actual claims

incurred (based upon incurred (based upon network negotiated rates)network negotiated rates)

– Dollars spent are Dollars spent are representative of care representative of care received, without insurance received, without insurance company added profitscompany added profits

– Better opportunities to Better opportunities to mitigate costsmitigate costs

– Stop Loss Insurance limits Stop Loss Insurance limits liability to $125,000 per liability to $125,000 per insuredinsured

Carrier Comparison – Fixed CostsCarrier Comparison – Fixed CostsAdministrative & Stop Loss InsuranceAdministrative & Stop Loss Insurance

CARRIERCARRIER TOTAL TOTAL ANNUAL FIXED ANNUAL FIXED

COSTSCOSTS

DIFFERENCEDIFFERENCE

AetnaAetna $368,912.00$368,912.00

Blue Cross/Blue Cross/

Blue ShieldBlue Shield

$470,554.00$470,554.00 $102,642.00$102,642.00

United United HealthcareHealthcare

$437,619.00$437,619.00 $68,707.00$68,707.00

NEXT STEPS…NEXT STEPS…

Implement Self-Insured Group Health Implement Self-Insured Group Health Insurance ProgramInsurance Program

Begin negotiations with clinic providersBegin negotiations with clinic providers Evaluate plan designsEvaluate plan designs

– Analyze adding high deductible plan optionsAnalyze adding high deductible plan options

Healthcare Empowerment Training for Healthcare Empowerment Training for Employees and FamiliesEmployees and Families

Develop Wellness Programs Develop Wellness Programs

Approve Aetna Healthcare as the Plan Approve Aetna Healthcare as the Plan Administrator for the City’s Self-Insured Administrator for the City’s Self-Insured

Group Health Insurance ProgramGroup Health Insurance Program

RECOMMENDATIONRECOMMENDATION

HEALTH INSURANCE TEAMHEALTH INSURANCE TEAM

QUESTIONS???QUESTIONS???