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Title:
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Specific Stop-Loss Insurance for Employee Health and Accident Benefits
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Title
Specific Stop-Loss Insurance for Employee Health and Accident Benefits
Explanation
The City, through its Group Benefits Broker, solicited bids from 28 Insurance Companies with 2 vendors responding. The City of Gainesville self insures its employee health benefit. Specific stop-loss insurance allows the City to transfer some of the risk for large claims to an insurer. The new stop-loss contract will transfer risk for claims that exceed $150,000. After a careful review of the proposals, John Alden Life Insurance offered the most comprehensive coverage at the lowest premium. The new contract with John Alden Life, is based on a guaranteed minimum premium with additional premiums due based on annual claims experience. At a minimum, the City will save $65,000 per year. However, based on the previous 3 years claims experience, the savings would be $135,000. This assumes the City remains below the present loss ratio as it has for the previous 3 years.
Fiscal Impact
Funds are available in the FY99 budget. Costs are allocated in the Employee Health and Accident Benefits (EHAB) fund.
Recommendation
The City Commission: 1) approve the selection of John Alden Life Insurance as the carrier for specific Stop-Loss coverage; and 2) authorize the City Manager or his designee to negotiate with and enter into an agreement for three years starting from the date of execution, with the possibility of two (2) additional one-year extensions, subject to the approval of the City Attorney as to form and legality.