HomeMy WebLinkAbout15. 22-395
SEPTEMBER 27, 2022 22-395 RESOLUTION
(CARRIED___6-0___LOST________LAID OVER________WITHDRAWN________)
PURPOSE: APPROVE RENEWAL OF AGREEMENTS WITH UMR AS
HEALTH INSURANCE THIRD PARTY ADMINISTRATOR (TPA)
AND CAREMARK AS PHARMACY BENEFIT MANAGER (PBM);
PROCUREMENT OF STOP LOSS INSURANCE;
IMPLEMENTATION OF PLAN DESIGN CHANGES FOR
EMPLOYEES NOT REPRESENTED BY AFSCME AFL-CIO; AND
RENEWAL OF DENTAL INSURANCE AGREEMENT WITH
DELTA DENTAL OF WISCONSIN
INITIATED BY: ADMINISTRATIVE SERVICES
WHEREAS, the City of Oshkosh evaluated health and dental insurance programs
for 2023; and
WHEREAS, the City recommends renewing agreements with UMR as the Third
Party Administrator for the health benefits insurance plan and Caremark as the
Pharmacy Benefits Manager, procuring advantageous stop-loss insurance, and
implementing plan design changes which will result in the City of Oshkosh incurring a
16.6% increase in projected costs for 2023, 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 which will result in a one percent (1%) increase in projected
costs for 2023; 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 renew agreements with UMR as the Third Party Administrator for the
health benefits insurance plan and Caremark as the Pharmacy Benefits Manager; procure
advantageous stop-loss insurance; and implement plan design changes to the health
insurance plan (with the exception of the plan extended to employees represented by
SEPTEMBER 27, 2022 22-395 RESOLUTION
CONT’D
Oshkosh City Employees Transit Division Local 796 AFSCME AFL-CIO) as well as enter
into and take those steps necessary to renew the agreement with Delta Dental of
Wisconsin as the Third Party Administrator for a self-funded dental insurance plan in
substantially the same form as the existing agreements and endorsements, any changes
in the execution copies being deemed approved by their signatures.
BE IT FURTHER RESOLVED that money for this purpose is hereby appropriated from:
Acct. Nos. 0100-0071-2128 - Health Insurance
0100-0071-2110 - Dental Insurance
TO: Honorable Mayor and Members of the Common Council
FROM: John Fitzpatrick, Assistant City Manager/Director of Administrative Services
DATE: September 21, 2022
RE: Employee Health and Dental Insurance for 2023
BACKGROUND
In 2022, the City transitioned to a self-funded health insurance program which includes a variety
of components such as a third party administrator (TPA), a stop loss carrier, networks, and
pharmacy benefit manager (PBM). The City also has a self-funded dental plan administered
through Delta Dental. Additionally, the City utilizes Gallagher Insurance, Risk Management
and Consulting as our benefits consultant.
ANALYSIS
After evaluating current medical plan cost trends, it was initially determined that we would
need to increase our funding level by 24% in order to meet 2023 expected expenditures utilizing
the same plan design. However, after a review of expenditure trends and an analysis of
comparable plans and discussion with our employee Health Insurance Focus Group, the
decision was made to administer some plan design changes through increased deductibles and
out of pocket maximums. After those changes, the adjusted increase in funding level for 2023 is
16.6%. There are no TPA or PBM cost increases for 2023 due to existing agreements. The City is
currently out for bids on the stop loss insurance and will accept the most advantageous option.
Additionally, staff projects a one percent (1%) increase for the dental program in 2023.
FISCAL IMPACT
Staff is estimating an overall 16.6% increase for the health program and a one percent increase
(1%) for the dental program in 2022. This will increase our insurance program by approximately
$1,211,240 in 2023, of which, the total 2023 General Fund and Levy supported increase is
$1,115,500.
Our city employee focus group, staff, and City Manager Rohloff understand that it will be
necessary to evaluate our plan for 2024 in order to consider what changes may be necessary in
2
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 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), retention of UMR as the TPA for the health insurance
program, Caremark as the PBM for the prescription drug program and Delta Dental of
Wisconsin as the TPA for the dental program, as well as 16.6% and 1% increases to the health
and dental insurance plans respectively.
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