Aggregate Stop Loss Insurance RenewalTHE CITY OF Dubuque
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DUB E ~''~~'
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Masterpiece on the Mississippi
2007
TO: 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 29, 2009
Personnel Manager Randy Peck is recommending approval of the renewal rates
submitted by Companion Life, effective July 1, 2009 through June 30, 2010 for specific
and aggregate stop loss insurance that will have a $90,000 specific deductible a
$2,000,000 lifetime maximum and higher deductibles for the four active large claims in
the amount of $788,794.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mi hael C. Van Milligen
MCVM:Iw
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
THE CITY OF Dubuque
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DT TR ~ All-AmerfcaClil-
LJ LJ ~
Masterpiece an 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 26, 2009
Health Choices, Inc., our health plan administrator, obtained specific and aggregate
stop loss quotes from Companion Life, our current stop loss carrier and from seven
other stop loss carriers. The other stop loss carriers are Kanawha Insurance, Medical
Excess, Nationwide Life, HCC Life, HM Life, Ace American and Lloyds of London.
Companion Life presented the most competitive quote. Their quote is $765,932 for the
existing coverages. The current premium is $484,128.
There are currently four large cases. Companion Life presented a quote that would
increase the specific stop loss amount for these four claims. The specific stop loss
amounts are as follows:
Claim #1 - $100,000
Claim #2 - $150,000
Claim #3 - $200,000
Claim #4 - $150,000
In addition, Companion Life presented quotes for higher specific deductible amounts
and higher lifetime maximum amounts.
The Health Care Committee met on June 23, 2009, to review the renewal options. The
Health Care Committee recommends that we increase the specific deductible from
$85,000 to $90,000, increase the lifetime maximum from $1,000,000 to $2,000,000 and
that we accept the higher deductibles for the four active large claims. The premium
under this arrangement would be $548,794. We would have an additional potential
liability of $240,000 related to the higher specific stop loss amounts for the four active
large claims. The total potential cost for Fiscal Year 2010 for specific and aggregate
stop loss insurance would be $788,794. The premium to fully insure all current and
future claims, with a specific deductible of $90,000 and a lifetime maximum of
$2,000,000 would be $741,293.
The requested action is for the City Council to pass a motion approving the renewal
rates submitted by Companion Life effective July 1, 2009 through June 30, 2010 for
specific and aggregate stop loss insurance that will have a $90,000 specific deductible,
a $2,000,000 lifetime maximum and higher deductibles for the four active large claims in
amounts presented in the memorandum.
Health Choices, Inc. has obtained a binder to make sure there would not be a lapse in
coverage on July 1, 2009.
RP:tlb
City of Dubuque
Companion Life Annual Cost Illustration
July 1, 2009
LaSBf' Opf/OO Current Renewal Renewal Renewal Renewal
=__ Companion Life Companion Life Companion Life Companion Life Companion Life
Single Enrollment I 131 $85,000 $85,000 $90,000 $95,000 $100,000
Family Enrollment I 402 Specific Deductible Specific Deductible Specific Deductible Specific Deductible Specific Deductible
_
F'txifd GoRta - . . ~ _ ....~; Monthly . . - I' ~'~7lrirtu ~ _ "~ Monthly I Annual "` ,. Monthly I Annual "~' Mpihthly ' ' I Annual -.~ =`° Mar>thly "" I AnntraZ _:;"'
Specific Coverage S2 million Lifetime Max 24112 Paid Paid Paid Paid
Single Premium $33.97 $53,401 $40.58 $63,792 $38.37 $60,318 $38.20 $60,050 $34.61 $54,407
Family Premium $84.86 $409,365 $101.36 $488,961 $95.85 $462,380 $95.42 $460,306 $86.46 $417,083
Aggregate Coverage S7 million Lifetime Mex
Composite Premium $3.34 $21,363 $3.64 $24,561 $4.08 $26,096 $4.21 $26,927 $4.31 $27,567
Aggregate Accommodation $0.00 $0 $0.00 $0 $0.00 $0 $0.00 $0 $O.OD $0
Terminal Liability $0.00 $0 $0.00 $0 $0.00 $0 $0.00 $0 $0.00 $0
Subtotal Stop Loss Premium $484,128.12
I $577,313.04
I 5548,793.72
I 5547,263.64
I $499,056.72
I
Total Single Fixed Cost $37.31 $44.42 $42.45 $42.41 $38.92
Total Family Fixed Cost $88.20 $105.20 $99.93 $99.63 $90.77
Total Annual Fixed Costs $484,128 $577,313 $548,794 $547,284 $499,057
Change Over Prior Year _ 19% 13% 13% 3%
~~81e Attap~ittt;nt Poitjt' A+ttihly - Anr;ua! <° MontfN `A1111t181 ~ Msu)thly I Anntaal ~ Monthly AnrttiiaF .3r Monthly Annual "=?'
Single Factor $487.05 $765,643 $538.51 $846,538 $539.17 I $847,575 $540.97 $850,405 5540.97 $850,405
Family Monthly Factor $1,156.03 $5,576,689 $1,278.18 $6,165,940 $1,279.75 I $6,173,514 $1,284.01 $6,194,064 $1,284.01 $6,194,064
Aggregate Attachment Point $6,342,331 $7,012,478 $7,021,089 $7,044,469 $7,044,469
Change Over Prior Year 11 % 11 °/ 11 % 11
Expected Attachment Point (less 25% corridor) $5,073,865 $5,609,982 $5,616,871 $5,635,575 $5,635,575
1`tsTPren Costs '
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LASER LIABILITY $260,000 $240,000 $220,000 $200,000
Maximum Liability $6,826,459 $7,849,791 $7,809,883 $7,811,753 $7,743,526
Expected Liability $5,557,993 $6,447,295 $6,405,665 $6,402,859 $6,334,632
Minimum Attachment Point $7,012,478 $7,021,089 $7,044,469 $0
Contingencies: #1 $100,000 #2 $150,000 #1 $100,000 #2 $150,000 #1 $100,000 #2 $150,000 #2 $150,000 #4 $150,000
#3 $200,000 #4 $150,000 #3 $200,000 #4 $150,000 #3 $200,000 #14 $150,000 #3 $200,000
City of Dubuque
Market Search Summary
Single Enrollment 131
I $85,000 $90,000 ~ $95,000 $100,000
Family Enrollment 402 Specific Deductible Specific Deductible Specific Deductible Specific Dedu ctible
(Carrier I Contract I Maximum I Annual Fixed Costsl Attachment Point Annual Fixed Costsl Attachment Point Annual Fixed Costs I Attachment Point Annual Fixed Costs Attachment Point
Companion Life Current I Paid I $1,000,000 I $484,128 I $6,342,331
No Laser '
Companion Life Opflon Paid I $1,000,000 I $765,932 I $7,012,476 $727,276 I $7,021,069 $724,836 I $7,044,469 $660,090 $7,044,469
NO L85er
Companion Life Option I Paid I $2,000,000 I $780,766 I $7,012,476 $741,293 I $7,021,089 $738,789 I $7,044,469 $672,744 $7,044,469
No Laser
Companion Life Opfion Peid $5,000,000 $786,701 $7,012,478 $746,907 $7,021,089 $744,354 $7,044,469 $677,812 $7,044,469
Aggregating
I
Companion Life Spec Option Paid I $1,000,000 $565,910 I $7,012,478" $527,303 $7,021,089* $524,863 I $7,044,469` $460,069 $7,044,469`
( I
Companion Life SpecOpbbn Paid - $2,000,000 $576,752 I $7,012,478` $537,342 I $7,021,089' $534,838 I $7,044,469' $468,754 $7,044,469'
(Companion Life Soec Ootbn I Paid I $5,000,000 I $581,060 I $7,012,478" $541,320 I $7,021,089` $536,816 I $7,044,469* $472,177 $7,044,469`
(Companion Life LaserOption ~ Paid I $1,000,000 I $566,456 I $7,012,478' $538,546 I $7,021,089" $537,084 I $7,044,469* $489,787 $7,044,469'
(Companion Life LaserOpfion I Paid ($2,000,000 ~ $577,313 I $7,012,478* $548,797 I $7,021,089* $547,284 I $7,044,469' $499,057 $7,044,469`
Companion Life Laser Option Paid $5,000,000 $581,611 $7,012,478' $552,683 $7,021,089` $551,373 $7,044,469* $502,713 $7,044,469'
No Laser '
Kanawha Insurance Option I 24112 $5,000,000 I $938,035 I $6,963,768 $887,671 $7,000,181 $847,629 I $7,044,375 NA NA
(Kanawha Insurance LaserOption I 24/12 ~ $5,000,000 I $603,839 I $6,963,768' $571,962 I $7,000,181' $547,581 I $7,046,367" NA NA
Firm rates not
Medical Excess submitted 24/12 $5,000,000 $550,271 $7,637,589 $520,551 $7,650,583 $493,187 $7,661,814 NA NA _
(Nationwide Life I 24/12 I $2,000,000 I $697,672 I $7,077,031 $664,057 I $7,110,743 $629,783 I $7,144,886 NA NA
HCC Life Final rates not ~ 24/12 I $1,000,000 I $697,672 I NA $758,067 ~ NA $729,574 I NA NA NA
HM Life requested ~ 15/12 ~ $1,000,000 ~ $815,887 ~ $7,152,501 NA ~ NA $727,638 I $7,259,782 NA NA
Ace American ~ 24/12 ~ $1,000,000 ~ $829,436 ~ $7,973,179 $789,565 ~ $8,052,859 $687,934 ~ $8,132,651 NA NA
Lloyds of London ~ 15/12 ~ $1,000,000 ~ $994,608 ~ $7,092,608 $945,875 ~ $7,102,183 $896,291 ~ $7,109,080 NA NA
American National Quote not received
Sun Life Declined-uncompetitive
~ UniAmerica Declined-uncompetitive
United States Fire Declined-uncompetitive
I * Note: Additional liability due to laser or aggregating specific