08-Insurance consultant's reportCITY COUNCIL AGENDA ITEM BRIEFING SHEET
Submittal Date:
Originating Department:
Presented By:
Agenda Item No.:
11/03/09
Council Date:
Finance
Gene Anderson
g•
11 /09/09
RECOMMENDED MOTION:
Receive the insurance consultant's report on the request for proposals for the City's medical, dental, and
vision coverage plus life/AD&D and long term disability insurance coverage.
POLICY ISSUE(S):
Fiscal Management
An RFP for fully insured medical, dental, vision, coverage and life/AD&D and long term disability
coverage for the City of Paris was issued in September. The City received the renewal response from
TML for its fully insured medical program, dental, vision, life/AD&D and LTD; and one additional
proposal for vision coverage from Block Vision. While several other carriers and an insurance agency
requested RFP material, no other proposals were received. The Block Vision proposal did not meet the
RFP requirement to match current City coverage which included having an open network. Their
proposal was rejected on that basis since it limited the providers employees could go to for vision
services. A review of the medical renewal proposal was performed. The renewal for the Standard plan
had no rate increase; the Care Plan renewal was a 10% increase; and the High Plan was a 3% increase.
An inquiry to TML was made to obtain an explanation for the increases in the Core and High plans.
Being the incumbent, TML had one month's of claim data for the new benefit structure; and the Core
plan had a 116% loss ratio, thus the 10% increase in the premium. The Standard plan showed an 82%
loss ratio; and the High plan an 86% ratio. TML's renewals for the dental, vision, life/AD&D and LTD
had no rate increase. TML required that they have all or none of the optional dental and vision coverage.
Since TML has the best overall coverage, their optional plans are the only optional plans being offered
to employees in the open enrollment period. TML is also offering a second dental plan with increased
benefits.
BOARD/COMMISSION RECOMMENDATION:
NONE
EXHIBITS:
Consultant's letter.
ACTION:
BUDGET INFO:
F-I Financial Report ❑ Minute Order
Expense
$NA
❑ Departrnent Report ❑ Resolution
Budgeted Amt.
$NA
F~ Presentation ❑ Ordinance
y'I'D Actual
$NA
❑ Public Hearing Z Receive Report
Acct. Name
NA
Acct. Number
NA
FISCAL NOTES:
None
REVIEWED AND APPROVED BY:
Z Administration Z City Clerk ❑ Community Development ❑ EMS/IT E Finance ❑ Fite
❑ Municipal Court ❑ Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utilities
City of Paris _ ~ - 1_ 9 Revised 2/04/08
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Ftrst itt Service aniC :Expertise
John Rahlfs, Jr.
Benefit Consultant
November 2, 2009
Mr. Gene Anderson, Finance Director
City of Paris
P. O. Box 9037
Paris, TX 75460
Reference: 2009 Results of RFP for Medical, Dental, Vision, Life & LTD Benefits
Dear Mr. Anderson:
An RFP for fully insured medical, dental, vision, coverage and life/AD&D and long term disability for the
City of Paris was issued in September. The City received the renewal response from TML for its fully
insured medical program, dental, vision, life/AD&D and LTD; and one additional proposal for vision
coverage from Block Vision. While several other carries and an insurance agency requested RFP material,
no other proposals were received. One medical carrier declined to offer a proposal on the City's medical
plan; and, this may be attributed to the fact that the City just changed the medical benefit structure on 7-1-
09 to a three-benefit schedule program, and there was no definitive claim experience for this program.
Additionally, the City of Paris is in the TML medical risk pool, which provides very competitively priced
coverage due to their managed care network (United Healthcare) and the structure of the program itself;
and TML participates in the PEBA (Public Employer Benefit Alliance) that offers other benefits such as
the dental, vision, life/AD&D and LTD coverage at very competitive pricing due to the co-op arrangement.
Therefore, with respect to these other benefits, a principle reason that more proposals were not received
would be that carriers felt their products were not competitive with the existing coverage.
A review of the medical renewal proposal was performed. The renewal for the Standard plan was -0- %
increase; the Core Plan renewal was a 10% increase; and the High Plan was a 3% increase. An inquiry to
TML was made to obtain an explanation for the increases in the Core and High plans. Being the incumbent,
TML had one month's of claim data for the new benefit structure; and the Core plan had a 116% loss ratio,
thus the 10% increase in the premium. The Standard plan showed an 82% loss ratio; and the High plan an
86% ratio. TML's renewals for the dental, vision, life/AD&D and LTD were -0- % increases.
Block Vision provided the only alternative proposal for vision care. Block's premiums are lower than
TML, because they utilize a restricted network that has five providers in Paris, including Wal-Mart and
Texas State Optical. The TML vision plan is a discount plan with total open access to all providers. The
Block rates are employee-$6.50; and family-$16.35. The TML rates are $9.38 and $18.76. The decision
far this benefit would be an open network versus a restricted one.
Should there be any questions, please contact me.
Cordially,
John RahCfs, ,7r.
John Rahlfs, Jr.
Benefit Consultant
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