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Home My WebLink AboutMinutes - 3/14/2001 - Finance and Personnel Committee FINANCE AND PERSONNEL COMMITTEE � MINUTES March 14, 2001 Corrunittee Members Present: Chairperson Alderman Murgatroyd, Alderman Baii-d, Alderman McClatchy Others In Attendance: City Clerk Althoff, City Administrator Lobaito, Assistant Administrator Maxeiner, Alderman Bolger Insurance Broker, Scott Sm.iricky of the Splinter Group Chairperson Alderman Murgatroyd opened the meeting at 6:40 p.m. He stated the purpose of this Finance and Personnel Committee meeting was to review and make a recommendation regarding the city's health insurance renewal rates for 2001/2002. HEALTH INSURANCE RENEWALS 2001/2002 Scott Smiricky, insurance broker for the Splinter Group was in attendance. Mr. Smiricky presented an eleven-month review of the city's current medical, dental, vision and drug claim levels. He noted thus far the City has received $59,584.89 in specific reinsurance reimbursement monies. A cost comparison of the city's current medical costs and 1995 Blue Cross Renewal rates demonstrated only a 12% increase or$90,956.66 clifference. Assistant Administrator Maxeiner explained annual medical/dental/drug insurance renewal quotes were sought. Those obtained were not favorable. �' Nir. Smiricky was then instructed to return to the market in the hopes more favorable rates could be negotiated. His efforts were largely unsuccessful. A lengthy discussion followed. Mr. Smiricky noted several variables might have contributed to the overall cost/premium increase. One, the city's insurance enrollment has increased througk�out the fiscal year, resulting in an overall participant increase of 8%. '1`wo, use of the plan has increased as well, Mr. Smiricky cited the following percentage increases Medical Claims 22% Dental Claims 11% Vision Clai.ms 20% Drtzg Claims 36% Total overall 26% Three, the insurance market has experienced an overall increase of approximately 10.9%. The cost analysis revealed an increase of almost 27% in fixed costs and 14% in claims costs for the eleven month period between March, 2000 and February, 2001. � Finance Committee Minutes March 14, 2001 �' Page�T�vo The r��newal quotes were distributed for committee review. Quotes were obtauled from the following reinsurance carriers: Monumental Fidelity Security Standard Gerber Lincoln In response to Committee Chairperson Murgatroyd's inquiry Mr. Smiricky noted the increase in fu�ed costs reflect an increase in the specific reinsurance premium. The specific reinsurance premium was increased in response to the knowledge of a signi.ticant claim. Some discussion followed regarding the level of spe�c reinsurance. The City's current specific level is $30,000. Mr. Smiricky suggested the committee consider raising the specific level to $50,000 to lower the insurance fixed costs. Assistant Administrator Maxiener noted an increase in specific insurance would also increase the level of risk assumed by the City. Mr. Smiricky noted the insurance market was increasing aggregate � insurance coverage by approximately 25% to create a claims buffer corridor. Chairperson Alderman Murgatroyd noted the insurance number is just a placeholder in the budget and is not a "real" cost figure. He clarified past claim history would indicate a lesser overall cost. Some discussion followed regarding the specific and aggregate reinsurance quotes. Mr. Smiricky noted the city's current reinsurance carrier has quoted a spec�c level of$50,000 whereas other carriers are requesting higher specifics or special conditions relating to the known significant insurance employee claimant. It was the recommendation of Mr. Smiricky and Assistant Administrator Lobaito to recommend to full council the retention of the city's current reinsurance specific and aggregate carriers at the costs presented. Motion by McClatchey, seconded by Baird to recommend to full council the retention of the City of McHenry's current reinsurance carriers for both the $50,000 specific level and aggregate level at the costs as presented. Voting Aye: Baird, McClatchey, Murgatroyd Voting Nay: None Absent: None Motion carried. � Finance Committee Minutes � Marcli 14, 2001 Page'I'hree Motion by McClatchey, seconded by Baird, to adjourn the meeting at 7:28 p.m. Voting Aye: Ba.ird, McClatchey, Murgatroyd Voting Nay: None Absent: None Motio n carried.. �� Chairperson Murgah-o � `.. �-� City of McHenry Benefit Plans Eleven Month Review (4-1-00 thru 2-28-01) ,-_.� Prepared by Scott J. Smiricky, CIC The Splinter Group, Inc. PO Box 518 Park Ridge, Illinois 60068 Tel. 847.825.0880 Fax 847.825.1768 � � Claim Analysis Claims Medical Dental Vision Drugs Total* Paid* $483,496.41 $69,021.17 $16,314.20 $95,938.53 $664,770.31 Incurred $400,304.50 $63,620.58 $14,737.02 $90,156.42 $568,818.52 Run-In $83,191.91 $5,400.59 $1,577.18 $5,782.11 $95,951.79 Notes: Deduct for claims covered by specific reinsurance and aggregate reinsumace. There are$59,584.89 of claims over the specific attachment.There are no claims over the aggregate attachment. � Cost Analysis Cost Ytd. Fixed Costs $180,134.10 Claim Costs" $604,656.62 Total $784,790.72 Notes: As indicated above,$59,584.89 of claims over the specific attachment have been deduded.As well as$528.80 of voids/refunds � �.- Cost Comparison 00/01 Enrollment Single Family April 36 93 May 36 93 June 36 93 Jufy 37 86 August 37 93 September 41 94 October 40 94 November 34 97 December 38 93 January 41 88 February 34 89 Totals 410 1013 � 1995 Blue Cross Renewal Rates � � Rates xEnrollment= Cost Single: $153.58 410 $62,967.80 Family: $538.53 1013 $545,530.89 1995 Medical Rate Total $608,498.69 Current Vision Total $16,31420 Current Dental Total $69,021.17 Grand Total $693,834.06 Less Current Cost Ytd. $784,790.72 Difference ($90,956.66) -12% � I�/Y�O. Ci✓v2oe.�r�-ic.JT , 1 ,� s r- — To'� . +�hl" 9��00 �33 �g> �3 �8 'y��I 0 0/o i `f � o I oi.3 J'�a3 �,� f �� fa� -�' /oS �' �-�3"/0 -�- 3��0 �'8'� Claim Analysis Claims Medical Dental Vision Drugs Total* /l fio.- a/oo — .395;�ds?.� �.;/63."�y ��,��sy� �o��s�9 s'�s,i.��.� Paid* $483,496.41 $69,021.17 $16,314.20 $95,938.53 $664,770.31 � £s8��.6y ;- 6,85?.3s a,66g.�� -��.��3.�1 f�3�,6NG..�9 �-��z% �-i// -t a o% �3s�3�/n �- �> 8/o _�� Incurred $400,304.50 $63,620.58 $14,737.02 $90,156.42 $568,818.52 Run-In $83,191.91 $5,400.59 $1,577.18 $5,782.11 $95,951.79 Notes: Deduct for claims covered by specfic reinsurance and aggregate reinsumace. There are$59,584.89 of claims over the specfic attachmeM.The�e are no daims over the aggregate attachment. �o;os�il�;.a,�us Af��u s�_�/�_�;�A� C �-s��. c� 6{,m5 L- a a/o: ��,�9.�. `f/ - ,�o i/� , �� 3 3 8�-2.�� 9��o0 3 95; J6�. �� _ /3� '��9 S�� = 3�i,, � ��r'. 3� �- 5��6 i5!�� - �/, �i3. �o ��sd/o ,, / w Cost Analysis Cost Ytd. ��t oc, Fixed Costs $180,134.10 � ��..t, i�,�.��. �''3 s�`7,'�78 Claim Costs" $604,656.62 �� Total $784,790.72 ` S� \ 't ��'�-C s- � Notes: As indicated above,$59,584.89 of claims over the specific �� attachment have been deducted.As well as$528.80 of voids/refunds '`� J ��'� � �� x �� v � � � Table B Medical Claim Acitivty with Regard to Specific Attachment Health Plan Year April 1, 2000- April 1, 1999 - April 1, 1998 - Present March 31, 2000 March 31, 1999 #Claims °/a Claims #Claims % Claims #Claims % Claims Severity Category Over$7,500 Over$7,500 Over$7,500 Over$7,500 Over$7,500 Over$7,500 $7,500-$9,999 3 23.1% 8 44.4% 7 35.0% $10,000-$19,999 7 53.8% 8 44.4% 7 35.0% $20,000 -$29,999 1 7.7% 1 5.6% 3 15.0% . _. . . -.,�, .. ,�m....�.., �« ,.,�.....�. M �,v..;� a�,»,��r;x»3 k�.,,�aa°�a, °�s��.��,��,:�ra�:�'...�.., _�.,,.. i��,�...�.��,,..�.--.:-� $30,000-$39,999 1 7.7% $40,000-$50,000 1 5.0% > $50,000 1 7.7% 1 5.6% 2 10.0% Totals 13 18 20 Note: Existing Specific Attachment is $30,000