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Home My WebLink AboutR-2020-071 City, Authorizing to Execute and Accept the Agreement for Selection of the City's Fully Insured Health Plan Coverage Procured Using the Gehring Group as Broker of Records for the City RESOLUTION NO. 2020-071 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA, AUTHORIZING THE PROPER CITY OFFICIALS TO EXECUTE AND ACCEPT THE AGREEMENT FOR SELECTION OF THE CITY'S FULLY INSURED HEALTH PLAN COVERAGE PROCURED USING THE GEHRING GROUP AS BROKER OF RECORD FOR THE CITY OF DANIA BEACH WITH THE FLORIDA LEAGUE OF CITIES, FOR INSURANCE COVERAGES BEGINNING OCTOBER 1, 2020 THROUGH SEPTEMBER 30, 2021, FOR ACTIVELY WORKING AND NON-MEDICARE ELIGIBLE RETIRED EMPLOYEES; PROVIDING FOR CONFLICTS; FURTHER, PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Dania Beach obtained the services of the Gehring Group as a Broker of Record to secure coverage for the City's group medical insurance for the 2020-2021 plan year; and WHEREAS, the City solicited requests for proposals on May 19th, 2020, and proposals were received on June 9, 2020; and WHEREAS, proposals were reviewed by the City's Human Resources and Finance Departments; and WHEREAS, City Administration, based on the City's claims experience that the Gehring Group reviewed and analyzed, recommends that the City select health plans from Florida Municipal Insurance Trust("FMIT") for the 2020-2021 plan year; and WHEREAS, in consultation with Gehring Group, City Administration also recommends additional health plan offerings, including a third coverage tier for Employee plus one dependent, a High Deductible Health Plan option(with City-provided HSA funding), and an opt- out incentive to those employees who waive City health insurance coverage; and WHEREAS, based on the City's Collective Bargaining Agreement ("CBA"), effective October 1, 2020, the employee cost will increase from fifteen percent (15%) to sixteen (16%) and the City cost will decrease from eighty five percent (85%) to eighty four percent (84%) and remain at that rate until modified by a subsequent CBA; and WHEREAS, based on current employee and non-Medicare eligible retiree census data, the City's health plan premium cost will be decreased by One Hundred Sixty Five Thousand Seven Hundred Fifty-Five dollars ($165,755.00) or 6.3 percent; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA BEACH, FLORIDA: Section 1. That the above "Whereas" clauses are ratified and confirmed as being true and correct, and they are made a part of and incorporated into this Resolution by this reference. Section 2. That the proper City officials are authorized to execute appropriate documents to accept the proposal of the Florida League of Cities — Florida Municipal Insurance Trust on behalf of the City to provide fully insured medical coverage to eligible employees and non-Medicare eligible retirees at the following not to exceed monthly rates: Current Plan/Plan Current Proposed Design FY 18/19 FY 19/20 FY 20/21 Employee only $785.82 $895.05 $872.33 Employee + 1 n/a n/a $1,720.09 Family $2,082.64 $2372.13 $2,639.53 High Deductible Health Plan Employee only n/a n/a $753.72 Employee + 1 n/a n/a $1,486.22 Family n/a n/a $2,280.65 Section 3. That, for those employees who elect the High Deductible Health Plan, the City will provide Seven Hundred Dollars ($700.00) for employee-only, and One Thousand Four Hundred Dollars ($1,400.00) for dependent coverage, in a Health Savings Account to be used to offset insurance deductibles. Section 4. That the City will provide the option of an annual incentive of Four Thousand Dollars ($4,000.00) to employees who choose to opt out of the City's Health Insurance and who provide proof of other group insurance coverage. Section 5. That funding for the cost of the City's health claims program administration for medical insurance is planned and shall be charged to the City Health Insurance Sub-Fund, Professional Services Account, Acct. No. 501-18-00-519-45-40 (active employees) and 501-18-00-519-45-41 (retirees), respectively. 2 RESOLUTION#2020-071 Section 6. That the City Commission authorizes the City to exceed the annual vendor threshold of Twenty Five Thousand Dollars ($25,000.00) for FMIT, as necessitated for fiscal year 2020-2021. Section 7. That all resolutions or parts of resolutions in conflict with this Resolution are repealed to the extent of such conflict. Section 8. That this Resolution shall be in force and take effect on October 1, 2020. PASSED AND ADOPTED on July 28, 2020. ATTEST: A B�� THOMAS SCHNEIDER, CMC LORI LEAkTLLEN CITY CLERK B ,ya MAYOR tISHEt? APPROVED AS TO FO AND CORRECTNESS: 7 � Z THOMAIS iAN BVO CITY ATTORNEY 3 RESOLUTION#2020-071 CITY OF DANIA BEACH Employee Benefits Insurance Evaluation DANIA BEACH SEA IT. LIVE IT. LOVE IT. REQUEST FOR PROPOSAL RECOMMENDATION FOR: GROUP MEDICAL INSURANCE PLAN YEAR EFFECTIVE: OCTOBER 1, 2020 JuIV 28, 2020 Presented BV: HIGROUP' /_.= EMPLOYEE BENEFITS I RI$K MANAGEMENT 4200 Northcorp PkwV., Ste. 185 Palm Beach Gardens, FL 33410 Tel: (800) 244-3696 Fax: (S61) 626-6970 www.gehringgroup.com Employee Benefits Renewal Evaluation & Recommendation Plan Year Effective: October 1, 2020 EXECUTIVE SUMMARY Last year, the City marketed all insurance benefit coverages which resulted in renewing medical coverage with FMIT for 12 months, and transitioning ancillary coverages to other vendors whose offers provided for multi-year rate guarantees. Therefore, only medical insurance was up for renewal for the 2020/2021 plan year. Last year's market bid was not favorable for this line of benefit coverage, so this year medical insurance was again marketed to all viable proposers. As a result of this bid, the City is proposing renewing the current medical insurance plan with FMIT, along with implementing the following strategies: 1. Offer three (3) coverage tiers 2. Offer an additional medical plan option a. High Deductible Health Plan (HDHP) with City funded Health Savings Account (HSA) 3. Offer an annual "opt-out" incentive of$4,000 to employees who provide proof of other group health insurance coverage. MEDICAL RFP ANALYSIS The market was fairly unresponsive to the City's request for medical quotes, likely due to the current environment and uncertainty in rate setting resulting from the global pandemic.The City received Declined to Quote (DTQ) responses from Aetna, AvMed, Florida Blue, Humana and United Healthcare (UHC). The majority of declinations received stated the carrier's inability to offer competitive rates, with one proposer declining to quote based on the timing of the market bid and a second declining to quote due to their strategic business relationship with the Florida League of Cities/FMIT. The City received a formal response from Cigna, as well as the renewal offer from FMIT, in addition to alternative plan design options and pricing for consideration. Both Cigna and FMIT proposed a reduction to the current plan rates. However, in looking toward the future to align with the City's intent to offer a dynamic benefit package and in consideration of the other choices available to the City, FMIT presented both the highest cost savings and least disruption to employees in renewing the current plan and adding the option of an HDHP plan. In addition,the City will offer three (3)coverage tiers to more equitably share premium costs for employees who choose to cover one or more family members; currently the City offers only two (2) coverage tiers. The City will also offer an annual "opt-out" incentive of$4,000 to employees who provide proof of other group health insurance coverage.The average annual cost to the City for employee sponsored medical insurance is $17,424, so there is an estimated net savings of $55,123 to the City to offer this incentive. The City also provided this recommendation to its employee union representative. [2] M, GEYHRINGRGROUP* MEDICAL RECOMMENDATION Therefore the Gehring Group recommends that the City maintain its current fully insured medical insurance program with the additional offers mentioned above with the Florida Municipal Insurance Trust (FMIT) sponsored by the Florida League of Cities at an overall estimated savings to the City of$165,755 or 6.34%. The schedule of benefits and pricing for both medical options is outlined in the attached Request for Proposal (RFP) Medical Evaluation exhibit. EXHIBITS • Request for Proposal (RFP) Medical Evaluation [3] C; GEHRINGRiGROUP' City of Dania Beach G E H R I N G GROUP` /Medical Insurance Renewal Evaluation EMPLOYEE BENEFITS I RISK MANAGEMENT Effective Date: October 1, 2020 RECOMMENDATION 2019/2020 2020/2021 Schedule of Benefits Current Plan Current Plan HDHP Plan Lifetime Maximum Unlimited Unlimited Unlimited In Network Out of Network In Network Out of Network In Network Out of Network Single $250 $500 $250 $500 $1,400 $2,500 Family $500 $1,000 $500 $1,000 $2,800 $5,000 Coinsurance(Member Responsibility) 10% 30% 10% 30% 10% 30% Qut.,of-Pocket Maximum Includes All Costs Includes All Costs Includes All Costs Single $2500 $5,000 $2,500 $5,000 $3,750 $7,500 Family $5,000 $10,000 $5,000 1 $10,000 $7,500 $15,000 Non:HospiCl5ervices Primary Care Physician Office Visit $15 30%after CYD $15 30%after CYD 10%after CYD 30%after CYD Specialist Office Visit $30 30%after CYD $30 30%after CYD 10%after CYD 30%after CYD Preventive Services No Charge Not Covered No Charge Not Covered No Charge Not Covered Laboratory Services No Charge 30%after CYD No Charge 30%after CYD 10%after CYD 30%after CYD Advanced Imaging-CT,PET,MRI $100 30%after CYD $100 30%after CYD 10%after CYD 30%after CYD Urgent Care Center $50 30%after CYD $50 30%after CYD 10%after CYD 30%after CYD Hospital Services Inpatient 10%after CYD 30%after CYD 10%after CYD 30%after CYD 10%after CYD 30%after CYD Outpatient $100 30%after CYD $100 30%after CYD 10%after CYD 30%after CYD Physician Services 10%after CYD 30%after CYD 10%after CYD 30%after CYD 10%after CYD 30%after CYD Emergency Room $125 $125 10%after CYD 10%after INN CYD Mental Health/Substance Abuse Services Inpatient 10%after CYD 30%after CYD 10%after CYD 30%after CYD 10%after CYD 30%after CYD Outpatient Office Visit $15 30%after CYD $15 30%after CYD 10%after CYD 30%after CYD Prescription Drug Benefit ,:"` ry , (Rx Copays After CYD) Generic Drugs $10 $10 Drugs Tier 1-3 Copay+any Tier 1-3 Copay+any $10 Tier 1-3 Copay+any Formulary g $35 $35 $35 Drugs amount over the amount over the amount over the Non-Formulary g $60 allowed amount $60 allowed amount $60 allowed amount Specialty Drugs/Injectables Tier 1-3 Tier 1-3 Tier 1-3 Mail Order-90 day supply 2.5x Retail Copay Not Covered 2.5x Retail Copay Not Covered 2.5x Retail Copay Not Covered Monthly CITY Premium, C R H Employee Only 44 37 7 $760.79 $732.76 $633.12 Employee+l 0 18 3 N/A $1,444.88 $1,248.42 Employee+Family 67 39 7 $2 016.31 $2 217.21 $1 915.75 Retiree Only 32 27 5 $596.70 $581.55 $502.48 Retiree+l 0 8 1 N/A $1,146.73 $990.81 Retiree+Family 19 9 1 1 $1 581.42 $1 759.69 $1 520.43 Monthly CITY Premium 162 ,138 24 $217,709 $180,304 $26,611 Annual CITY Premium $2,612,509 $2 108 521 $319 332 Annual HRA Funding(Active EE's) N/A N/A •00 00 Total Annual CITY Premium 2,612,509 2,446,753 $Increase N/A $165,755 %Increase N/A 6.34% [4]