Title
Village of Orland Park Employee Insurance Renewal FY2012
History
The Horton Group has completed the market analysis on behalf of Village of Orland Park and has provided final recommendations for the renewal of the following benefit programs effective 01/01/12:
• 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, we recommend the following carriers/vendors associated with each benefit offering effective 01/01/12:
• Aetna (Medical/RX)
• Delta Dental of Illinois (Dental)
• Eye Med (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 cost for each benefit offering is provided below.
Our FY2012 Medical/Rx insurance renewal proposal from Aetna represents a 12.2% increase over FY2011. This increase is attributable to stop loss and claims trends, as well as to replenish reserves. This proposal includes maintaining our current PPO (Gold and Silver), Managed Care (Select), and HDHP/HSA plan designs. Aetna continues to provide competitive pricing and has transitioned effectively as our new medical/RX carrier in 2011. As a result, staff recommends to remain with Aetna as our Medical/RX carrier.
Effective 1/1/2012, non-union and IBEW employee premium contributions will be based on a percentage of the overall premium cost. Non-union and IBEW employee contributions are as follows for each medical plan offering:
• HDHP/HSA 3%
• Select 10%
• PPO (Silver) 10%.
• PPO (Gold) 24.5% (Employees will contribute the difference between the cost to the Village of the PPO (Silver) and the current PPO (Gold) which equates to approximately 24.5% for the current PPO (Gold).
In addition, non-union and IBEW employees and their spouses who do not participate in the free biometric health screening, the employee’s monthly medical insurance premium share will be increased by 10% of the full employee only premium rate of the plan in which they participate. Negotiations with the other bargaining groups are ongoing.
Summary of Expected Annual Costs:
Medical/Rx: $ 5,834,557.47 (12.2% overall increase 10% fixed cost & claims trend 2% replenish reserves)
Dental: $ 284,224.92 (2.7% increase to administrative fees, 9.3% claims trend decrease)
Vision: $ 38,845.08 (0% fee increase)
Life and AD&D: $ 72,589.44 (0% fee increase)
FSA: $ 2,760.00 (0% fee increase, assumes 40 participants at 5.75 per employee)
STD - ASO $ 2,331.00 (0% fee increase)
Virgin Health Miles $ 27,846.00 (Current program with 20% participation growth & fee restructure 7/1/2012)
CHC Wellness $ 20,900.00 (assumes 220 participants at $95 - $10 increase per screening, and increased participation by 80 to account for the spouses of non-union and IBEW employees and increased participation)
EAP $ 19,500.00 (same as 2011)
Crisis Response $ 30,000.00 (same as 2011)
Horton Retainer $ 57,500.00 (quarterly payments of $14,375) (same as 2011)
Mr. Michael Wojcik from the Horton Group will be present at the Special Meeting of the Finance Committee on October 17, 2011 (5:30 pm) and at the Board of Trustees meeting on October 17, 2011 (7:00 pm) to explain the renewal process and answer any questions.
On October 17, 2011, this item was reviewed by the Finance Committee.
Financial Impact
The FY2012 budget will include $6,341.553.91 in the insurance fund and $49,500.00 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 and vendors and associated expenses with each effective January 1, 2012.
And
To retain the Horton Group’s services at the recommended rate for FY2012.