97-60 .
. 4.
Resolution No. 97-60
RESOLUTION
AUTHORIZING RENEWAL OF GROUP HEALTH INSURANCE
WITH TRUSTMARK INSURANCE COMPANY
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Robert O. Malm, Interim City Manager, be and is
hereby authorized and directed to renew the City' s stop loss
(excess coverage) for its group health insurance with
Trustmark Insurance Company pursuant to the summary of the
Trustmark Insurance Company renewal proposal, a copy of which
is attached hereto and made a part hereof by reference.
s/ Kevin Kelly
Kevin Kelly, Mayor
Presented: February 26 , 1997
Adopted: February 26 , 1997
Omnibus Vote: Yeas 6 Nays 0
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
(Attachment #1)
City of Elgin
. ....Quotes Secured
--- -- - ._ Revised - —- --- - --
81 Singles
464 Total
•
Life and AD&D Volume$15,451,000 •
Aggregate Aggregate Premium Premium PPOIPrecert• Admin . Total Max Life/AD&D Annual •
Company Specific _ Factors Attach Specific 'Aggregate: Premium Fees ;Fixed Costs: Cost ; Rate Life Prem
Trustmark-Pres $23.41 $432.21 $1.80 $930,344 $90,024 $3.05 $8.00- $201,944j $2,608,449i$.23/1000 $42,648
15112$100,000 • $23.41. $432.21 $2,406,505 $16,982 $44,598 i
Trustmark-Re - • $24.81 $432.21 $1.80 $138,144• $.10,020 $3.05 $8.00 $209,7441-.- $2,616,249:$2311000 $42,648
15/12 $100,000 $24.81 $43221* $2,406,505 - --- $16,982' $44,598^
F(OF F<
`
412./1' City of Elgin Agenda Item No.
�RaIf D FF-�
February 6 , 1997
TO: Mayor and Members of the City Council
FROM: Robert O. Malm, Interim City Manager
SUBJECT: Group Health Insurance Renewal
PURPOSE
The purpose of this memorandum is to provide the Mayor and
Members of the City Council with information to consider
renewal of the City' s Health Maintenance Organization (HMO)
and Self Insurance Plans .
BACKGROUND
rft. The City has two group health insurance plan options avail-
able for all full-time employees . A fully self insured
indemnity plan and an HMO plan through HMO Illinois (Blue
Cross Blue Shield) . Specific and Aggregate Insurance are
provided for the Self Insurance plan by Trustmark Insurance
Company.
Bid specifications were sent out by our broker, Robert L.
Schmidtke and Associates, to seventeen carriers for the
stop-loss (excess insurance) coverage and to six HMO provid-
ers . After reviewing submitted quotes (attachment 1) , it was
recommended that it will be in the City' s best interest to
renew with our current carriers for the 1997/98 year. A
letter (attachment 2) from Blue Cross/Blue Shield indicating
that they can not compete with our current rate for excess
coverage and administrative cost is attached for your informa-
tion.
Our overall premium increase for the HMO plan will be 5% and
the Specific Stop Loss renewal increase will be 5 . 9% . The
increase in the specific premium is due to the fact that we
had a claim that exceeded our $100, 000 specific attachment
point and four that were over 50% of the attachment point in
1996/97 . Administration and Preferred Provider Organization
cost will remain the same as in 1996/97 .
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None.
FINANCIAL IMPACT
HMO Illinois rate will increase 5% from:
1996/97 to 1997/98 Difference
Single $149 . 24 $156 . 70 $ 7 . 46
Family 396 . 73 416 .57 19 . 84
Total Annual $660,089 $693,093 $ 33,004
Self Insured Plan Changes will be as follows with the only
change being in the Specific Stop Loss Premium:
1996/97 to 1997/98 Difference
Administration $ 44,598 $ 44,598 0
Preferred Provider
Organization 16,982 16,982 0
Aggregate Stop Loss
Premium 10,020 10, 020 0
Specific Stop Loss
Premium 130, 344 138, 144 7, 800
Total Fixed Cost $ 201,944 $ 209,744 $ 7,800
Sufficient funds have been budgeted in the Medical Insurance
Fund (#635-0000-796-05-04 HMO and #635-0000-796-53-08 Health)
47)to cover anticipated insurance expenses .
LEGAL IMPACT
None.
ALTERNATIVES
None.
RECOMMENDATION
it is recommended that the City renew its HMO Plan with HMO
Illinois and our excess coverage with Trustmark Insurance
Company.
Respectfully submitted,
Olufemi ' •'lari
Re- :urces irector
1✓r f►
•o•ert •.. Malm
In erim City Manager
OF/vls
elk ROBERT L. SCHMITKE & ASSOCIATES
175 Olde Half Day Road
Lincolnshire, Illinois 60069
(847) 634-2480
January 2, 1997 (847) 634-1869 Fax
Mr. Olufcmi Folarin
Human Resources Director
City of Elgin
150 Dexter Court
Elgin,II. 60120
Re:Renewal Stop Loss/HMO
Dear Femi:
• Stop Loss Renewal
Based on competitive bidding,Trustmark Insurance Company represented the lowest maximum
cost of those carriers solicited for bids. Trustmarks renewal represents an increase in maximum
annual cost of less than 1%over the prior year. Based on these facts we would recommend
accepting the Trustmark renewal.
• HMO Renewal
Based on competitive bidding, HMO Illinois(Blue Cross)represented the lowest cost of HMO's
solicited for bids. The final rates represented an increase of 5%. Therefore we would
recommend accepting their renewal at this time.
Please let me know if you wish to discuss these recommendations further.
Sincerely,
QC�
Robert L. Schmitke
RLS/ms
kZ Employee Benefit Specialists
(Attachment #1)
City of Elgin __
Quotes Secured
------ ____ _._ . .__. . ___. --- - -- 'Revised - — --- - - --
81 Singles
363 Family
. : ........
464 Total •
Life and AD&D Volume$15,451,000 •
Aggregate Aggregate • Premium Premium PPOfPrecert Admin . Total Max 'Life/ADM) Annual
Company • Specific • Factors Attach Specific 'Aggregate: Premium Fees ;Fixed Costs- Cost :- Rate Life Prem
Trustmark-Pres ----$23.41;- $432.21•_ - $1.80 30 34
$1 , 4 $10,020 $3.05 $8.00: $201, 0 00
9441 $2,608,4491$.2311 $42,646
15112$100,000 $23.41: $432.21 $2,406,505 • $16,982 $44,598•
Trustmark-Ren • $24.81 $432.21 $1.80 $138,144 $10,020 $3.05 $8.00 $209,7441 $2,616,249:$2311000 $42,648•
15112 $100.000 $24.81 $43221 $2,406,505 - . $16,982: $44,598
061 Life ••------- $18.23 $501.40- $2:601$141,7861 -$15,007 $3.051 $8700: $218,293; $3,010,088 No Quote- - -
15/12$100,000----• - $27.40 _.$501_40- $2,791,7951 • .------ ----- •- - $10,982] $44,598
. .. . .. ------_.. _.. —,... . - ._-- .... ... .._ ---• .
Pan Am . - ^.. $26.24 $242.82 $3.42 $261,786 $19,740 $3.05: $8.00'_- $343,106 •$3,270,958._• • .No Quote
15112$100,000 $51.41, $585.69 $2,927,8521 __.. - $16,982: $44,598. •
Trans General $9.921 $223.82 $2.911 $122,700: $16,2001 $3.05 $8.00; $200,4801 $2,989,727;$25!1000 $46,350
15112$100,000 $24.60 $559.55, $2,789,247! --- - '
$16,982 $44,598 -
Boston Mutual I $22.50 $456,251 $1.79 $125,2801 $9,967• $3.05' $8.001 $196,838' $2,737,238'$27!1000 $50,064
15112$100,000 $22.50 $456.25 $2,540,4001 1 • $16,9821 $44,598r
--•--
Mutual of Omaha; $31.691 $470.001 $2.871$176,448: $15,984; $3.051 - $8.001 $254,0121 $2,870,972 $2511000 $46,356
15112$100,000 $31.691 $470.001 $2,616,960 j $16,9021 544,5981 !
INA , $27.21 $486.911 _ $151,505 $13,3631 $3.05 $8.001 $221,448 $3,030,527 No Quote
15112$100,000 ' $2721 f $486.91 $2,808,079 $16,982 $44,5381 1
Ca/lade Life $23.41 $258.27 $1.62' $130,320: $9,0211 $3.05 $8.00' $200,921' $3,055,19fi $.23!1000 $42,648
15/12 $100,000 23 41 $566.37 $2,854,875j I 1 $16,9021 $44,598 I
•
y
J J 1
age 1 of 1
Blue Crofts li ueShieki Au Inde entlrnt Licensee of the
`a J of Illinois
Blue Crtm and(Ulu•Shield.4•..s elation (Attachment #2)
1415 wet122t d Slrrvl
(Ads amok,lttie,ais 00121-41220
Tekph ine.030-5M -0500
FAX 030-5A4-0000
/emery 16, 1997
Bob Scbmidtke
Robert Schnudtke&Associates
175 Old Half Day Road
Lincolnshire. Illinois 60469
RE: City of Elgin
Dear Bob:
After a thorough review by our underwriters of your proposal request for the City of
Elgin,we regrettably will be unable to provide you with a proposal. Our intention was to
provide you with a PPO program representing 100%in-network and 80%out-of-network
hospital benefit levels. The resulting underwriting analysis was an uncompetitive proposal
as compared to their current aggregate claims liability, specific and aggregate premiums
and administrative costs.
We certainly appreciate your submission of the proposal request to us. Additionally,we
appreciate the opportunity to continue to provide HMO coverage to the employees of the
City of Elgin.
If you have any questions,please contact Ernesto Aguilar orruyscclf
in • - -
‘101101.1
Fig
r Steven ' .
Accoun imager
I k ett1,Care sir,,,,•Corporidinit x Mtana,1,eittl Antre-te Compa,►
(131 r 1;KA..ADO Milt. 5h1CIA of ttt"iuui:)
- ROBERT L. SCHMITKE & ASSOCIATES
175 Olde Half Day Road
Lincolnshire, Illinois 60069
(847) 634-2480
January 2, 1997 (847) 634-1869 Fax
Mr. Olufcmi Polarin
Human Resources Director
City of Elgin
150 Dexter Court
Elgin,TI. 60120
Re: Renewal Stop Loss/HMO
Dear Femi:
• Stop Loss Renewal
Based on competitive bidding,'I'rustmark Insurance Company represented the lowest maximum
cost of those carriers solicited for bids. Trustmarks renewal represents an increase in maximum
annual cost of less than 1%over the prior year. Based an these facts we would recommend
accepting the Trustmark renewal.
• HMO Renewal 41)
Based on competitive bidding, HMO Illinois(Blue Cross) represented the lowest cost of H MO's
solicited for bids. The final rates represented an increase of 5%. Therefore we would
recommend accepting their renewal at this time.
Please let me know if you wish to discuss these recommendations further.
Sincerely,
Robert L. Schmitkc
RLS/ms
Employee Benefit Specialists