94-51 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.
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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
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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 _
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ELGIN, IL `r`., ce ls, s ir .Z e 3/111q41 Signed at ate Signed at / )ate
F16430