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Employee Health Insurance Renewal FY2021
History
Village brokers at the Horton Group, completed a market analysis and provided final recommendations for the January 1, 2021 renewal of Village Employee Health Insurance benefit programs to include:
• Medical/Rx/Dental/Vision
• Life and AD&D/Short Term Disability
• Flexible Spending Account (FSA)
• Employee Assistance Program (EAP)
• Virgin Health Miles/CHC Biometric Screenings (Wellness Initiatives)
• Employee Assistance Program (EAN)
• Liability
The overall plan ran well. As a result, the claims projection was favorable and when adding the fixed costs and eliminating the ACA reserve this year. In addition, Brokers sought and received $130,000 wellness credit that the Village can use in the health fund without restriction. The plans total increase is $45,610 or .91%. Other reinsurance carriers were compared, as well as another carrier UMR from United Healthcare. Brokers also compared fully insured rates to see if that would temper the market better due to unknowns of COVID-19 and the increasing high cost claimant market. End result shows fixed costs for the year 2021 will increase 15.94% due to number of large claimants (original ask was 37.87%), for a dollar amount increase of $136,538.
No change is recommended to the following carriers associated with each benefit offering, effective January 1, 2021:
• BlueCross BlueShield of Illinois (Medical/Rx)
• Delta Dental of Illinois (Dental)
• Eye Med (Vision)
• Dearborn National (Life/AD&D, STD)
• Discovery Benefits (Flexible Spending Account and COBRA Administration)
• Metropolitan Family Services (Employee Assistance Program)
• Virgin Pulse (Pedometer and Rewards Program - Wellness Initiative)
• CHC (Biometric Screenings - Wellness Initiative)
Attached is a summary of the renewal.
Highlights:
The Village Medical/Rx plan is partially self-funded and administered by an insurance carrier to provide the appropriate medical networks and administrative services. Proposals for the FY2021 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, Village brokers shopped the market to negotiate with carriers and obtain best and final offers.
BlueCross BlueShield of Illinois (BCBS) proposed options account for expected claims, stop loss coverage, Affordable Care Act (ACA) fees and a general health insurance reserve. The recommended non-union options include maintaining the current HDHP/HSA, Silver PPO, and Blue Advantage HMO. Union plans would not include Blue Advantage HMO; however, they will include the Gold PPO and HMO Illinois.
As of January 1, 2021, non-union 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 wellness screenings. The wellness discount is realized for those who participate in the biometric wellness screening (approximately $80).
Union employees in the IBEW, AFSCME, Deputy Chief and Commanders, Metropolitan Alliance of Police (MAP), and Police Supervisors groups make employee contributions based on the percentages or rates outlined in the respective collective bargaining agreements. Those that expired on April 30, 2019 are currently being negotiated, but include a wellness incentive rate (discount of approximately $80) for those employees that participate in the biometric wellness screening.
In addition, $231,000 is included in the Insurance Fund for estimated Village funding of the HSA accounts for those employees enrolled in the HDHP/HSA Plan.
Mike Wojcik from the Horton Group will be present at the Board of Trustee meeting on Monday, November 16, 2020 to explain the renewal process, results, and to answer any questions.
Financial Impact
The FY2021 budget will include the amount necessary to fully fund the various benefits listed above.
Recommended Action/Motion
I move to authorize the Village Manager to execute employee health insurance renewal agreements with the recommended carriers/vendors and associated expenses effective January 1, 2021.