Title
FY2018 Employee Insurance Renewal
History
The Horton Group completed a market analysis on behalf of Village of Orland Park and has provided final recommendations for the 01/01/2018 renewal of the following benefit programs:
• Medical/RX
• Dental
• Vision
• Life and AD&D
• Short Term Disability
• Flexible Spending Account (FSA)
• Employee Assistance Program (EAP)
• 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 are being recommended effective 01/01/2018:
• BlueCross BlueShield of Illinois (Medical/RX)
• Delta Dental of Illinois (Dental)
• EyeMed (Vision)
• Dearborn National (Life/AD&D, STD)
• Discovery Benefits (Flexible Spending Account Administration)
• Metropolitan Family Services (Employee Assistance Program)
• Virgin Pulse (Pedometer and Rewards Program - Wellness Initiative)
• CHC (Biometric Screenings - Wellness Initiative)
• The Horton Group (Benefit Consultant)
Attached is a summary of the renewal for each benefit offered. Actual budgeted amounts will be adjusted to reflect the number of participants per plan, including Village and library staff as well as retirees. This summary also includes Trinity Services, the current provider of 24/7 crisis response services, for the Police Department and Village employees.
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 FY2018 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.
BlueCross BlueShield of Illinois (BCBS) presented the most competitive medical/RX proposal resulting in a slight decrease in expected plan exposure and a 2.5% increase to the premium equivalents. BCBS proposed options account for expected claims, stop loss coverage, Affordable Care Act (ACA) fees and a general health insurance reserve. The recommended option includes maintaining the current HDHP/HSA, Silver PPO, Gold PPO and HMO plans. Slight modifications may be made to the medical plan designs in accordance with the Affordable Care Act (ACA). In an effort to continue to control medical and claims exposure, the recommendation also includes adding the BlueCross BlueShield Benefits Value Advisor (BVA) and Virtual Visits programs to the PPO plans. A summary of these recommended options is attached to this agenda item for reference.
Effective 01/01/2018, the HDHP/HSA plan for all employee groups will include a $3,500/$7,000 deductible an increase from $3,250/$6,500. 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 (MAP), and Police Supervisors groups will make employee contributions based on flat rates which are outlined in the collective bargaining agreements effective, May 1, 2015 - April 30, 2019. These rates include a wellness incentive rate for those employees that participate in the biometric screening.
In addition, $205,400 is included in the Insurance Fund for Village funding of the HSA accounts (40% of the deductible) for those employees enrolled in the HDHP/HSA Plan.
The Horton Group continues to provide best in class employee benefit consulting service to the Village of Orland Park including, strategic planning and market insight and analysis, financial and benefit analytics, human resource services and employee assistance, employee benefit communications, compliance oversight, and workplace wellness. While the Horton Group’s services continue to expand, the service fee has remained flat since 2015 and is 13% less than the 2014 service fee. This long term relationship has been beneficial in stabilizing our medical plan trend through the development and implementation of consumerism, choice and wellness strategies. Staff recommends that the Village continue to retain the Horton Group’s services in FY2018. However, staff will survey the employee benefit consulting market in 2018 through an RFP or RFQ for the FY2019 renewal and 2019 services.
Mr. Michael Wojcik from the Horton Group will be present to explain the renewal process, results, and to answer any questions.
This agenda item is being sent directly to the Village Board of Trustees for approval.
Financial Impact
The FY2018 budget will include the amount necessary to fully fund the various benefits listed above.
Recommended Action/Motion
I move to approve the agreements with the recommended carriers/vendors and associated expenses effective January 1, 2018;
And
Approve retaining the Horton Group’s services at the recommended rate for FY2018.