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 DIFFERENCE Aetna$368, Blue Cross/ Blue Shield $470,554.00$102, United Healthcare $437,619.00$68,707.00

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

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

HEALTH INSURANCE TEAM QUESTIONS???