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Home My WebLink About94-51 Resolution No. 94-51 RESOLUTION AUTHORIZING EXECUTION OF AN AGREEMENT WITH WASHINGTON NATIONAL INSURANCE COMPANY BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Robert 0. Malm, Interim City Manager, be and is hereby authorized and directed to execute a Supplement to Master Application for Group Insurance on behalf of the City of Elgin with Washington National Insurance Company for an employee health insurance program, a copy of which is attached hereto and made a part hereof by reference. s/ Robert Gilliam Robert Gilliam, Mayor Pro Tem Presented: February 23, 1994 Adopted: February 23, 1994 Vote: Yeas 5 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk E- 111 °�Er°-y A enda Item No. 9 e �°'��rr o F�°� t February 10, 1994 TO: Mayor and Members of the City Council FROM: Robert Malm, Interim City Manager SUBJECT: Renewal of Group Medical and Life Insurance PURPOSE: This is to request that the Council authorize the City Manager to sign contracts renewing the City's Group Life and Health Insurance Plan with Washington National and HMO Illinois. emk BACKGROUND: The City has two group health insurance programs. The modi- fied minimum premium (self-funding) plan is through Washington National. Washington National is paid premium for aggregate insurance, Life insurance, fiduciary services and claims administration by Syncor. The HMO option is through HMO Illinois, a Blue Cross HMO. Quotes were solicited on the minimum premium plan and the HMO. We received quotes from twelve ( 12) carriers on the minimum premium plan and two (2) HMO quotes. The renewal rates that resulted from our negotiations with both Washington National and HMO Illinois were better than quotes submitted by compet- ing bidders. The rate increases asked for by Washington National (minimum premium premium rates) and HMO Illinois were negotiated down to 5.8% and 4% respectively. Our PPO savings of $158,447 helped reduce the full impact of our high claim experience in 1993. FINANCIAL IMPACT: The rate increase and the adjustment in our liability factor for 1994 will increase the monthly composite rate for the Washington National plan from: 1) $356 .27 to $391.20 for the E-5 Class (238 partici- pants) Mayor and Members of the City Council February 18, 1994 Page 2 2) $371. 07 to $407 .48 for the B-2 Class (77 partici- pants) 3) $436 .33 to $479 .29 for the C-3 Class (81 partici- pants . Tie HMO rate will go up from $158.22 to $164 .55 for single coverage and $385 .00 to $400.40 for family coverage. Employ- ees covered under HMO will contribute the difference between their HMO rate and the composite rate for the minimum premium plan. Currently there are 105 participants in HMO. LEGAL IMPACT: None. RECOMMENDATION: It is recommended that the Council authorize the City Manager to sign the contracts necessary to renew these insurance plans for the 1994/1995 year. 4 R b rt O. Mal , Interim City Manager ROM:daw r APPENDIX I TO MINIMUM PREMIUM AGREEMENT SCHEDULE OF RATES, FACTORS AND FUNDING TERMS CONTRACTHOLDER: CITY OF ELGIN POLICY NUMBER(S) : EB640083 POLICY YEAR: For purposes of this Appendix, the policy year will be from November 1, 1993 to November 1. 1994. INDIVIDUAL CLAIM POOLING: X Is not included Is included Effective the maximum amount per covered person is $ Individual Claim Pooling is accumulated per Policy Year and applies to Medical coverage. POST TERMINATION LIABILITY: Reserves are held by: Washington National; or X Contractholder; If reserves are held by the Contractholder, X Post Term Liability Limit does not apply. Post Term Liability Limit applies for a maximum period of days after the termination date of the policy. COVERAGES for which the Contractholder is assuming liability under the Minimum Premium Agreement are: Medical COVERAGES which are to be combined for Policy Year experience accounting are: None. CLAIM LIABILITY LIMIT: Cumulative Monthly Basis. (This appendix must be signed and dated on the reverse. ) • WASHINGTON NATIONAL INSURANCE COMPANY - Evanston, Illinois 60201 F16i28A MINIMUM PREMIUM PREMIUM GUARANTEE: Will not be effective for this policy year. X Will be effective for this policy year. If the Minimum Premium guarantee is effective for this policy year, Washington National will guarantee that the policy year Minimum Premium retention and pooling charges will equal the Minimum Premium Premium generated by the premium rates and the enrollment during the policy year, except where new legislation affecting expenses becomes effective during the policy year, or where existing legislation is interpreted by a governmental or administrative body in a manner which affects expenses. SCHEDULE OF RATES AND FACTORS Monthly Monthly Post Termination Covered Employee/ Premium Liability Liability Limit Dependent Units Rates Limit Factors Factors Class B-2 Employee & Dependent(s) $28.90 $378.58 N/A Class C-3 Employee & Dependent(s) $34.01 $445.26 N/A Class E-5 Employee & Dependent(s) $27.76 $363 .44 N/A This Appendix I will be effective from March 1, 1994 to March 1, 1995 , and replaces any Appendix I for prior periods. F- C. tra tholder: For Washington National: s (Signature) M (Si n r ) ` 0 ' ," ` � Ois �aAI 9 Vl�f rresfcdenf (Name and Title) (Name abd Title ) Elgin, IL 104•1 L,i,cdlASh ir-c� 17— 3/if 7141 (Place) (Date) (Place) (Date) .•- • MINIMUM PREMIUM AGREEMENT AGGREGATE POOLING AMENDMENT Washington National Insurance Company and the City of Elgin (Contractholder) agree that, in consideration of payment by the Contractholder of an additional premium charge, the Contractholder's liability shall be limited as described below under the Minimum Premium Agreement between Washington National and the Contractholder. If at the end of the contract year, the Contractholger .has paid all amounts due under the Agreement, has paid all premiums due including any retrospective premiums due, and the benefit payments made by the Contractholder through the Bank exceed the Claim Liability Limit then the amount of this excess after being reduced by any surplus from experience rated coverages shall not be carried forward to subsequent contract years as a deficit. This Amendment shall not apply to any deficits created by expenses or experience under experience rated coverages. This Amendment shall supersede any terms of the Minimum Premium Agreement between Washington National and the Contractholder which are inconsistent with the Minimum Premium Agreement. THIS AMENDMENT WILL BE EFFECTIVE FROM Noverter 1 , 1993 to NDvelter 1, 1994. TRA OLDER WASHINGTON NATI, AL INSURANCE COMPANY _ 4 3, /-7 By I.At _—... ,mOggr ig •ture OF l '"'gnature zrAelo 4 K/( Thte • ViL ' fres1de,p 1' Title Title ELGIN, IL `r`., ce ls, s ir .Z e 3/111q41 Signed at ate Signed at / )ate F16430