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Home My WebLink About09-20-2011 Regular MeetingSTA TE OF ALABAMA )( COUNTY OF BALDWIN )( The Financial Advisory Sub-Committee on Self-Insured met at 10:00 a.m., City Hall, Delchamps Room , 161 North Section Street, Fairhope, A labama 36532, on Tuesday, 20 September 2011. Present were: Members : Chuck Zunk, John Brown , and anc y Wilson. Lisa Hanks and Rose Fogarty were a lso present. Debbie Quinn and Mike Ford were absent. City Treasurer Nancy Wilson briefly gave an update on the results from both companies: Occidental and Blue Cross Blue Shield regarding self-insurance considerations . The City would insure the gap instead of paying for claims . Ms. Wilson also explained what we have now compared to the being partially self-insured with a stop loss policy. The comparisons were based on a $50 ,000 deductible. The recommendation will be to recommend BCBS with a stop loss policy for in s urance ; BCBS will pay large claims up front and then collect from insurance company which will not have an effect on the City's cash flow. There being no further business to come before the Financial Advisory Sub- Committee on Se lf-Insured , the meeting was duly adjourned at 10:29 a.m. Chuck Zunk, Chai qi'-8\_µ1\ -INSURANCE CONSIDERATIONS 50 single coverage 228 famil~ coverage 278 total $50 ,000/person deductible BCBSFully Insured BCBS Occidental a . Stop Loss Monthly Premium $0 .00 $32 ,500 $37 ,806 (Lloyds of London) (Optum) b Monthly Aggregate Premium Rate $0 .00 $1,365 $1 ,587 (rate x 278) ($4 .91/person) ($5 . 71 /person) C Total Annual Premium $2 ,714 ,250 $406 ,374 $472 ,716 (a+b)x12 d Minimum Annual Attachment $0 .00 $2 ,532 ,612 $2 ,436 ,079 e Administrative Fee $0.00 6 .6% 10 .0% f Average Claims (2007-2010) $2 ,373 ,708 $2 ,373 ,708 $2 ,373 ,708 g Settle-up Exposure additional 20% of claims paid 0 0 h Est. Claims Exposure (avg. of Claims under $50k 2007-2010) n/a $1 ,985 ,680 $1 ,985 ,680 total Cash Out (c+h) $2 ,714,250 $2 ,392 ,054 .$2 ,458 ,401 9/14/2011 CITY OF FAIRHOPE Reinsurance Analysis For Policy Period 10/0l/2011-9/30/2012 Coverage includes medical and rx and is based on a 12/1 2 contract basis. Estimated annualized premium is based on counts of single 50 and family 228. J,\BLE benefit solutions LLOYDS OF LONDON ($1,000,000 maximum renews each 12 month policy period) Specific Deductible Single Rate Family Rate $50 ,000 $59.06 $129 .59 $75 ,000 $42.40 $95.77 $100 ,000 $32.56 $75 .86 $125,000 $25 .62 $60 .10 Laser(s): July data required to finalize terms Composite Rate $116.90 $86 .17 $68 .07 $53 .90 Aggregate Rate $4.91 $5 .01 $5 .08 $5.12 Estimated Aggregate Annual Premium $16,380 $16 ,713 $16,947 $17,080 BCS INSURANCE COMPANY ($1,000,000 maximum renews each 12 month policy period) Estimated Aggregate Specific Deductible Single Rate Family Rate Composite Rate Aggregate Rate Annual Premium $50 ,000 $86 .61 $162.93 $149.25 $2 .94 $9,843 $75,000 $58 .83 $110.68 $101.39 $3 .73 $12,488 $100 ,000 $39 .94 $75 .12 $68 .82 $5 .25 $17 ,577 $125 ,000 $27 .78 $52 .25 $47 .86 $6 .62 $22 ,164 Laser(s): July data required to finalize terms COMPANION LIFE ($1,000,000 lifetime maximum) . Estimated Aggregate Specific Deductible Single Rate Family Rate Composite Rate Aggregate Rate Annual Premium $50 ,000 $84.47 $209 .92 $187.36 $4.10 $13 ,678 $75 ,000 $58 .79 $146 .08 $130 .38 $4 .20 -$14 ,011 $100 ,000 $42 .54 $105 .72 $94 .36 $4 .23 $14,111 $125,000 $31 .85 $79 .15 $70.64 $4.28 $14 ,278 laser(s): July data required to finalize terms ...... Estimated Specific Annual Premium $389,994 $287 ,467 $227,089 $179,806 Estimated Specific Annual Premium $499 ,689 $339,454 $230,409 $160 ,235 Estimated Specific Annual Premium $625 ,026 $434 ,950 $314 ,770 $235 ,666 Estimated Annual Total Premium $406 ,374 $304 ,180 $244 ,036 $196 ,886 Estimated Annual Total Premium $509 ,532 $351 ,942 $247 ,986 Cf182 ,3_99_::) Estimated Annual Total Premium $638,704 $448 ,961 $328 ,881 $249 ,944 P age 1 of 1 Nancy Wilson rom: Will Lyles [willlyles@bcbsal.org] Sent: Friday , August 26 , 2011 3:25 PM To : Nancy Wilson Subject: Re insu rance Question Hey Nancy , Good afternoon. In our meeting last week, Rose asked me over the last 5 years , how many enrollees had claims during one year that went over $100 ,000 . Here are the results . 10-1-2010 to present 10-1-2009 to 9-31-2010 10-1-2008 to 9-31-2009 10-1-2007 to 9-31-2008 10-1-2006 to 9-31-2007 2 members 1 member 2 members 1 member 1 member If you need anything else, please don 't hesitate to call. Thanks , Ly les, CHC ar eting Re present ati ve BC B S of Al a bama w illl y les@ bcbsal.o rg 25 1-94 3 -9222 ***CONFI D ENTIALITY N OTICE*** This e-mail is intended for th e sol e u se of the indi v idual (s) to w h om it is addressed , and may cont ai n in fo rmati o n th at is pri vil eged , con fi denti a l and e xempt fro m di sclo s ure und er appli cabl e law . You ar e he re by notified that any di sseminat ion , dupli cation, or di stributio n of thi s tran s mi ssio n by so me one other than the intend e d addressee o r its d es ig nat ed a gent is stri ctl y prohibited . If yo u rece ive thi s e-ma il in e rror , pl ease noti fy m e immedi at e ly by re pl yi ng to th is e-ma il. 8/26 /2011 City of Fairhope Self-Funded Administration Cost Analysis . .. . . .. . . ... . . ... ... .. .. . . . . . . . . . .. . . . .. . . . . .. ...... . ........... . . .................... •·•·· ........... . . ................. . . . . ... ... .. ... . . . .. . ..... .. ... .. . ........ . ... ... ... .. .. .. . .. ... ... ... .. . . .. ..... . .. . .. ... .... ..... .. .. . .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' . . . . . . . . .... '. .. . . . . ............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ... . ...... .. . . .. ... .. . . .. . Specific Stop Loss Deductible Contract Type Specific Premium Single Family 278 Composite Monthly Specific Premium Annual Specific Premium Aggregate Premium Per Employee per Month $50,000 12/12 $59.67 I / I $152 .73 $37,433.70 $449,204.40 $5.71 $50,000 $50,000 $50,000 12/12 12/12 12/12 $67.74 $79.26 $70.07 $164.47 $159.68 $149.39 $40,499.24 $40,048.36 $37 ,247.14 $485,990.88 $480,580 .32 $446,965.68 $5.62 $6.12 $6.42 278 Annual Aggregate Premium / $19,048.56 $18,748.32 $20,416 .32 $21,417.12 Aggregate Factors (Includes) Contract Type 12/12 12/12 12/12 12/12 54 Single $346.99 $350.49 $351.30 $349.89 224 Family $822.63 $830.94 $843.02 $840 .86 Est. Aggregate Attachment Point (125%) ✓ $2 ,436,078.96 $2 ,460,684.24 $2,493,680.16 $2,486 ,960.40 Expected Claims (100%) $1,948,863 .17 $1,968,547.39 $1,994 ,944.13 $1 ,989,568.32 ::::::::::::::::::::::::::::t~~uf ~~@@~~~:M~i~~¥.:t~~~:(~t#t ::::::::::::::::::::::::::::::::: ::::;:::::::#.)~1;~}1;9:~:::::::1 ::::: :::::::::;:J#i~5.;i~14:::::::::::::· ::::::;::}iiM;~tf~~::::::::::::i:::::::::~~;~?.~~3~f z.i :::::::::: :::::::::::::;::::::::::::::r.~1~:i\~@aii~~~:~;ipe~tM:¢.~i@::(~t §::::::::::::::::::::::::::::::::::1:::::::::::J1~~1.7;#~~1~::::::::::::: :::::::::j:j}i~47:j;ijf~9-::::::::::::i::::::::::#~495:;?~?11:::::::::;:: j::::::::~~;1t\~~i~11::::::::::: 1te : Rates are rounded to the third decimal place and all other figures 10 the second decimal place. This accounts for any small discrepancy in cost calculations . :tual rates and contract provisions will be determined by the specific carrier after completion of undenvriting . City of Fairhope Self-Funded v Fully Insured Rate Comparisons at $50,000 Stop Loss Premium Single Family Aggregate Factors Single Family Administration @ 10% Aggregate Premium Total Premium Single - Family- Monthly Premium Annual Premium Max Premium Expected Difference Renewal Fully Insured $378.94 $952.81 $378.94 $952.81 $233,892.20 $2,806,706.40 $3,143,511.17 Optum Self Insured Net Expected @$SOK $59.67 'f-60 ;; 2, q r1 .6D $152 .73 1'-2.21:. yf 'l il 1.p./ ~ $277.59 $658.10 $42 .00 $384.97 $858.54 $213,101.34 $2,557,216 .08 $249,490.32 J~<o()@ ,, / 9 zvi, s-o I l 9tfl 71/1,/2- City of Fairhope Paid Claims Report 2007 / 2008 2008 / 2009 2009 / 2010 2010 / 2011 Paid Claims Paid Claims Paid Claims Paid Claims October $174,168.15 $145,623.52 $55,279.37 $179,213.88 November $245,682.84 $253,219.16 $267,331.60 $192,064.22 December $181,750.40 $62,826.10 $258,807.19 $225,357.38 January $141,188.05 $200,499.26 $183,618.62 $150,168.75 February $211,807.48 $226,208.24 $164,785.59 $120,321.45 March $143,679.44 $459,493.18 $134,457.25 $410,178.04 April $219,899 .03 $61,779.06 $206,852.75 $234,902.94 May $135,544.43 $205,067.44 $296,216.82 $144,030.61 June $249,734.34 $316,005.23 $153,658.52 $207,124.67 July $116,313.46 $454,669.33 $183,157.36 $189,555.36 August $167,948.76 $201,382.11 $236 ,673.61 September $40,707.47 $137,028.63 $228,059.84 Total $2,028,423.85 $2,723,801.26 $2,368,898.52 $2,052,917.30 Large Claims over $SOK $214,574 .00 $572,182 .00 $377,327 .00 $356,592 .00 2 claims 5 claims 6 claims 5 claims Average Enrollment 274 279 266 277 Actual Actual Actual Actual Monthly Average minus $151,154 .1 5 $179,301 .61 $165,964 .29 $169 ,632 .53 large claims Average Claim Per $551.66 $642.66 $623.93 $612.39 Month / Per EE I I Blue Cross Rates 2007 / 2008 2008 / 2009 2009 / 2010 2010/2011 Employee $366 .94 $366 .94 $354 .94 $378 .94 ♦ Family $922.81 $922.81 $892.81 $952.81