HEALTH INSURANCE PROGRAM Health Insurance Team Members Favorite

HEALTH INSURANCE PROGRAM

Health Insurance Team Members § Favorite City Manager § Human Resources § Finance § Contracts § Purchasing § Utility § Fire § Medical Director § Insurance Broker With support from the Employee Committee

GROUP HEALTH INSURANCE PROGRAM OVERHAUL § Contract with Insurance Broker on Flat Fee Basis § Evaluate employee clinic concept § Evaluate fully-insured vs. self-insured options § Analyze Plan Design § Promote healthy workforce through enhanced wellness programs

Fully-Insured vs. Self-Insured § Fully Insured – Underwriters set premiums anticipating profit (premiums received exceed claims paid) – Lack of control over pricing – Utilization of five (5) years claims experience – Anticipated annual increases based on current trends would continue to be in double digits § Self-Insured – City pays fixed administrative costs – City pays actual claims incurred (based upon network negotiated rates) – Dollars spent are representative of care received, without insurance company added profits – Better opportunities to mitigate costs – Stop Loss Insurance limits liability to $125, 000 per insured

Carrier Comparison – Fixed Costs Administrative & Stop Loss Insurance CARRIER TOTAL ANNUAL FIXED COSTS $368, 912. 00 DIFFERENCE Blue Cross/ Blue Shield $470, 554. 00 $102, 642. 00 United Healthcare $437, 619. 00 $68, 707. 00 Aetna

NEXT STEPS… § Implement Self-Insured Group Health Insurance Program § Begin negotiations with clinic providers § Evaluate plan designs – Analyze adding high deductible plan options § Healthcare Empowerment Training for Employees and Families § Develop Wellness Programs

RECOMMENDATION Approve Aetna Healthcare as the Plan Administrator for the City’s Self-Insured Group Health Insurance Program

HEALTH INSURANCE TEAM QUESTIONS? ? ?