1. Health Insurance UpdateDate: May 6, 2003
TO: Mayor and City Council
From: Chris Kukulski, City Manager
Amy Robertson, Finance Director
RE: Health Insurance
Please find attached two spreadsheets with information regarding the proposals from
Blue Cross for funding our self -insured health fund. Basically, Blue cross tells us what
we need to fund to cover us for the worst case scenario- $ amount of claims. The admin.
fees, the ASL (aggregate stop loss) and the SSL (specific stop loss $75,000) are paid to
Blue Cross. The attachment point is the funding which goes into the self -insured fund to
pay claims. If we cover the attachment point, we can not be liable for any claims above
the attachment point. We need to cover the attachment point.
The current product is the 80/20 plan with dental and the $300/$600 deductible. The
additional premium needed to fund is shown on the right. As you can see, we have a
problem with the two party rate as the additional amount pushes it over the family. I
think when we set the rates last year the 2 party should have been $709 instead of $609.
We will need to correct the distribution between single, 2 party and family.
Other options on that page include a 70/30 plan with the same deductible and a plan with
a higher deductible. Neither give us a substantial change, 4% and 7% respectively.
The second page shows a Point of Service Plan options #3 and 44, with and without
dental. The Point of Service plan requires use of specific doctors and other changes
which we can discuss at the meeting. The amounts needing to be funded will need to be
re -allocated between single, 2 party, family, etc. All of these proposals require retirees
to pay the same as employees. They also require medicare retirees to fully fund the rates
that Blue Cross suggests. Any other arrangement would be a subsidy by one group or the
other.
—03
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