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Home My WebLink About05-51 Resolution No. 05-51 RESOLUTION ACCEPTING THE PROPOSAL OF UNICARE HEALTH PLAN FOR THE CITY OF ELGIN'S HMO AND PPO MEDICAL INSURANCE PROGRAM AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATED THERETO BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that the City of Elgin hereby accepts the proposal of Unicare Health Plans of the Midwest for the City of Elgin's HMO and PPO medical insurance program for the period of March 1, 2005 through February 28, 2006. BE IT FURTHER RESOLVED that Olufemi Folarin,Acting City Manager,be and is hereby authorized and directed to execute all documents necessary and incident to such proposal of Unicare Health Plans of the Midwest for the City of Elgin's HMO and PPO medical insurance program. s/Ed Schock Ed Schock, Mayor Presented: February 23, 2005 Adopted: February 23, 2005 Omnibus Vote: Yeas: 6 Nays: 0 Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk OF Etc City of Elgin Agenda Item No. \-A-- 1111. E tt L ',.49 E t January 7, 2005 G "rc rip I F � I1 TO: Mayor and Members of the City Council N it!! � 1F g City g y44� FINANCIALLY STABLE CITY GOVERNMENT FROM: David M. Dorgan, Cit Manager J (Fp(IFN1 5FRVK.F., AND DUALITY INFRASTRUCTURE Gail Cohen, Purchasing and Human Resources Director SUBJECT: Group Health Insurance Program PURPOSE The purpose of this memorandum is to provide the Mayor and members of City Council with renewal information and recommendations for the City's Group Health Insurance. RECOMMENDATION It is recommended that the City Council approve the proposed one-year, fully paid HMO and PPO plans from Unicare Health Plan. BACKGROUND The City has two group health insurance plan options available for full-time, eligible part-time employees, and retirees. Currently, Group Administrators administers the PPO (Preferred Provider Organization) plan and the HMO (Health Maintenance Organization) is provided by Unicare Health Plan. The plans provided by these two carriers will expire on February 28, 2005. The PPO is self-funded; the City pays for all claims arising thereunder. Employees do not contribute to the cost of the insurance plan. PPO medical claims for employees have increased dramatically in the past few years; increasing from $2,657,059 in 2000 to $4,100,000 in 2004. Prescription drug costs have also skyrocketed. The City paid $564,161 in 2002; 2004 drug costs are expected to reach $1,030,000. Requests for proposals were prepared for distribution to the market by the City's insurance broker, Global Benefits, Inc. Quotes received by Unicare and Blue Cross Blue Shield revealed that the City would save in premiums and out-of-pocket expenses by going to a fully insured, rather than self insured plan. Under a conventional fully insured plan, the insurance company pays for claims and the City pays a premium. The proposals were reviewed and discussed by an employee group including Human Resources, Fiscal Services, Police union representatives, Fire union representatives and SEIU/Clerical Technical representatives. The Unicare HMO and PPO plans were determined to best meet the rift needs of the majority of health plan users. Health Insurance Plans January 7, 2005 Page 3 The monthly premium for the HMO plan is as follows: Single $ 252.58 $ 250.16 $ 2.42 Employee + 1 533.52 n/a n/a Family 764.06 687.95 76.11 The proposed premiums charged to the participating departments (based on the number of employees and the type of coverage chosen) as well as the employee contribution of 7.5% will pay for the HMO and PPO premiums. Unicare requires a $400,000 deposit to begin coverage on March 1. The annual PPO Plan cost (including prescription drugs) is anticipated to be $5,833,234. The annual HMO Plan cost is anticipated to be $1,634,341.92. There are sufficient funds budgeted in account numbers 635-0000-796.53-08 (Medical Claims-$4,450,000); 635-0000-796.50-04 (HMO-$1,800,000) and 630-0000-796.53-11 (Prescription Drug Plan - $1,200,000); to cover the ;projected insurance expenses. EGAL IMPACT None. ALTERNATIVES 1. Accept the proposals as recommended for coverage of all eligible, participating employees. 2. Request alternative proposals for coverage for non-bargaining unit employees. Respectfully submitted for Council consideration. GAC Attachment City of Elgin Inpatient other than Serious 80% after deductible 60%after deductible Mental Health/Substance Dependency (30 days per Calendar Year) Outpatient other than Serious 80%after deductible 60% after deductible Mental Health/Alcohol/Substance Dependency (20 visits per Calendar Year) In•atient Alcohol De•endenc 80%after deductible 60%after deductible OTHER EXPENSES Skilled Nursing with 80%after deductible 60%after deductible precertification (100 days per Calendar Year) Hospice Care 80% after deductible 60% after deductible ($10,000 Lifetime Maximum) Home Health Care with 80%after deductible 60%after deductible precertification (100 visits per Calendar Year) _ Durable Medical Equipment 80%after deductible 60%after deductible ($5,000 per Calendar Year) Ambulance Services($5,000 per 80% no deductible Calendar Year—subject to Medical Necessity) Prosthetics 80%after deductible 60% after deductible $5,000 •er Calendar Year PRESCRIPTION DRUGS AT PARTICIPATING PHARMACIES (including diabetic supplies, infertility drugs and contraceptives) Retail Card Service-30 Day Supply Mail Order Drugs-90 Day Supply Generic/Brand Formulary/Brand Non-Formulary Retail: 10/20/40 and M.O.D.: 20/40/80 Self-injectable benefit(including In-Network: 20%coinsurance up to$100 max per prescription with insulin) annual OOP max of$5,000 Out-of-Network: 50%coinsurance Out of Network Pharmacy Applicable copay plus 25%coinsurance All plans include Active Generic Substitution and Prior Authorization of Benefits Program The following expenses will not be applied toward satisfaction of the out of pocket maximum or toward benefits payable at 100%: • Calendar Year Deductible • Copayments • Outpatient Treatment of Mental Health(Other than Serious Mental Health)and/or Alcohol/Substance Dependency • Any Cost Containment Provision Penalty • Charges in excess of Reasonable and Customary elibh This summary is for illustrative purposes only and is not a legal document. The plan booklet,contract and/or Summary Plan Descriptions both now and in the future UN j CARE.j�j�EQ are legal documents you should rely on for specific information. ,j j�j j j July I t,2003—version#2