Title
Continuation of Blue Cross Blue Shield of Florida, Inc (Florida Blue) as the provider of Specific Stop-Loss Carrier for the City Group Health Plan (B)
This item involves a request for the City Commission to approve the continuation of Blue Cross Blue Shield of Florida, Inc. as the provider through their subsidiary, High Mark Insurance, of specific stop-loss insurance for the City’s Group Health Plan and modify the Stop-loss attachment point and broaden the coverage.
Explanation
The City maintains a self-funded health plan for its employees, retirees and their family members. The health plan utilizes a risk transfer tool to mitigate the impact of large claims. Specific Stop-Loss insurance is the risk transfer tool that the group health plan utilizes to cover the cost of large claims. Under a specific stop-loss policy, the City’s group health plan is responsible only for a fixed dollar amount of a covered members annual claims costs, after that specified amount has been paid, all subsequent claims costs are reimbursed to the City.
Florida Blue was awarded the stop-loss business for three years beginning with Plan Year beginning January 1, 2015. Under current purchasing policies, if the annual cost rises more than 10%, the City Commission will have to approve the new pricing. After a very modest renewal in 2016 of around two percent, the City’s health plan suffered an adverse claims year that necessitated a significant rate increase of 37%. When the premium notice was sent, staff asked for alternative deductibles and asked Florida Blue to look at the City’s loss ratio to date and the projected claims for the remainder of this year and into next plan to determine if the policy parameters were sufficient to protect the health plan.
Currently, the City has a 12/12 contract for stop loss insurance. This means that a claim must be incurred and paid within the policy period. Given the plan’s expected claims and those that are maturing during the last q...
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