Title
Employee Insurance Renewal FY2013 - Approval
History
The Horton Group completed a market analysis on behalf of the Village of Orland Park and has provided final recommendations for the 01/01/2013 renewal of the following benefit programs:
• Medical/RX
• Dental
• Vision
• Life and AD&D
• STD - ASO
• Flexible Spending Account (FSA)
• Employee Assistance Program (EAP)
• Crisis Response Program (Community)
• Virgin Health Miles (Wellness Initiative)
• CHC Biometric Screenings (Wellness Initiative)
A summary of these recommended options is attached to this agenda item for reference.
Based on the final analysis provided by The Horton Group, the following carriers/vendors associated with each benefit offering effective 01/01/2013 are being recommended:
• BlueCross BlueShield of Illinois (Medical/RX) - New Carrier
• Delta Dental of Illinois (Dental)
• EyeMed (Vision)
• Dearborn National (Life/AD&D)
• Guardian (STD - ASO)
• Allied Benefit Systems (Flexible Spending Account Administration)
• Metro Family Services (Employee Assistance Program)
• Metro Family Services (Crisis Response Program - Community)
• Virgin HealthMiles (Pedometer and Rewards Program - Wellness Initiative)
• CHC (Biometric Screenings - Wellness Initiative)
• The Horton Group (Benefit Consultant)
A summary of the projected annual expense for each benefit offering is provided in an attachment.
The Village’s Medical/Rx plan is self-funded and is administered by an insurance carrier in order to provide the appropriate medical networks and administrative services. Proposals for the FY2013 Medical/Rx insurance administrator renewal are based on the carriers’ estimations of the Village’s expected claims for the year, stop loss coverage, and run-in claims. To ensure the best possible pricing, The Horton Group works on behalf of the Village to negotiate with carriers to obtain best and final offers.
The proposal provided by Aetna the incumbent carrier represented a 9.9% increase over FY2012. BlueCross BlueShield of Illinois (BCBS) presented the most competitive proposal resulting in a flat renewal. The BCBS proposal accounts for expected claims, stop loss coverage, run-out claims liability, run-out claims administration and large claim liability that will present in the new plan year. The proposal includes maintaining our current HDHP/HSA, Silver, Gold and HMO plan designs. The BCBS renewal provides for a $5,307,285 renewal, which as previously stated is significantly less than the proposal offered by the Village’s current carrier. As a result, it is recommended that the Village contract with BlueCross BlueShield of Illinois to provide the administration of the medical/RX program.
Effective 01/01/2013, non-union and IBEW employee premium contributions will continue to be based on a percentage of the overall premium cost and participation by the employee and their enrolled spouse in the biometric screenings. A healthcare equalizer for non-union and IBEW employees has been included in the initial draft of the FY2013 budget to help equalize the employee premium expense amongst employee groups. Non-union and IBEW employee contributions are as follows for each medical plan offering:
• HDHP/HSA 3%
• HMO 10%
• Silver Plan 10%.
• Gold Plan - Employees will contribute the difference between the cost to the Village of the PPO (Silver) and the current PPO (Gold) which ranges from 20% for single coverage to 30% for family coverage.
Employees in the Police Supervisors group will make employee contributions based on flat rates which are outlined in the Collective Bargaining Agreement covering the period of May 1, 2011 through April 30, 2015. Other employees covered by labor agreements not specified above will make payments for insurance as outlined in the applicable labor agreements, pending negotiations. A spreadsheet outlining the employee contributions is attached for your reference.
Mr. Michael Wojcik from the Horton Group will be present at the Finance Committee Meeting and at the Board of Trustees meeting on November 5, 2012 to explain the renewal process and answer any questions.
This agenda item is being considered by the Finance Committee and the Village Board of Trustees meeting on the same night. Village Board approval will be contingent upon receiving an approval recommendation at the Finance Committee meeting.
Financial Impact
The FY2013 budget will include $5,787,822 in the insurance fund and $49,500 in the general fund (EAP/Crisis Response) to cover the expenses associated with the Village’s employee insurance program.
Recommended Action/Motion
I move to approve the recommended carriers/vendors and associated expenses with each effective January 1, 2013.
And
To retain the Horton Group’s services at the recommended rate for FY2013.