City of Laredo

City’s Self-Funded

Health Plan Workshop

M2005-W-04

1110 Houston Street

Laredo, Texas  78040

August 25, 2005

5:30 p.m.

 

 

I.          Call to Order.

 

            With a quorum present, Mayor Elizabeth G.  Flores called the meeting to order.

 

II.        Roll Call

 

            In attendance:

 

            Elizabeth G.  Flores,                                                                 Mayor

            Alfredo Agredano,                                                                    Council Member, District I

            Hector Garcia,                                                                          Council Member, District II

            John C.  Galo,                                                                          Council Member, District III

            Johnny Amaya,                                                                         Council Member, District IV

            Johnny Rendon,                                                                        Council Member, District V

            Gene Belmares,                                                                        Council Member, District VI

            Jose A.  Valdez, Jr.,                                                                 Mayor Pro Tem, District VII

            Gustavo Guevara, Jr.,                                                               City Secretary

            Larry Dovalina,                                                                         City Manager

            Cynthia Collazo,                                                                       Deputy City Manager

            Jaime Flores,                                                                            City Attorney

 

            Motion to excuse Cm.  Ramirez.

 

            Moved:  Cm. Agredano

            Second:  Cm.  Amaya

            For:     7                                               Against:  0                                            Abstain:  0

 

III.       Pledge of Allegiance.

 

            Mayor Elizabeth G.  Flores led in the Pledge of Allegiance.

 

IV.       Presentation of the City of Laredo’s current partially Self-funded Health Plan, as

compared to a Fully Insured health Plan by Mr.  Ken Wethe, City’s benefit consultant.

 

Larry Dovalina, City Manager, said that staff has had several meetings with the Health and Benefits Committee where they have discussed very serious insurance issues.  He added that the Committee has tried to be as reasonable as possible to the taxpayers and be cognizant of what is affordable to the employees.  He acknowledged that the City of Laredo offers benefits that other entities do not offer.  He added that the City has worked very diligently on the rising cost of insurance and noted that the problem is not unique to Laredo. The City of Laredo is at a point where some very tough decisions must be made which will affect the employees and the people around them. 

 

Mr.  Wethe, Benefit Consultants, gave the following presentation:

 

Exhibit A

Definition:

 

Self funded:

 

A self funded, or self insured plan, is one in which the employer assumed partial financial risk for providing health care benefits to its employees.

 

Rather than obtaining medical coverage from an insurance carrier, the employer elects to fund the risk up to a certain level where a Reinsurance or Stop Loss Insurance carrier is brought in.

 

The Stop Loss is designed to limit the employer’s loss to a specified amount, to insure that large, or unanticipated claims, do not upset the financial integrity of a self funded plan. 

 

Self Funded vs. Fully Insured

 

With self-funding, the employer holds the cash needed to fund benefits, instead of sending the fully conventional premium to the insurance company, only a small fraction of the conventional premium is sent to the reinsurance carrier.

 

The employer purchases re-insurance for protection, holds the remainder of the claim funds, invests them, segregates them if desired, or uses them for general business purposes until they are needed for the funding of claims. 

 

The employer retains and keeps the funds when claims do no materialize, hence making a profit.

 

Advantages of Self Funding:

 

·        Flexibility in the benefit plan design.

·        Portability from one carrier to another.

·        Cost Savings (If you have a good expected claims year, that is the best scenario.  But even if you don’t there is a maximum liability in place.)

·        That is, money not spent for claims can be re-invested in our health plan.

·        These savings may also be used to enhance existing benefits or to add new ones.

·        Not subject to Fully Insured Carrier’s profit margin.

·        Not subject to Fully Insured Carrier’s premium tax factor.

·        Not subject to state mandated benefits.

·        Lower operational costs.

 

 

 

 

City of Laredo/Partially Self-Funded

 

History:

 

Prudential

(1987 – 1989) Hartford

(1989) TML – Third Party administrator (not an insurance company)

City of Laredo is “partially self-funded” because we have Stop Loss (after $100,000 insurance company starts paying.)

 

What does our current Third Party Administrator do for the City of Laredo?

 

·        Go out for bids on City’s behalf (no additional consultants fees).

·        Negotiate better rates.

·        Provide Employee Educational Training.

·        Non-Profit (do not work based on commissions).

·        Compliance (Make sure we are in compliance with the law.)

·        Retiree billing.

·        Continuation of Coverage (C.O.C.) administration.

·        Claim and prescription processing and payment for regular employees and retirees.

 

If the City of Laredo leaves partial self-funding:

 

·        All outstanding claims will have to be processed and paid at an additional cost.

·        There may not be continuity of coverage for employees.

·        There may not be flexibility to adjust benefits.

·        On any “good year” we may not be able to give upgrades to existing benefits (dental, vision, short-term disability, etc.) nor offer new benefits.

·        We may have to pay commissions.

 

More points regarding City of Laredo partially self funding experience:

 

·        No major employee complaints.

·        Cutomer service satisfaction.

·        All Index Cities (Brownsville, El Paso, Mc Allen, San Antonio, Corpus Christi, and Harlingen) are self-funded, except for Harlingen. 

 

What is our Third Party Administrator doing to lower costs?

 

·        Mail order.

·        Plan modifications/administration.

·        Disease Management.

·        Negotiation with hospitals, physicians and/or networks. 

 

 

 

 

 

Example:  LISD

 

Fully Insured

Monthly cost                                      High                                                    Low

Employee only                                      $272.59                                               249.68

Employee/Family                                  $778.55                                               735.20

 

EE        2471 X $272.59 X 12 = $8,082,839

EF        1220 X $505.96 X 12 = $7,407,254

 

Total (High Plan)                      $15,490,093

 

EE        2471 X $249.68 X 12 = 7,403,511

EF        1220 X $485.52 X 12 = 7,108,013

 

Total (Low Plan)          $14,511,524

 

Self Funded                                                    Fully Insured

(L)       $11,362,092                                        (L)       $14,511,524

(H)       $11,362,092                                        (H)       $15,490,093

 

Med. Claims     $          $7,704,803

Presc Claims    $          $1,328,707

ADMIN           $          $   864,672

Stop Loss         $          $1,463,910

 

                        $          11,362,092

 

Life, AD & D, PAI       $297,205                     $1,669,545

Supplemental                $260,951

Dental                          $507,078

Employee H & W         $604,311

 

                                    $1,669,545

 

Other                           $658,645                     $658,645

 

Total                            $13,690,282                (L)       $16,839,714

                                                                        (H)       $17,818,283

 

History of Rate Increases

 

Fiscal Year                   Fire/Police                    Regular EE                   % Increase

 

2002-2003                   $93.28                         $103.78                       20%

                                    $77.82                         $86.48                        

2003-2004                   $98.05                         $108.97                       5%

                                    $93.38                         $103.78

2004-2005                   $102.95                       $114.42                       5%

                                    $98.05                         $108.97

2005-2006                   $113.25                       $125.86                       10%

                                    $102.95                       $114.42                       (Proposed)

 

Schedule of Benefits

 

Fiscal Year

Deductible In/Out Net

Out-of-Pocket

Dr./Specialist Co-pays

Emergency Room

Pre/Route Exams

Rx Mail Order

2002-2003

$250/$500

(80%/60%)

$1000/$2000

2 F Members

Dr. $20.00

Specialist $35.00

$25.00

(80%)

$200

Gen/Brand 6/25 Mail Order

2003-2004

SAME

SAME

SAME

$50.00

($80%)

$400

SAME

2004-2005

SAME

SAME

SAME

SAME

SAME

SAME

2005-2006

Increase to $500/$750

Increase to $3000

SAME

SAME

SAME

Gen/Grand Same Mail Order (90 days)

 

Benefit comparison

 

UISD

LISD

WEBB County

City of Laredo

UISD Pays:  $247.60/Mo.

LISD Pays:  $225.00 Mo.

Webb Pays: $329.72 Mo.

City Pays:  Monthly EE $211.37/EF $409.60 Police and Fire $211.37/ EF $434.43

High Plan – OV

$25; Rx: $5/$20/$35 Deb. $200/$600; (80%) EE $25; EC $ 194.66; ES $298.73; EF $496.45; Dual FP $248.85

State Plan – OV

$15; Rx: $5/$10/$35; Ded. $100/$300 (90%)

EE $402.64; EC $1,107.45; ES $1,415.42; EF $2,019.03; Dual Family Plan $1,771.43

Low Plan – OV $25; RX: $10/$20; Ded. $500; (70%/50%) EE $24.49; EC$ 216.39; EF $510,20

High Plan – OV

$25; Rx: $10/$20; Ded. $ 500 (80%/60%) EE $47.59; ES $293.36; EC $242.43; EF $553.55

 

State Plan – OV

$10; RX; $10/$20; No Ded.; (90%/70%); EE $222.61; ES $626.65; EC $541.95; EF $1,053.47

Plan OV $25 RX $7/$25

Ded. $500

(90% Coverage 10% Employee) EE - $21.67

ES - $195.00

EC - $119.17

Ecldn $130.00

EF - $238.33

Plan – (Proposed)

OV $20/$25

RX: $7/$30

Ded.  $500/%750

(80%/60%)

$3,000 out of pocket

Employee only $0.00

EF Reg $272.70

EF P & F

$245.38

(10% increase)

 

Proposed Employee Health Benefits Plan

 

Increase Medical contribution rate by 10%

Increase Deductible from $250 to $500

Increase out of pocket from $1,000 to $3,000

Increase Mail order for Brand name prescription from $20 to $30

Implement the core benefit medical plan with a reimbursement/savings account

 

Exhibit B

City of Laredo

Self-Funded Health Plans

For Best & Final Grading

August 18, 2005

Combined Participants:  A thru G

 

Cost

 

Fixed                Max     Mercy              M of O             BC                   BP                   TML                           

First year          15            3                       6                   12                    9                      15

Three years      15            3                       6                   12                    9                      15

Networks         10            8                       2                   10                    6                      4

Expected          10            8                       2                   10                    8                      6

 

Total                50           22                     16                  44                  32                   40

 

Technical       

 

Enrollment        15             7                      10                  10                   12                  15

Admin. 10             6                       7                     7                     9                  10

Technology       10             6                       8                     7                    10                    9

Clients                8             2                       5                     7                      7                    8

Stop Loss           7             3                       7                     6                      5                    5

Total                50           24                      37                   37                    43                   47

 

Total              100          46                       53                   81                    75                    87

 

Comments:

 

1.  Company Names are as follows:

 

Mercy – Mercy Health Plans

M of O – Mutual of Omaha

BC – Blue Cross and Blue Shield

BP – Benefits Planners

TML – Texas Municipal League IEBP

 

2.  Cost points formula is the following:

 

Rank                            Points

 

                                                100%

2                                  80%

3                                  60%

4                                  40%

5                                  20%

City of Laredo

Self-Funded Health Plans

For Best & Final Grading

August 18, 2005

Combined Participants:  A thru G

 

Cost

 

Fixed                Max     Mercy              M of O             BC                   BP                   TML                           

First year          22.5           4.5                  9.0                18.0                 13.5                 22.5

Three years      22.5           4.5                  9.0                18.0                 13.5                 22.5

Networks         15.0         12.0                  3.0                15.0                   9.0                   6.0

Expected          15.0         12.0                  3.0                15.0                 12.0                   9.0

 

Total                75.0        33.0                  24.0               66.0                 48.0                 60.0

 

Technical       

 

Enrollment        7.5            3.5                   5.0                 5.0                  6.0                 7.5

Admin. 5.0            3.0                   3.5                 3.5                  4.5                 5.0

Technology       5.0            3.0                   4.0                 3.5                  5.0                  4.5

Clients              4.0            1.0                   3.5                 3.5                  3.5                 4.0

Stop Loss         3.5            1.5                   3.5                 3.0                  2.5                 2.5

Total                50           24                      37                   37                    43                   47

 

Total              100          45.0                  43.5                  84.5                 69.5                 83.5

 

Comments:

 

1.  Company Names are as follows:

 

Mercy – Mercy Health Plans

M of O – Mutual of Omaha

BC – Blue Cross and Blue Shield

BP – Benefits Planners

TML – Texas Municipal League IEBP

 

2.  Cost points formula is the following:

 

Rank                            Points

 

                                                100%

2                                  80%

3                                  60%

4                                  40%

5                                  20%

 

 

 

 

City of Laredo

Summary of Self-funded Proposals

Provider Discounts – Repriced Claims

Review Date: ; August 24, 2005

 

Company

Network

Charge

Allowable

Discount

Allowable

Discount

Rank

TML

Current

$1,632,164

$993,686

39.1%

-

-

-

Blue Cross

Blue Cross

$1,632,164

$993,686

39.1%

$495,021

69.7%

1

Mercy Health

Mercy

$1,632,164

$993,686

39.1%

$741,857

54.5%

2

Benefit Planners

Benefit

$1,632,164

$993,686

39.1%

$745,561

54.3%

3

TML – Renewal

TML

$1,632,164

$993,686

39.1%

$758,914

53.5%

4

Mutual of Omaha

M o Omaha

$1,632,164

$993,686

39.1%

$920,308

43.6%

5

Entrust

Health Smart

$1,632,164

$993,686

39.1%

$1,064,868

34.8%

6

 

Comments: 

 

1.  Representative sample of claims for providers with the largest benefit payments for the

     nine month period ended 06/30/2005 were selected for repricing. A total of 117 claims

     were selected for repricing with gross charges of $1,632,164. 

 

2.  Each claim was then repriced in accordance with the provider’s contract with the PPO

     network resulting in allowable amount.

 

Company

Agent

Year 1

Year 2

Year 3

Total

 

 

 

Factor       Amount

Factor     Amount

Factor     Amount

TML IEBP Current

Direct

$607,019

-

-

-

TML IEBP

Direct

$619,429

  1.2%       $626,862

5.0%    $ 658,205

1,904,496          1

Blue Cross Blue S.

Robert Laurel

$775,256

12.4%       $871,388

4.5%     $910,600

2,557,244          2

Benefit Planners

Robert Laurel

$849,733

  1.2%       $859,930

1.0%     $868,529

2,578,192          3

Mutual of Omaha

Robert Laurel

$802,171

18.7%       $952,177

7.2%   $1,020,734

2,775,082          4

Mercy Health Plan

Direct

$866,614

14.0%       $987,940

Not Available

                          5

 

City of Laredo

Summary of Self-funded Proposals

For Best & Final Offer – First Year Cost – No HRA

Sorted by Fixed Cost

 

Company

 

Admin.    Stop Loss  Run-Off    Run-Off           Total     

Expected Claims

Total

TML  Current

D

$607,019        $1,139,989                              $1,747,008    

$12,204,524

$13,951,532

TML IEBP

D

$619,429        $1,139,708                              $1,759,137    

$13,521,919    

$15,281,056    

Blue Cross

RL

$849,733        $  916,304             $102,000   $1,868,037 

$11,560,333

$13,428,370

Benefit Plnner

RL

$775,256        $1,101,568            $102,000   $1,978,825

$13,116,291

$15,095,116

Mutual

RL

$802,171        $1,174,252            $102,000   $2,078,423

$14,190,264

$16,268,687

Mercy

D

$866,614        $1,209,257            $102,000   $2,177,871

$12,727,265

$14,905,135

 

 

 

 

 

City of Laredo

Self-Funded Plan

Best Final Offer – No HRA

 

Administrative Services

 

Year 1

Year 2

Administrator

TML

TML

Benefit Planners

PPO Network

PHCS Statewide

PHCS Statewide

& HHQ Outside TX: PHCS

Utilization Review Firm

TML

TML

BP Health Management

Prescription Drug Firm

Caremark Retail

Caremark Retail

Innoviant

Agent

Direct

Direct

Robert Laurel

Stop Loss Insurance

 

 

 

Insurance Company

ING/ReliaStar

ING/ReliaStar

ING/ReliaStar

Managing Underwriter

Direct

Direct

Direct

Placement Agent

American Stop Loss

American Stop Loss

American Stop Loss

Specific Deductible

$100,000

$100,000

$100,000

Specific Contract Basis

63/12

63/12

63/12

Aggregate Contract Basis

63/12

63/12

63/12

Run in Limit – Specific

0

0

0

                      - Aggregate

0

0

0

Waive Actively at Work

Yes

Yes

Yes

Retiree Coverage (Yes/No)

Yes

Yes

Yes

Additional Information Needed

Signed disclosure

Signed disclosure

Signed disclosure

Annual cost                     Units

Rate                 Annual

Rate                 Annual

Rate                        Annual

Administration Fees

 

 

 

Medical – EE/RET          2,337

$12.75            $357,561

$12.75            $357,561

$11.75                 $329,517

Disease Management      2,337

$  1.50            $ 42,066

$  1.50            $ 42,066

$  2.90                 $  81,328

COBRA/HIPPAA           2,337

$  0.50            $ 14,022

$  1.00            $ 28,044

$  1.10                 $  30,848

Retiree Billing                    210

$  1.00            $   2,520

$  1.00            $   2,520

$  4.00                 $  10,080

FSA Fee                               96

$  5.00            $   5,760

$  3.60            $   4,147

$  4.50                 $   5,184

Agent Fee                        2,337

None

None

$ 3.50                  $ 98,154

Stop Loss Fee                  2,337

None

None

$0.50                   $ 14,022

PPO Fee                          2,337

$ 3.85             $107,969

$3.85              $107,969

$4.50                   $126,198

Rx Fee       30,000 Rx or 2,337

No Admin Fee

No Admin Fee

Included

U/R Fee                           2,337

$ 2.75             $77,121

$ 2.75             $ 77,121

$ 2.85                  $79,925

Set Up Fee

None

None

Included

Other                               2,337

 

 

 

Run In Administration    2,337

 

 

                            $102,000

Total Administration

                      $607,019

                      $619,429

                            $877,256

Stop Loss

 

 

 

Specific – EE                   2,337

$ 39.68      $  1,112,786

$39.68         $1,112,786

$   38.35         $ 1,075,487

Specific  - Dep.               1,181

Incl.

Incl.

Incl.

Aggregate                        2,337

$  0.97       $       27,203

$ 0.96

$     0.93         $      26,081

Total Stop Loss

                  $  1,139,708

                    $1,139,708

                       $  1,101,568

Total Fixed Cost

                  $  1,747,008

                    $1,759,137

                       $  1,978,825

Aggregate De.        – EE 2,337

$5433.99   $15,255,656

$602.71       $16,92,399

$584.63          $16,395,364

Aggregate De.  Dep        1,181

 

 

 

Total Aggregate Deductible

                 $15,255,656

                  $16,902,399

                       $16,395,364

Expected Claims @ 80%

                 $12,204,524

                  $13,521,919

                       $13,116,291

Total Amount cost – Expected

                 $13,951,532

                  $15,281,056

                       $15,095,116

Second Year Administration

 

Increase 1.2 %

Increase 1.2%

Third Year Administration

 

Increase 5.0%

Increase 1.0%

 

 

Administrative Services

 

Year 1

Year 2

Administrator

Mercy Health

Mutual of Omaha

Blue Cross and Blue Shield

PPO Network

MHP/PHCS

Mutual of Omaha

Blue Choice

Utilization Review Firm

MHP

Mutual of Omaha

BlueCross/BlueShield

Prescription Drug Firm

Caremark/Walgreens

Mutual of Omaha

BlueCross/Blue Shield

Agent

Direct

Robert Laurel

Robert Laurel

Stop Loss Insurance

 

 

 

Insurance Company

Companion Life

Mutual of Omaha

Blue Cross and Blue Shield

Managing Underwriter

Summit - Re

Mutual of Omaha

Blue Cross and Blue Shield

Placement Agent

Chris Alexander

Mutual of Omaha

Blue Cross and Blue Shield

Specific Deductible

$100,000

$100,000

$100,000

Specific Contract Basis

24/12

Paid

15/12

Aggregate Contract Basis

125%

Paid

15/12

Run in Limit – Specific

$100,000

$50,000

$100,000

                      - Aggregate

$2,386,000

$2,659,922

$1,393,085

Waive Actively at Work

Yes

Yes

Yes – as in bid

Retiree Coverage (Yes/No)

Yes

Yes

Yes

Additional Information Needed

Signed disclosure

Signed disclosure

Signed disclosure

Annual cost                     Units

 

 

 

Administration Fees

 

 

 

Medical – EE/RET          2,337

$15.47          $433,841

$16.47          $461,885

$33.30                $933,865

Disease Management      2,337

   8.04           $225,474

$   3.28         $  91,984

$ Included in base adm

COBRA/HIPPAA           2,337

   0.37           $ 10,376

$   0.30         $    8,413

 See bid for per occurrence

Retiree Billing                    210

$10.00          $25,000

Not Available

Not available

FSA Fee                               96

$ 4.95           $  5,702

$3.75            $   4,320

Not available

Agent Fee                        2,337

0

$ 2.00           $56,088

$3.50                 $98,154

Stop Loss Fee                  2,337

$0.61            $17,107

N/A

Included in base adm.

PPO Fee                          2,337

$1.46            $40,944

$2.50            $70,110

Included in base adm.

Rx Fee       30,000 Rx or 2,337

$0.11            $3,085

Included in ASO fee

Included in base adm.

U/R Fee                           2,337

$3.74            $104,885

$3.00            $84,132

Included in base adm.

Set Up Fee

Included

Included

Included

Other                               2,337

 

Nurseline $.90 $25,240

Rx Credit ($6.50) ($182,286)

Run In Administration    2,337

                     $102.00

$102.00

$102.00

Total Administration

                     $968,614

$35.80           $904,171

$951,733

Stop Loss

See Attachments 2A

 

 

Specific – EE                   2,337

39.58           $1,109,982

$16.27       $    456,276

$17.29                   $484,881

Specific  - Dep.               1,181

n/a

$48.94       $    693,578

$25.95                   $367,763

Aggregate                        2,337

3.54                 $ 99,276

$0.87         $      24,398

$  2.27                     $63,660

Total Stop Loss

$1,209,257

                  $  1,174,252

                              $916,304

Total Fixed Cost

$2,177,871

                  $  2,078,423

                           $1,868,037

Aggregate De.        – EE 2,337

$567.29     $15,909,081

$632.50     $17,737,830

$293.10              $8,219,696

Aggregate De.  Dep        1,181

n/a

 

                                $439.65

Total Aggregate Deductible

                  $15,909,081

                $17,737,830

                        $14,450,416

Expected Claims @ 80%

                  $12,727,265

                $14,190,264

                        $11,560,333

Total Amount cost – Expected

                  $14,905,135

                $16,268,687

                        $13,428,370

Second Year Administration

Increase:  14.0%

Increase 18.7%

Increase 12.4%

Third Year Administration

Not Available

Increase 7.2%

Increase 4.5%

 

Exhibit C

 

 

Original

Amended

Year to Date

Encum.

Variance

Annual

Opening Balance

510,792

100,107

100,107

 

 

100.00%

Revenues

 

 

 

 

 

 

Contributions - Health

12,070,683

12,070,683

9,865,275

-

(2,205,408)

81.73%

Insurance Reimburse

525,000

525,000

566,291

-

41,291

107.86%

Interest Earnings

30,000

30,000

9,035

-

(20,965)

30.12%

Discount Earnings

-

-

46,893

-

46,893

100.00%

Net Increase in Invest

-

-

1,358

-

1,358

100.00%

Total Revenues

12,625,683

12,625,683

10,488,852

-

(2,136,831)

83.08%

Total Available

13,136,475

12,725,790

10,588,959

-

(2,136,831)

83.21%

Expenses

 

 

 

 

 

 

Self Insurance Fund

 

 

 

 

 

 

Personnel Services

133,675

133,675

104,504

-

27,171

78.18%

Materials & Supplies

6,130

6,690

2,594

219

3,877

42.05%

Contractual Services

2,789,163

2,788,611

2,324,292

6,813

457,506

83.59%

Group Health Claims

8,036,017

8,036,017

8,566,788

-

(530,771)

106.60%

Prescription Health

1,588,514

1,588,514

1,420,464

-

168,050

89.42%

Other

-

-

6,890

-

(6,890)

100.00%

Total Self Insurance

12,553,499

12,553,507

12,425,532

7,032

120,943

99.04%

Employee Wellness

 

 

 

 

 

 

Personnel Services

233,108

233,108

193,561

-

39,547

83.03%

Materials & Supplies

47,575

68,929

32,269

5,447

31,213

54.72%

Contractual Services

302,293

314,734

137,854

43,489

133,391

57.62%

Total Employee

582,976

616,771

363,684

48,936

204,151

66.90%

Total Expenses

13,136,475

13,170,278

12,789,216

55,968

325,094

97.53%

 

-

(444,488)

(2,2,00,257)

(55,968)

(1,811,737)

 

Adjustment Prior Year

-

33,803

-

-

(33,803)

 

Adjusted Closing

-

(410,685)

(2,200,257)

(55,968)

(1,845,540)

 

 

 

 

Original

Amended

Year to Date

Encum.

Variance

Annual

Opening Balance

510,792

100,107

100,107

-

-

100.00%

Revenues

 

 

 

 

 

 

Contributions -

12,070,683

12,070,683

12,070,683

-

-

0%

Insurance Reimburse

525,000

525,000

933,000

-

408,000

177.71%

Interest Earnings

30,000

30,0000

9,035

-

(20,965)

30.12%

Discount Earnings

-

-

46,893

-

46,893

100.00%

Net Increase in Invest

-

-

1,358

-

1,358

100.00%

Total Revenues

12,625,683

12,625,683

13,060,969

-

435,286

103.45%

Total Available

13,136,475

12,725,790

13,161,076

-

435,286

103.42%

Expenses

 

 

 

 

 

 

Self Insurance Fund

 

 

 

 

 

 

Personnel Services

133,675

133,675

125,405

-

8,270

93.81%

Materials & Supplies

6,130

6,690

3,113

-

3,577

46.53%

Contractual Services

2,789,163

2,788,611

2,789,150

8,220

(8,759)

100.31%

Group Health Claims

8,036,017

8,036,017

11,203,008

-

(3,166,991)

139.41%

Prescription Health

1,588,514

1,588,514

1,704,557

-

(116,043)

107.31%

Other

 

 

 

 

 

 

Total Self Insurance

12,553,499

12,553,507

15,832,123

8,220

(3,286,836)

126.18%

Employee Wellness

 

 

 

 

 

 

Personnel Services

233,108

233,108

232,273

-

835

99.64%

Materials & Supplies

47,575

68,929

38,723

3,963

26,243

61.93%

Contractual Services

302,293

314,734

165,425

51,836

97,473

69.03%

Total Employee

582,976

616,771

436,421

124,551

124,551

79.81%

Total Expenses

13,136,475

13,170,278

16,268,544

64,019

(3,162,285)

124.01%

 

 

 

 

 

 

 

Adjustment Prior

 

33,803

 

 

(33,803)

 

Adjusted Closing

 

(410,685)

(3,107,467)

(64,019)

(2,760,801)

 

 

End of Exhibits

 

Mayor Flores left the meeting at 6:50 p.m.

 

V.        Status report on the Request for Proposal process regarding partially Self-funded Health Plan services by Ken Wethe, City’s benefit consultant, with possible action.

 

Mr.  Wethe, Consultant, continued to discuss the exhibits.  He explained that there were five companies that submitted RFP’s to the City.  He added that each company was interviewed by a staff of seven key employees and they were assigned pointes by each member. 

 

Cm.  Belmares expressed his dissatisfaction with Texas Mutual League.  He noted that they should have offered the City of Laredo discounts prior to the Request for Proposal process. 

 

Cm.  Garcia advised that the Health and Benefits Committee had previously requested an RFP; however, a time factor did not allow the committee to move forward with that request. He went on to say that the City Manager has been working very hard regarding the health benefits and he has been completely cooperative with the committee and their requests.    

 

Cm.  Galo announced that he would like to repeat the process of Request for Proposals for health benefits on an annual basis. 

 

Mr. Wethe recommended that the contract for the health insurance should be for three years but renewed on an annual basis.   He went on to say that the benefits and discounts should be monitored yearly. 

 

Motion to authorize the City Manager to negotiate a contract with Blue Cross and Blue Shield and return to Council with recommendations to adopt on outlining continuation of coverage, flexplan, and other pending items.

 

Moved:  Cm.  Garcia

Second:  Cm.  Amaya

For:     6                                               Against:  0                                            Abstain:  0

 

VI.       Presentation of Proposed Health Plan Modification as presented during the City Council Budget Workshop by Daniel E.  Migura, Jr., Administrative Series Director, with possible action.

 

            a.  Contribution Rate Adjustment

 

            b.  Plan Modifications

 

            c.  Addition of Core Benefits Plan and Reimbursement/Savings Account.

 

Rosario Cabello, Financial Services Director, went over appendix C. 

 

Cm.  Galo asked staff if they had a proposal on other carriers for fully funded plans.

 

Larry Dovalina, City Manager, explained that the Request for Proposal asked for self funded proposals. 

 

Cm.  Garcia advised that the Health and Benefits Committee was not interested in fully insured proposals.   

 

Mr.  Dovalina stated that staff will ask for proposals on fully insured and other components in January. 

 

Cm.  Galo said that he would be interested in viewing fully funded proposals. 

 

Cm.  Valdez and Cm.  Garcia agreed that City Council instructed staff to go out for proposals on self funded proposals.

 

Cm.  Galo explained that he did not fully understand the “linguo” of “fully funded” and “self funded”.  He was hoping that the workshop would be an educational workshop that would educate Council on the differences and to educate them on the benefits they should consider.  

 

Cm.  Galo asked if Blue Cross and Blue Shield could give the City of Laredo a quote for fully funded insurance for the remaining ten months.   

 

Mayor Pro Tempore asked Cm.  Galo if that was his motion.

 

Dan Migura, Administrative Services Director, explained that he must follow the bidding procedure and open the request for proposal to all interested parties. 

 

Jaime Flores, City Attorney, agreed that staff needs to open the proposal process to all interested parties. 

 

Cm.  Agredano left at 8:20 p.m.

 

Cm.  Galo said that he would like to amend his motion to include that staff should expedite the procedure and ask for the fully funded proposals as soon as possible.    

 

Mr.  Dovalina said that staff must write the Request for Proposals which is time consuming. 

 

Cm.  Galo said that he would amend his motion to say that staff can ask for proposals in January.

 

No vote was called on Cm.  Galo’s motion.

 

Motion to create an incentive that will allow employees an option to be removed from the City of Laredo insurance plan.

 

Moved:  Cm.  Galo

Second:  Cm.  Garcia

For:     5                                               Against:  0                                            Abstain:  0

 

Motion to authorize the City Manager to instruct staff to review the data and return to Council with all three plan modifications including the deductible, the out of pocket, and the three tier prescription plan. 

 

Moved:  Cm.  Galo

Second:  Cm.  Garcia

For:     5                                               Against:  0                                            Abstain:  0

 

VII.     Executive Session

 

The City Council hereby reserves the right to go into executive session at any time during this public meeting, if such is requested by the City Attorney or other legal counsel for the City, pursuant to his or her duty under Section 551.071 (2) of the Government Code, to consult privately with his or her client on any item on the agenda, or on a matter arising out of such item.

 

VIII.    Adjournment

 

            Motion to adjourn.                                                                                Time:  8:35 p.m.

 

            Moved:  Cm.  Belmares

            Second:  Cm.  Valdez

            For:     5                                               Against:  0                                            Abstain:  0