Title
Consider approving Resolution No. 2025-230 authorizing the City Manager to execute a one-year agreement for Stop-Loss Insurance in the amount of $559,751; and take appropriate action.
Body
REQUESTOR:
Human Resources Department
BACKGROUND:
The City has maintained stop-loss insurance year to year to protect against excess exposure and liability of the health fund budget and high-cost claimants. This insurance is typically for a one-year period and renewed annually after a request for proposals (RFP), with rates being driven by internal and external factors.
Currently, the City maintains a $150,000 deductible for stop-loss insurance. The City is responsible for paying all claims incurred after employee deductibles/out-of-pocket max amounts are met. Stop-loss insurance provides a “cap” on how much the City is liable for, which is currently $150,000.
Example: An employee is diagnosed with a critical illness, hospitalized for 45 days, and undergoes multiple treatments and surgeries. The costs incurred are $400,000. The City will pay $400,000 and receive reimbursement from stop-loss insurance in the amount of $250,000, limiting the City’s total liability to $150,000.
CY2025 reimbursements to date total $532,620, while the insurance premium amount (cost for the stop-loss insurance policy) was $621,556.
DISCUSSION:
After an RFP was conducted in September 2025 by the City’s insurance broker, the lowest cost vendor, QBE, was selected. QBE is also our current vendor, and the renewal includes the following details:
- The City will increase the deductible for each claim from $150,000 to $200,000. This change results in total savings of $61,805 (10%) over current rates. The City’s current rate for CY2025 was $621,556.
- There will be no “lasers” attached to the renewal. A “laser” means the carrier would exclude certain high-risk or historically high-cost individuals, which would increase the City’s total liability for claims.
- QBE is the only vendor that offered a no-laser provision.
- This type of policy has no impact on how employees utilize their benefits; it is strictly a cost mitigation tool for our budget.
FISCAL IMPACT:
Budget impact of $559,751.
POSSIBLE COUNCIL ACTION:
1. I move to approve Resolution No. 2025-230 as presented.
2. I move to approve Resolution No. 2025-230, with modifications.
3. I move to table the item or take no action.
ATTACHMENT(S):
1. Resolution No. 2025-230
2. Contract
3. Presentation