Title
Employee Insurance Renewal FY2015
History
The Horton Group completed a market analysis on behalf of Village of Orland Park and has provided final recommendations for the 01/01/2015 renewal of the following benefit programs:
· Medical/RX
· Dental
· Vision
· Life and AD&D
· Flexible Spending Account (FSA)
· Employee Assistance Program (EAP)
· Crisis Response Program (Community)
· Virgin Health Miles (Wellness Initiative)
· CHC Biometric Screenings (Wellness Initiative)
Based on the final analysis provided by The Horton Group, the following carriers/vendors associated with each benefit offering effective 01/01/2015 are being recommended:
· BlueCross BlueShield of Illinois (Medical/RX)
· Delta Dental of Illinois (Dental)
· EyeMed (Vision)
· Dearborn National (Life/AD&D)
· 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)
In addition, the Horton Group is currently completing a market and service analysis for short-term disability plan administrators and programs. The Village currently utilizes Guardian who provides "advice to pay (ATP)" services. Along with evaluating plan administrators, we are also evaluating if the "advice to pay (ATP)" program model or another program model will better meet the Village's needs in administering the short-term disability benefit. An annual expense amount is provided in the chart below for budgeting purposes.
A summary of the renewal for each benefit offering is provided below.
Line of Coverage--------Annual Expense--------Renewal Impact
Medical/Rx----------------$5,085,551---------------7.6% premium decrease
Dental----------------------$290,824-----------------6.72% premium increase
Vision-----------------------$38,349------------------2.96% premium increase
Life and AD&D------------$63,088------------------0% increase
FSA--------------------------$3,000-------------------0% fee increase, projects 36 wks at 5.75 pepm, & $500 adm.
Short-Term Disability----$30,000------------------Currently reviewing ATP & ASO administrators & services.
Virgin HealthMiles---------$28,500------------------0% fee increase expense projects average enrollment of 100 employees
CHC Wellness------------$38,750------------------$20 increase per screening expense projects 310 participants
Horton Retainer-----------$50,000------------------13% decrease, quarterly payments of $12,500
EAP--------------------------$19,500------------------no change in annual cost however 12 visit annual limit per person
Crisis Response----------$30,000------------------no change
Actual budgeted amounts will be adjusted to reflect the number of employees, employee contributions and pre-allocated reserves.
As you know, the Village Medical/Rx plan is self-funded and is administered by an insurance carrier to provide the appropriate medical networks and administrative services. Proposals for the FY2015 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 the best and final offers.
BlueCross BlueShield of Illinois (BCBS) presented the most competitive proposal resulting in a decrease in total cost. The BCBS proposal accounts for expected claims, stop loss coverage, Affordable Care Act (ACA) fees and a general health insurance reserve. The proposal includes maintaining HDHP/HSA, Silver PPO, Gold PPO and HMO plan options. Slight modifications have been made to the medical plan designs in accordance with the Affordable Care Act (ACA) and collective bargaining agreements. A summary of these recommended options is attached to this agenda item for reference.
Effective 01/01/2015, the HDHP/HSA plan for non-union and IBEW employees will include a $3,250/$6,500 deductible. 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. 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 AFSCME, Deputy Chief and Commanders, Metropolitan Alliance of Police, and Police Supervisors groups will make employee contributions based on flat rates which are outlined in the collective bargaining agreements effective, May 1, 2011 through April 30, 2015. These rates include a wellness incentive rate for those employees that participate in the biometric screening.
In addition, $151,000 is included in the Insurance Fund for the employer funding of the HSA accounts for those employees enrolled in the High Deductible Plan.
Mr. Michael Wojcik from the Horton Group will be present at the Finance Committee meeting on October 6, 2014 to explain the renewal process, results, and to answer any questions.
On October 6, 2014, this item was reviewed by the Finance and Information Technology Committee and recommended for approval with a 2-0 vote having Chairman Ruzich abstain. This item is now before the Village Board of Trustees for consideration.
Financial Impact
The FY2015 budget will include $5,507,678 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. This amount reflects adjustments as referenced below the summary chart.
Recommended Action/Motion
I move to approve agreements with the recommended carriers/vendors and associated expenses effective January 1, 2015;
And
Approve to retain the Horton Group's services at the recommended rate for FY2015.