Title
Selection of Symetra Life Insurance Company as the Carrier for the City's Group Health Plan Specific Stop-Loss Insurance (B)
This item involves the selection as Symetra Life Ins. Co. to provide the City's Group Health Plan with Specific Stop-Loss Insurance for claims in excess of $160,000.
Explanation
The City of Gainesville purchases specific stop-loss insurance to protect the City's Group Health Plan. Specific stop-loss insurance is a risk-financing tool used to transfer the risk of catastrophic health claims to a third party, in this case an insurer. Under a stop-loss arrangement, the City's Group Health Plan would be responsible to pay for a claim until it reaches a set dollar amount called the attachment point. Once the claim exceeds the attachment point, the insurer will reimburse the Group Health Plan for all costs paid above that attachment point.
The City initiated an RFP last year for this insurance product that allowed for the City to renew with Symetra, as proposed by Gallagher Benefit Services based upon acceptability of cost, coverage, service, provider stability, and market conditions. Symetra has provided the City with its renewal terms. The terms include: increasing the current rate by five percent, maintaining the attachment point to $160,000 and maintaining the maximum lifetime benefit to $4.85 million per member. These renewal terms will cover the City's entire exposure on catastrophic claims. Considering the current loss ratio is at 139% and claims paid in excess of the attachment point of in excess of $335,000 and medical trends projected in the six to eight percent range, the Symetra renewal as proposed by Gallagher Benefits Services appears to be in the best interest of the City and its Group Health Plan.
The other key component on the Symetra product is the retro-spective premium option. A retro-spective premium acts as a gain/loss sharing program between the insured and the carrier. This option allows the...
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