Placement: Consent Agenda
Action Requested: Motion / Vote
title
Approve Stop Loss Insurance Policy with Symetra Life Insurance Company for FY 2023/2024
body
Submitted By: Kimberly Sala, Deputy Director, Human Resources
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Kimberly Sala, J.D., SHRM-CP, Human Resources
2. Parties: City of Port St. Lucie and Symetra Life Insurance Company
3. Purpose: To provide Stop Loss Insurance for medical claims.
4. New/Renewal/Modified: Renewal
5. Duration: 1 year
6. Benefits to Port St. Lucie: To provide protection to the City for medical claims that exceed the threshold of $500,000.00 per claimant.
7. Cost to Port St. Lucie (Annual and Potential): The estimated expenditure for FY 23/24 is $1,422,416.
Presentation Information: Staff and Gehring Group are available to answer any questions the Council might have.
Staff Recommendation: Move that the Council waive the provisions of the City’s Procurement Code requiring competitive bidding pursuant to Section 35.04(c), and approve the stop loss insurance policy with Symetra Life Insurance Company conditioned on the final policy reflecting the same language of the 2021 policy, with the exception of the coverage and premium rate.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve the stop loss insurance policy with Symetra Life Insurance Company.
2. Move that the Council provide staff direction.
Background: Stop loss insurance is a component of the City’s self-funded health insurance program and it provides protection to the City from the financial risk of unpredictable high costs and/or high volume claims filed under the plan. Stop loss coverage protects against claims that could compromise the City’s financial health. The City first engaged the services of Symetra in 2003 to provide stop loss insurance and retained them through the competitive RFP process in 2011. For Fiscal Year 2020/21, the Council approved a waiver of bid for good cause shown with respect to the stop loss insurance with Symetra. On July 6, 2022, the City’s insurance broker, the Gehring Group, released an RFP to the market and solicited responses for stop loss insurance proposals. A total of six (6) proposals were received from four (4) carriers and all proposals were vetted by the Gehring Group and the City. Symetra had the best coverage, for the most cost effective amount, and was selected to provide coverage for the 2022/23 fiscal year. In 2023, the City’s insurance broker, Gehring Group, solicited responses for stop loss insurance proposals from the current carrier for the 2023/24 fiscal year and received six (6) varying proposal options.
Issues/Analysis: Based upon market factors and the City’s claims data, the City’s actuary assumed a 20% increase in stop loss premiums for FY 23/24. However, to renew the current policy “as is,” the proposed premium represented a 28.4% increase, which equates to a premium increase of approximately $616,996.00 annually. As such, the City, in conjunction with Gehring Group, requested additional renewal options including an increase to the Individual Specific Limit (“ISL”) and/or the inclusion of lasers. The responses received did not include the addition of lasers. However, the options provided did include incremental increases to the ISL. The option before you for consideration proposes increasing the ISL from $275,000.00 per claimant to $500,000.00 per claimant. Raising the ISL to $500,000 per claimant represents a 34.5% premium decrease (approximate premium savings of $749,010.00 annually). It is important to note that, by increasing the ISL, the City’s claims exposure does increase. However, we analyzed the current large claimant activity and weighed both the claims exposure and premium savings and estimated that increasing the ISL to $500,000.00 will save the City approximately 17.5% (or approximately $972,575.00) versus the current stop loss policy with an ISL of $275,000.00 per claimant. The proposed policy coverage differs in the following manner: Individual Specific Level (ISL) increases from $275,000.00 to $500,00.00 per claimant. The proposed policy coverage is identical to current coverage in the following manner: The policy is based on when claims are paid and does not consider when the claims were incurred (Paid Contract Basis); there is an unlimited maximum annual reimbursement, which includes medical and prescription claims; and there are no higher deductibles for certain high claimants or exclusion of any claimants from coverage (no lasers).
Attached is the 2021-2022 Stop Loss Insurance Policy the City was issued by Symetra. The City has been advised that Symetra will not send a new Policy until the Proposal (also attached) is signed, but that the 2023-2024 Stop Loss Insurance Policy will be subject to the same terms and conditions as the 2021-2022 Stop Loss Insurance Policy. The City Attorney’s Office has reviewed the 2021-2022 Stop Loss Insurance Policy. Based on the representation that the terms will be the same for the 2023-2024 Stop Loss Insurance Policy, the request for this item is for Council to conditionally approve the attached Proposal, conditioned on the 2023-2024 Stop Loss Insurance Policy language comporting with the 2021-2022 Stop Loss Insurance Policy, as represented.
Financial Information: Funding has been appropriated in the Medical Trust Fund / General Government / Stop Loss (#605-1900-549353-00000, SYMETRA).
Special Consideration: This is an annual policy and costs are based on claims data filed under the plan in the previous year. In the event that claims data increases, with additional claimants meeting or exceeding the increased ISL threshold, the City does have the option to reduce the ISL threshold in future years which may result in an overall premium increase.
Location of Project: N/A
Attachments:
1. Stop Loss Plan Evaluation (comparison of current plan offering versus proposed plan offering);
2. Symetra Stop Loss Policy for FY 23/24.
3. Stop Loss Contract 2021-2022
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: N/A
Legal Sufficiency Review:
N/A