Title
Health Insurance Renewal Proposals
History
In 2022, in an effort to better control health care costs, staff requested a quote from the Intergovernmental Personnel Benefit Cooperative (IPBC). The IPBC, which was established in 1979, is an intergovernmental agency created under Illinois statutes that allows units of local government to band together for the purpose of insurance. IPBC has 162 member entities and cover over 20,000 employees and retirees. Entities include Lake County, Schaumburg, Hoffman Estates, Mount Prospect, Buffalo Grove, Palatine, and Wheaton. The IPBC provides economies of scale and risk pooling that allows members more financial stability than other options in a fully transparent environment.
As a stand-alone entity, the Village, in cooperation with its brokerage/consultant the Horton Group (now known as the Marsh McLennan Agency), has done a good job of consistently reviewing and modifying our plans for ways to improve cost-saving measures, share costs with employees and reduce claims costs where possible. However, despite these efforts, when the Village goes to bid for networks and services, providers respond to our approximately 250 employees (employees in the IUOE labor union have a separate health insurance plan managed by IUOE). In contrast to this, the IPBC offers the Village the ability to benefit from the buying power of over 20,000 employees. This allows the Village greater access to medical networks that may have been cost prohibitive in the past as an individual entity.
As part of the 2022 IPBC proposal, for the exact same employee health insurance coverage, with the exact same insurance carrier (Blue Cross), the Village would have saved over a $1 million (approximately 25%) in just the first year (2023 plan year) alone. Ultimately, the Village Board at the time decided not to pursue IPBC membership.
Although the IPBC allows this greater access to networks, it does not dictate what members’ individual plans look like. Members are able to choose among different networks and to model plans in ways that are cost effective and most appropriate for their employees. With our membership in the IPBC, the Village can maintain the many cost-saving aspects that have put into place over the years and maintain autonomy to make plan design changes in the future that will best fit the Village’s organizational needs.
If the Village were to decide to pursue IPBC membership, the Village would have to pass an Ordinance requesting membership and then would need to be accepted by the IPBC Executive Board. The passage of the Ordinance would need to occur 90 days prior to January 1, 2026. For governance purposes, the IPBC uses two types of membership classifications: a full member and a sub-pool member. Agencies with 150 or more covered lives are full members and are entitled to a single vote on the IPBC Board of Directors. Agencies with less than 150 members are assigned to a sub-pool which collectively represents a single vote on the Board of Directors. As a full member, the Village would be bound by the IPBC Bylaws and Policy Manual.
Soliciting Proposals
Based on Village Board direction, staff could re-initiate the process of soliciting health insurance proposals. In addition to IPBC, staff would solicit a comprehensive proposal from the Marsh McLennan Agency. New York state-based Marsh McLennan Agency acquired The Horton Group, Inc. in August, 2024.
If the Village did indeed become a member of IPBC, the Marsh McLennan Agency, through their Horton Group affiliate, could continue to be the Village’s broker for property & casualty insurance and workers compensation insurance. Currently, as recommended by the Horton Group, the Village is part of the following risk pools: the Illinois Counties Risk Management Trust (ICRMT) and the Illinois Public Risk Fund (IPRF).
Recommended Action/Motion
I move to recommend to the Village Board to direct Village staff to solicit health insurance proposals from the Intergovernmental Personnel Benefit Cooperative (IPBC) as well as a comprehensive re-proposal for health insurance and property and casualty insurance and workers compensation insurance from the Marsh McLennan Agency.