Title
Consider approving Resolution No. 2014-080 authorizing the City Manager to negotiate and execute a contract for medical stop-loss insurance coverage in an amount not to exceed $410,000 and take appropriate action.
Body
BACKGROUND:
Stop-loss insurance is a product that provides protection against catastrophic or unpredictable losses. It is purchased by employers who have decided to self-fund their employee benefit plans, but do not want to assume 100% of the liability for losses arising from the plans. Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits called deductibles.
The City has partnered with ING this past year. Current covered benefits are medical and prescription drugs for employees and retirees. The annual aggregate attachment factor is $4.4 million with a specific deductable of $125,000. Claims during the 2014 plan year are anticipated to total $3.4 million, which is down from 3.7 Million for 2013.
DISCUSSION:
In October, City Administration will be reviewing proposals for stop-loss insurance coverage for an effective date of January 1, 2015. The cost for this coverage is not to exceed $410,000. The current cost is $369,000.
RECOMMENDATION:
City Administration recommends authorizing the City Manager to negotiate and execute a contract for stop-loss insurance coverage in an amount not to exceed $410,000.
ACTIONS:
1) Motion to approve Resolution No. 2014-080 authorizing the City Manager to negotiate and execute a contract for stop-loss insurance coverage in an amount not to exceed $410,000
2) Motion to deny Resolution No. 2014-080 authorizing the City Manager to negotiate and execute a contract for stop-loss insurance coverage in an amount not to exceed $410,000
3) Motion to modify to meet the needs of the Council.
4) Motion to table the issue for further study or take no action.
ATTACHMENTS:
1. Resolution No. 2014-080
2. Employee-City Contribution Model