CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Approve the recommendation by GCG Financial to award the Medical Insurance renewal to Blue Cross Blue Shield of Illinois (BCBSIL) for an amount not to exceed $3,022,595 and for a one-year term (Item 1 of 3)
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DEPARTMENT: Human Resources
SUBMITTED BY: James Sheehan, Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
Other items on the City Council agenda related to this item:
* 18-746: Pharmaceutical Management Services renewal with CVS-Caremark
* 18-747: Specific Stop-Loss Insurance Policy renewal with Optum-Unimerica Insurance Company
On April 15, 2014, City Council approved GCG Financial (GCG) as the City's benefits broker for a three-year period beginning May 1, 2014. A two-year extension was approved on April 18, 2017 to extend the contract term to April 30, 2019. One of the duties of GCG is to price, recommend and negotiate the renewal of medical insurance contracts for the City.
As a self-insured organization, the City contracts for administration of the medical insurance program, while internally funding actual claim expenses. The City offers four medical plans, including:
* HMO - Health Maintenance Organization
* PPO - Traditional Preferred Provider Organization
* PPO-CDHP - Consumer-driven health plan with a health reimbursement account (HRA)
* PPO-HDHP - High deductible health plan with a health savings account (HSA).
To limit liabilities, the City maintains individual stop-loss reinsurance for individuals with catastrophic claims of more than $200,000 on the HMO plan and $300,000 on the PPO plans.
Overall, total healthcare costs for 2019 are projected at $16.4 million, a seven-percent decrease over 2018 projections. As a self-insured organization, medical claims represent the majority of the projected expenses. The City implemented significant changes in recent years to the medical insurance program to implement more effective participant cost-sharing. Changes included plan design re...
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