Placement: Consent Agenda
Action Requested: Motion / Vote
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Approve a Wavier of Bid for Stop Loss Insurance with Symetra Life Insurance Company for FY 2022.
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Submitted By: Robyn Holder, CPPB, Procurement Management Department (PMD).
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Robyn Holder, CPPB (PMD).
2. Parties: City of Port St. Lucie and Symetra Life Insurance Company.
3. Purpose: To provide Stop Loss Medical Insurance.
4. New/Renewal/Modified: Renewal.
5. Duration: 1 year.
6. Benefits to Port St. Lucie: To protect the City for medical claims that exceed the threshold of $275,000.
7. Cost to Port St. Lucie (Annual and Potential): The estimated expenditure for FY 2022 is $1,680,000.
Presentation Information: N/A.
Staff Recommendation: Move that the Council waive the bidding, per Chapter 35.04(c), good cause shown and approve the renewal of the stop loss insurance policy with Symetra Life Insurance Company.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve the renewal of the stop loss insurance with Symetra Life Insurance Company.
2. Move that the Council not approve the recommendation and provide staff with direction.
Background: The City has hired Symetra since 2003 for stop loss insurance and has retained them through a competitive RFP process in 2011. Since 2014, the average increase has been 10.65% with no change to the ISL threshold of $250,000. Since health costs are increasing each year due to raising prescription costs, technology costs, rising chronic illness, etc., the average stop loss increase is around 12-15%. The preliminary renewal offered each year is typically received between 100-120 days prior to the effective date with firm rates received 90 days prior. Stop loss insurance vendors will not release firm rates 90 days prior to the need to receive updated claims experience in order to lock in rates for the next renewal year (12 months).
After months of negotiations conducted by our Insurance Broker, The Gehring Group, was able to obtain this coverage at a 33% increase. The reason for the high renewal rate was due to some future risk exposure with the City’s large claimants. The Gehring Group provided two (2) options to consider for the stop loss.
1.) Increase individual stop loss to $275,000 for a 15.3% increase in premiums; and
2.) Increase the individual stop loss to $300,000 producing a 0.7% increase in current premiums.
The Gehring Group’s recommendation is to consider option one to increase the individual stop loss to $275,000.
Issues/Analysis: Staff discussed these options with a consideration to go out to bid. Discussing the bid option at this time would not be enough time to go out to bid and award a bid for an October 1st effective date, leaving the City liable for any and all claims without stop loss protection until a contract was in place. It was determined to renew this policy and begin working on a new bid for next year.
Financial Information: Funds are appropriated in the Medical Trust Fund / General Government / Stop Loss (#605-1900-549363-ALDEN).
Special Consideration: N/A.
Location of Project: N/A.
Attachments:
1. Department Memo approved by the City Manager.
2. Symetra Stop Loss Policy.
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:
Reviewed by Ella M. Gilbert, Deputy City Attorney. Approved as to Legal form and sufficiency by James D. Stokes, City Attorney.