The URL can be used to link to this page

Home My WebLink AboutR-2006-160 Avmed Renewal 2006 RESOLUTION NO. 2006-160 A RESOLUTION OF THE CITY OF DANIA BEACH, FLORIDA, AUTHORIZING THE PROPER CITY OFFICIALS TO RENEW AN AGREEMENT WITH AVMED HEALTH PLANS TO PROVIDE A SELF- FUNDED OPEN ACCESS POINT OF SERVICE ("POS") PLAN TO ELIGIBLE EMPLOYEES, RETIREES OR BOTH; PROVIDING FOR CONFLICTS; FURTHER, PROVIDING FOR AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA: Section 1. That the proper City officials are authorized to execute documents pertaining to the renewal of the AvMed Health Plan, a self-funded open access POS plan afforded to eligible employees, retirees or both, which program shall be inclusive of third party administrative services, network access services, utilization review services, organ transplant services through LifeTrac, and disease management, at a cost not to exceed $45.09 such per employees, retirees or both; reinsurance underwritten by Combined Insurance Company to include specific reinsurance, not to exceed $58.60 per eligible employee, retiree or both per month and $122.65 per family per month (specific medical and prescription deductible of $75,000.00); Aggregate Reinsurance in an amount not to exceed $9.65 per eligible, employee, retiree or both per month; and an annual underwriting fee not to exceed $2.00 per month per such employees, retirees or both. Section 2. That employee premium contributions will be negotiated consistent with the applicable bargaining agreements. Section 3. That all resolutions or parts of resolutions in conflict with this Resolution are repealed to the extent of such conflict. Section 4. That this Resolution shall be in force and take effect immediately upon its passage and adoption. PASSED AND ADOPTED on September 26, 2006. PATRICIA FLURY MAYOR-COMMISSIONER ATTEST: LA, Ra LOUISE STILSON, CMC CITY CLERK APPROVED AS TO FORM CORRECTNESS BY: � THOMAS J./AgSrO CITY ATTORNE • • 2 RESOLUTION#2006-160 '� 4 �, CITY OF DANIA BEACH Agenda Item # 74, -A Agenda Request Item Date of Commission Meeting: 9/26/2006 Adopt Resolution ® Adopt Ordinance (1st Reading) ❑ Adopt Ordinance (2nd Reading) ❑ Award Bid/RFP ❑ Presentation ❑ Continued from: Requested:Action` -(Identity appropriate Action o Motion); Adopt resolution Wh 'Action is Necessa Y ry f Renew Avmed health care contract and subsequent reinsurance contract with Combined. Avmed's administrative cost to increase was capped at 5% as a result of our RFP process last year, (approximately $5134 annually) Our reinsurance premiums have increased by 7% (approx $15,349) hatAction Accomplishes Continued coverage ,Purchasing:Requests ONLY Dept: Acct#: Amt: Fund: General: ❑ Water: ❑ Sewer: ❑ Stormwater: ❑ Grants: ❑ Capital: ❑ Summa E r ry- xplana� ton/Backgrountl see attachments for recommendations Fiscal Impact/Cost Summary, z Exhibits Attached Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 5 Exhibit 6 Exhibit 7 Exhibit 8 Authorized:Signatures Submitted by Date Department Director Date HR Director Mary McDonald Date 09/19/06 Finance Director Patricia Varney Date 09/19/06 City Attorney Thomas J. Ansbro Date 09/19/06 City Manager Ivan Pato Date 09/19/06 K City Clerk Use Commission Action: Approved: ❑ Denied: ❑ Continued to: ❑ r t F TIDE RHODES INSURANCE GROUP 1263 East Las Olas Boulevard Suite 205 Fort Lauderdale, Florida 33301 Telephone 954-524-5075 Fax 954-525-1248 September 18, 2006 Ms. Mary McDonald Director, Human Resources & Risk Management City of Dania Beach 100 W. Dania Beach Boulevard Dania Beach, FL 33004 Re: City of Dania Beach Self-funded Health Plan Administration and Reinsurance Renewals—October 1, 2006 • Dear Mary, We have completed our negotiations with AvMed, the City's administrator for the self funded health plan, and Combined Insurance Company,the plans reinsurance carrier. As you are aware this is the first annual renewal since the plans were implemented as the result of an RFP process conducted in 2004. As part of the initial RFP negotiations with AvMed,they agreed to an annual renewal of no more than 5%per year for the first three years. The services provided by AvMed have met and exceeded the City's expectations from the stand point of lower claim costs, member satisfaction and customer service. Since inception of this agreement, AvMed has continued to invest internally in their ability to service members and manage health care costs. Some of these enhancements are outlined below: c AvMed has expanded its provider network, making it easier for members to see a specialist. c AvMed has expanded online decision support tools such as Healthwise, AvMed Rx Advisor, Hospital Selector, AvMed Healthcare Advisor, and a full menu of Alternative and Complementary Medicine Programs. o AvMed has expanded to 10 care management programs in areas ranging from asthma to congestive heart failure to oncology. o AvMed has added IHCIS Impact Suite, which includes predictive modeling tools, measurement, reporting and analysis for employer groups. o Through Amisys Advance, AvMed has made technological upgrades to its ® systems related to member records, enrollments, billing and claims payment. In 1 of 2 just one year, our inventory of backlogged claims processing has dropped from 6 days to 2.9 days through new efficiencies that have been implemented An analysis of the fee increase is attached for your review. The current fee is $42.94 per subscriber per month and the proposed fee is $45.09 per subscriber per month representing a 5% increase. This amounts to an annual increase of approximately $5,134. Combined Insurance Company has communicated the need for a 7% increase in the specific reinsurance premiums effective October 1, 2006. This amounts to approximately $15,349 per year in additional premium. This is based on a specific stop loss level of $75,000 per member per year. This coverage is pooled with other reinsurance plans underwritten by Combined and not experience rated. The current medical trend factors projected for the coming year are 12.2%based on the 2007 Segal Health Plan Cost Survey. The premium for the aggregate coverage is proposed to remain the same at $23,044; however, the aggregate attachment level is being reduced from approximately $2,151,397 to $1,764,732. This reduction in exposure to the City is based on the cost effectiveness of the AvMed network as well as favorable utilization of the plan in the first nine months of operation. This represents an 18% reduction in the aggregate factor or approximately $386,665 in reduced exposure to the City for the 2006/2007 plan year. The Rhodes Insurance Group recommends that the City of Dania Beach accept the AvMed and Combined Reinsurance renewals effective October 1, 2006 through September 31, 2007. Please let me know if you have any questions regarding this information or recommendation. • Sinc ely, Lloyd F. Rhodes Cc: Patricia Varney Alison Poole, Wakely &Associates, Plan Actuary 2 of 2 City of Dania Beach • Self funded Group Health Plan -AvMed 10/1/07 Renewal Self funded Plan Administration Fees Per Employee Per Month Current AvMed Administrative Fee $42.94 $45.09 Utilization Review included included Case Management included included COBRA& HIPAA Administration included included Disease Management included included Total PEPM $42.94 $45.09 Estimated Enrollment 199 199 Estimated Total Monthly $8,545 $8,973 Estimated Annual Fixed Fees $102,541 $107,675 Difference Over Current $5,134 Percentage Increase 5% Enrollment based on June 2006 AvMed report AvMed - no network access fees when member utilizes AvMed • network provider. Claims incurred at non-participating provider located outside service area will be subject to PHCS 16% network access fee. Fee calculated based on estimated savings negotiation between PHCS & its providers. Prepared by The Rhodes Insurance Group 8/31/06 00 `p N r- c M O O O \ O \ oc ? x ^ cp M t� .�, M b4 (V M 000 - � Vj p ^ bs N � b9 C,4 E I .- U y 60; 604 � O O O v, C a�i O CDO '� vMi O v M c� O > C 00 r- C0 6) .-, 00 N O N U d tor) w 69 r s Eis s9 y9 N N US N `c 9 ao cc Pro CC cc Ln 'CC O Q ccO o 0 CC U o c000 [i :° _ d x `= Q a� oo Lei Ln lE s, ++ cy a � �d E M IC aN -v a � W a; o CIVIB & ASSOCIATES, INC. # IND: 73 STOP LOSS QUOTATION # FAM: 126 199 OPLOYER: CITY OF DANIA BEACH PROPOSAL DATE: 08/30/06 EFFECTIVE DATE: 10/01/06 S.L. COMMISSIONS: NONE COMBINED INSURANCE COMPANY SPECIFIC DEDUCTIBLE (MED, RX) $ 75,000 $ 80,000 CONTRACT TYPE 12/15 12/15 MAXIMUM BENEFIT $1,925,000 $ 1,920,000 REIMBURSEMENT % 100% 100% MONTHLY PREMIUM RATES: INDIVIDUAL $ 58.60 $ 54.80 FAMILY $ 122.65 $ 114.70 ANNUAL PREMIUM $ 236,780 $ 221,431 AGG STOP LOSS PREMIUM INDIVIDUAL/FAMILY $ 9.65 $ 9.65 ANNUAL PREMIUM $ 23,044 $ 23,044 UNDERWRITING FEE INDIVIDUAL $ 2.00 $ 2.00 FAMILY $ 2.00 $ 2.00 UAL FEE $ 4,776 $ 4,776 TOTAL REINSURANCE COSTS $ 264,601 $ 249,251 - AGGREGATE STOP-LOSS (MED, RX) CONTRACT TYPE 12/15 12/15 CLAIM LIABILITY FACTORS: INDIVIDUAL $ 739.00 $ 747.00 FAMILY $ 739.00 $ 747.00 ANNUAL CLAIM LIABILITY $ 1,764,732 $ 1,783,836 RUN IN LIMIT N/A N/A AGG ACCOMMODATION FEE N/A N/A NOTE: CMB & ASSOCIATES, INC. UNDERWRITING FEE IS NOT COMMISSIONABLE. SUBJECT TO REVIEW OF APS(s) FOR ANY ONGOING CLAIM, WHICH EXCEEDS OR IS EXPECTED TO EXCEED 50% OF THE SPECIFIC STOP LOSS LEVEL. APS(s) SPECIFICALLY REQUIRED FOR SUBJECT TO REVIEW OF CLAIMS EXPERIENCE THRU 8131/06. From: Lloyd F. Rhodes [mailto:lfrhodes@bellsouth.net] Sent: Friday, September 01, 2006 8:28 AM To: Varney, Patricia; McDonald, Mary Cc: Ansbro, Tom; Stilson, Louise; Alison Pool Subject: City of Dania -AvMed &Combined Reinsurance Renewals Per the AvMed contract that was negotiated as a result of the RFP process last year they have capped this renewal at 5%. Their renewal calls for a 5% increase effective 10/1/06. The estimated administrative fee increase is approximately$5,134 per year based on the current total enrollment of 199 subscribers including active,COBRA and retirees. They are basing their increase on infrastructure improvements in claims processing, member services and disease management programs as well as normal cost of living increases. Based on their very delivery of services and the cost effective plan performance this past year we recommend that the City accept this increase effective October 1, 2006. The specific reinsurance renewal represents a 7%increase over current and again is based on current enrollment. This amounts to an annual increase of approximately $15,349 in specific reinsurance premium. In light of current annual trends of approximately 12% and the fact that this is pooled coverage , we feel this increase is acceptable for an account of this size. Combined.also offered to move the reinsurance pooling point from$75,000 to$80,000 and maintain existing premiums. Based on the size.of this group we recommend keeping the existing stop-loss level at $75,000 and accepting the 7% increase. The aggregate factor has been reduced by 18%. The aggregate claim cap under the current contract is $2,151,397 and this is being reduced to $1,764,732 based on the enrollment of 199. The aggregate premium and is remaining the same at$23,044 per year. Please let me know if you have any questions: If you agree with our recommendation we will proceed with a formal explanation and recommendation letter for the Commissioners. If you do not agree please call me to discuss.Thank you. Lloyd F. Rhodes The Rhodes Insurance Group 1263 East Las Olas Blvd., Suite 205 Fort Lauderdale, Florida 33301 Website -http://wx,,,Nv.therhode..siiisui-aiice--roLip.corn,honie.htm Office: (954) 524-5075 Fax: (954) 525-1248 Cell: (954)205-5075 THE RHODES INSURANCE GROUP Managed Health Care&Gmup Insurance