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HomeMy WebLinkAbout28. 21-494R E V I S E D SEPTEMBER 28, 2021 21-494 RESOLUTION (CARRIED___6-0_____LOST________LAID OVER________WITHDRAWN________) PURPOSE: APPROVE SELF-FUNDED HEALTH INSURANCE STRUCTURE AND PLAN DESIGN CHANGES FOR NON-AFSCME REPRESENTED EMPLOYEES AND RENEW DENTAL INSURANCE AGREEMENT WITH DELTA DENTAL OF WISCONSIN INITIATED BY: ADMINISTRATIVE SERVICES WHEREAS, the City of Oshkosh requested proposals for Employee Health Insurance for 2022; and WHEREAS, the proposal submitted to transition to self-funded health insurance meets the requirements of the request for proposals, will result in the City of Oshkosh incurring a 12.0% increase in projected costs for 2022, and will provide minimal disruption to employee-provider relationships; and WHERAS, Delta Dental of Wisconsin offers the most advantageous dental plan to meet the City’s requirements; and NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh that the proper City officials are hereby authorized to enter into and take those steps necessary to implement a self-funded health insurance plan and enter into and take those steps necessary to implement the appropriate agreements to facilitate this structure as well as an appropriate agreement with Delta Dental of Wisconsin as third party administrator (TPA) for a self-funded dental insurance plan in substantially the same form as the existing agreement and endorsements, any changes in the execution copy being deemed approved by their signatures. BE IT FURTHER RESOLVED that money for this purpose is hereby appropriated from: Acct. No. XXX-XXXX-6306-XXXXX Health Insurance XXX-XXXX-6308-XXXXX Dental Insurance TO: Honorable Mayor and Members of the Common Council FROM: John Fitzpatrick, Assistant City Manager/Director of Administrative Services DATE: September 22, 2021 RE: Employee Health and Dental Insurance for 2022 BACKGROUND As Council is aware, through your direction and as a matter of good practice, the City regularly reviews our contract agreements and benefit structures in order to provide the best benefits possible for our staff at the most cost effective level possible for our taxpayers. With these thoughts in mind, and in consideration of the expiration of our agreement with Robin Health Partners and Delta Dental of Wisconsin at the end of 2021, city staff and our current consultant, USI Insurance Services, have been taking the appropriate steps to establish a relationship with a provider for health benefits for 2022. ANALYSIS After evaluating current medical plan costs, the decision was made to conduct a comprehensive request for proposals (RFP). Several vendors submitted proposals, including our current health provider, Robin Health Partners. These proposals did not have a broad network for our employee population and included significant cost increases for services. As has been considered in the past, in conjunction with the RFP, the city and USI Insurance Services pursued evaluation of a self-funded plan, as well as a broad network with plan design changes. As a result of this evaluation, city staff and our consultants concluded that the best options are to transition to self-funding as well as modify our plan design by increasing prescription drug co- pays as well as adjusting our deductibles and maximum out of pocket expenses (with the exception of the plan extended to employees represented by Oshkosh City Employees Transit Division Local 796 AFSCME AFL-CIO). In consideration of claim lag realized in conjunction with the conversion from a fully-funded to self-funded plan, the City will conservatively fund the health insurance plan at a 12.0% increase for 2022 which is significantly lower than the 24% - 27% increase discussed with Council at Budget Workshop #2, while also providing minimal disruption to our employees. Third party administration, pharmacy benefit management, and stop-loss services agreements are in the process of being secured and will be brought to the Council when complete. Additionally, for 2021, the Council approved a self-funded dental program with Delta Dental of Wisconsin as the third party administrator (TPA). The city staff and our consultants concluded 2 the best option is to continue with the self-funded program and continue with Delta Dental of Wisconsin as the TPA. The plan has been running efficiently and staff projects a zero percent (0%) change in costs for the dental program in 2022. The Delta Dental of Wisconsin agreement is for 2022 only. FISCAL IMPACT Staff is estimating an overall 12.0% increase for the health program and a zero percent increase (0%) for the dental program in 2022. The estimated impact on the General Fund will be an increase of $732,550 for 2022. While the city employee focus group on health insurance, staff and City Manager Rohloff are satisfied with the outcome of this year’s process, all parties understand that it will be necessary to evaluate our plan for 2023 in order to consider what changes may be necessary in order to preserve the best benefits possible for our staff at the most cost effective level possible for our taxpayers moving forward. RECOMMENDATION Based on the analysis conducted, staff recommends approval to transition to a self-funded health insurance program, modification of plan design (with the exception of the plan extended to employees represented by Oshkosh City Employees Transit Division Local 796 AFSCME AFL-CIO), and retention of Delta Dental of Wisconsin as the TPA for the dental program. Please let me know if you have any questions regarding this matter and thank you as always for your assistance and support. Respectfully Submitted, Approved: John M. Fitzpatrick Mark A. Rohloff Assistant City Manager / City Manager Director of Administrative Services Attachments: Health Insurance RFP Summary (self-funded options only) City of Oshkosh GROUP MEDICAL INSURANCE Effective Date: 01/01/2022 Robin Health Partners Renewal and UMR Self-Funded Options Year Carrier Platform / Network Focused Focused UHC Choice Plus UHC Choice Plus UHC Choice Plus UHC Choice Plus UHC Choice Plus UHC Choice Plus Plan $500 Ded Transit Plan $500 Ded Transit Plan $750 Ded Transit Plan $1,000 Ded Transit Plan Medical Benefits Comparison $500 / $1,000 $0 / $0 $500 / $1,000 $0 / $0 $750 / $1,500 $0 / $0 $1,000 / $2,000 $0 / $0 $1,000 / $2,000 $600 / $1,200 $1,000 / $2,000 $600 / $1,200 $2,000 / $4,000 $600 / $1,200 $2,000 / $4,000 $600 / $1,200 Coinsurance (In / Out)80% / 60%100% / 80%80% / 60%100% / 80%80% / 60%100% / 80%80% / 60%100% $3,000 / $6,000 $4,000 / $8,000 $3,000 / $6,000 $4,000 / $8,000 $3,500 / $7,000 $4,000 / $8,000 $4,000 / $8,000 $4,000 / $8,000 $6,000 / $12,000 $8,000 / $16,000 $6,000 / $12,000 $8,000 / $16,000 $7,000 / $14,000 $8,000 / $16,000 $8,000 / $16,000 $8,000 / $16,000 In-Network Benefits For more details please refer to the Summary of Benefits & Coverage Primary Care / Specialist Care Office Visit Ded, 80% Coins $20 / $20 Ded, 80% Coins $20 / $20 Ded, 80% Coins $20 / $20 Ded, 80% Coins $20 / $20 Urgent Care / Emergency Room Ded, 80% Coins $20 / $100 Ded, 80% Coins $20 / $100 Ded, 80% Coins $20 / $100 Ded, 80% Coins $20 / $100 Rx MOOP - $4,150 / $8,300 $10 / $30 / $60 Rx MOOP $2,350 / $4,700 $5 / $30 / $60 Rx MOOP - $4,150 / $8,300 $10 / $30 / $60 Rx MOOP $2,350 / $4,700 $5 / $30 / $60 Rx MOOP - $4,150/ $8,300 $15 / $40 / $70 / $150 / $250 Rx MOOP $2,350 / $4,700 $5 / $30 / $60 Rx MOOP - $4,150/ $8,300 $15 / $40 / $70 / $150 / $250 Rx MOOP $2,350 / $4,700 $5 / $30 / $60 Covered Employees Full Census Employee Only 142 5 147 Employee + Spouse 95 5 100 Employee + Child(ren)41 4 45 Family Coverage 219 9 228 Total Employees 497 23 520 Monthly Premiums Employee Only 678.33 772.34 841.13 968.98 813.70 968.98 794.20 968.98 Employee + Spouse 1,356.64 1,544.67 1,682.23 1,937.93 1,640.63 1,937.93 1,599.71 1,937.93 Employee + Child(ren) 1,356.64 1,544.67 1,682.23 1,937.93 1,640.63 1,937.93 1,599.71 1,937.93 Family Coverage 1,696.26 1,931.36 2,103.36 2,423.07 2,045.41 2,423.07 1,995.11 2,423.07 Total Monthly Premium Cost $652,306.84 $35,145.97 $808,859.58 $44,093.91 $786,615.87 $44,093.91 $767,266.05 $44,093.91 Total Annual Premium Cost Percentage Change Total Annual $ Change 2022 Projected Spend with Claim Lag and UMR Implementation Credit Percentage Change based with Claim Lag and UMR Implementation Credit Total Annual $ Change with Claim Lag and UMR Implemention Credit Plan information shown is for comparison purposes only and does not represent all features or limitations. If any discrepancy exists between benefits shown and carriers' proposals, the carrier proposal controls. Final rates and acceptance subject to actual enrollment and effective date. Unless specifically otherwise provided in a written agreement created between the parties, USI’s standard of care and legal duty to its clients to provide insurance products and services is: to follow the instructions of the insured, in good faith. CONFIDENTIAL AND PROPRIETARY: This document and the information contained herein is confidential and proprietary information of USI Insurance Services LLC ("USI"). Recipient agrees not to copy, reproduce or distribute this document, in whole or in part, without the prior written consent of USI. Estimates are illustrative given data limitation, may not be cumulative and are subject to change based on carrier underwriting. © 2021 USI Insurance Services. All rights reserved. $1,986,008 $1,719,084 $1,486,886 2021 Current 2022 2022 2022 Robin UMR Option 1 - No Plan Changes UMR Option 2 UMR Option 3 COVERAGE BASICS In-Network Deductible (Single / Family) Out-of-Network Deductible (Single / Family) In-Network Out-of-Pocket Maximum (Single / Family) Out-of-Network Out-of-Pocket Maximum (Single / Family) ADDITIONAL COVERAGE DETAILS Prescription Drugs Tier 1 / Tier 2 / Tier 3 / Tier 4 / Tier 5 (Tier 1 = Generic; Tier 2 = Preferred; Tier 3 = Non-Preferred; Tier 4 = Preferred Specialty; Tier 5 = Non-Preferred Specialty) Current Renewal Alternate Alternate Dual Option Census Dual Option Census Dual Option Census Dual Option Census $8,249,434 $10,235,442 $9,968,517 $9,736,319 24.07%20.84%18.02% $8,798,006$9,471,083 Declined to Quote: Anthem, Humana, Prevea 360, Security Health Plan, WPS, UHC & WEA $1,221,649.28 $9,042,598 $793,164.28 $548,572.28 14.81%9.61%6.65%