Companion Life_Aggregate Stop Loss InsuranceTO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Specific and Aggregate Stop Loss Insurance Renewal -Health and
Prescription Drug Plans
DATE: June 11, 2008
Personnel Manager Randy Peck and the Health Care Committee recommend
acceptance of the health insurance stop loss quote from Companion Life in the amount
of $463,734. This is $919 less than the City's current rate and $124,863 less than the
next lowest quote, which is from the current provider, HCC Life.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
/,
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
THE CITY OF Dubuque
DUB E ~~~~~
Masterpiece Qn the Mississippi
2007
TO: Michael C. Van Milligen, City Manager
FROM: Randy Peck, Personnel Manager
SUBJECT: Specific and Aggregate Stop Loss Insurance Renewal -Health and
Prescription Drug Plans
DATE: June 11, 2008
Health Choices, Inc., our health plan administrator, obtained specific and aggregate
stop loss quotes from HCC Life Insurance Company, our current stop loss carrier, and
from three other stop loss carriers.
The following is a summary of the quotes:
• HCC Life (current rate) - $464,653
• HCC Life (renewal rate) - $588,597
• Companion Life (provided through Summit Re) - $463,734
• American National - $743,654
• MRM/Zurich - $752,256
Sun Life was asked to provide a quote, but declined. Companion Life (through Summit
Re) presented the most competitive quote. Their quote is $463,734, which is $919 less
than the current premium. All of the quotes were based on a specific stop loss amount
of $85,000, which is our current specific stop loss amount.
The only potential draw back with changing the insurance carrier is that any claim
incurred prior to July 1, 2007, but not reported to our carrier for payment on or after July
1, 2008, would not be eligible for stop loss protection. Karen Hoffman, Director of
Operations for Health Choices, Inc., has assured me that the likelihood of any claim
incurred prior to July 1, 2007, but not submitted prior to July 1, 2008, is minimal. In
addition, based on the language of our Plan Document, any claim that is more than
twelve months old would not be eligible for payment.
The Health Care Committee recommends that we accept the proposal submitted by
Companion Life (through Summit Re). They also recommend that we maintain the
specific stop loss amount at $85,000. Sufficient funds are available in the health
insurance reserve to finance this recommendation. Coverage would go in effect on July
1, 2008.
The requested action is for the City Council to pass a motion approving the renewal
rates submitted by Companion Life (through Summit Re) effective July 1, 2008, for
specific and aggregate stop loss insurance for the City's health and prescription drug
plan, as recommended by the Health Care Committee.
RP:tlb
cc: Health Care Committee
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Issuing Carrier Companion Life
Group City of Dubuque Proposal. No 7370
QUOTE ASSUMPTIONS AND CONTINGENCIES
Alt proposals are tentative and are based upon the information provided in the request for proposal (RFP). Proposal terms will
be revised if information received subsequent to the issuance of the proposal, including any required disclosure statement, is
materially different from the information furnished in the RFP.
Receipt and acceptance of the disclosure statement can not be made more than 30 days prior to the effective date unless
agreed upon in writing by Summit Reinsurance Services, Inc.
In order for a proposal to be considered sold, the application and deposit check must be submitted by the 15th of the month in
which the case is effective and all outstanding requirements must be received and accepted within 31 days of the effective dale.
A copy of the benefit booklet or description as distributed to plan participants is required; a copy of the signed Plan Document
and amendments must be received within 60 days of the effective date. No policy will be issued until the Plan Document has
been received, reviewed and approved by Summit Reinsurance Services, Inc. Any reimbursement for Specific and Aggregate
claims will be pended until the above stated Plan Document requirements have been met.
This quote is based upon Health Choices administering all claims.
This quote assumes pre-admission certification and utilization review are included.
The policyholder's agent must be properly licensed in the state where the stop loss policy is domiciled.
Full disclosure of COBRA participants, individuals currently disabled and retirees must be made.
The actively at work provision has been waived.
Quote assumes policyholder will access the following Provider Network(s):Medical Associates Health Plan
Quote is based on the proposed benefits as outlined in the RFP.
Quote is tentative and subject to change based on updated monthly paid claims and enrollment for 3/1/2008 through 5/31/2008.
Quote is tentative and subject to change based on updated Large Claim Information for the following periods of time: 3/1/2008 -
5/31/2008. Large claim information should include, but not be limited to: Member ID, Diagnosis, Prognosis,, Amount
Paid/Pended, Age and Gender.
Quote is tentative and subject to change based upon updated claim information on the following individuals:
Any individual with claims in excess of 50% of the specific deductible or who is expected to have claims in excess of 50% of the
specific deductible.
Claim Information may include, but not be limited to: Amount Paid/Pended to date, prognosis, APS, case management notes
and current status (i.e. deceased, terminated coverage, disabled, etc.)
This quote may be revised if the enrollment varies by more than 5%.
Minimum 75% participation of eligible employees is required.
Minimum Annual Attachment Point will be 100% of the Annual Attachment Point as stated in the proposal.
Run-in claims on the aggregate accumulate to a maximum of 15% of the annual aggregate attachment point.
Run-in limit on the specific is equal to the specific deductible level.
Quote assumes that retirees > age 65 have Medicare as their primary carrier.
05/1212008 3:30:16 pm Page 2
a
Issuing Carrier Companion Life
Group City of Dubuque
Proposal No 7370
Initial the selected proposal option: Option 1 Option 2 Option 3 Option 4
Specific
Aggregate
The Premium and Aggregate Deductible are based on the data submitted. Any inaccurate or incomplete data submitted
may require changes at final underwriting. We will not be bound by any typographical errors or omissions contained herein.
Date:
By:
Agent of Record or Administrator
This proposal expires if applications are not requested before the valid through date.
05/12/2008 3:30:16 pm Page 3