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 $3,136,509.92 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:
The two other items on the City Council agenda related to this item are:
* 19-886: Pharmaceutical Management Services renewal with CVS-Caremark
* 19-887: Specific Stop-Loss Reinsurance Policy with Symetra Insurance Company
On April 15, 2014, City Council awarded Contract 14-007, Benefits Broker, to GCG Financial (GCG). As the City's benefits broker, GCG is responsible for pricing, negotiating and recommending the renewals of medical insurance contracts for the City. The City renewed the contract with GCG on March 19, 2019 for a term ending December 31, 2021.
The City offers three medical plans, including:
* HMO - Health Maintenance Organization
* PPO - Traditional Preferred Provider Organization
* 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 claims of more than $200,000 on the HMO plan and $300,000 on the PPO plans. Overall, total healthcare costs for 2020 are projected at $20.59 million, a 25 percent increase over 2019 projections.
Since 2014, the City's medical and pharmaceutical plans have outperformed the national averages, meaning that the City's per employee costs have been less than the national trends. Attachment 1 provides additional detail regarding the spend trends.
The reduction in costs due in part to the significant changes the City implemented in recent years to the medical insurance program. Changes include plan design revisions, higher participant premium contributions and education.
Examples of specific changes include:
* Implementing...
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