05-51 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
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January 7, 2005 G "rc rip I
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TO: Mayor and Members of the City Council N it!!
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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