2003-02-24 Regular Meeting - Laserfiche WebLink

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• EXHIBIT "A" • MEMORANDUM The Welch To: Carol Buttler, Director, Administrative Services Company From: Neal W. Welch Two Memorial City Plaza 820 Gessner, Suite 1470 Diana L. Romagnoli Houston, Texas 77024 T: 713.827.8755 RE: Stop -Loss Proposal Comparisons F: 713.461.5788 RFP #0101 www.thewelchco.com DATE: March 14, 2003 Through the Request for Proposal process (RFP) for Stop -Loss Insurance Coverage, the City received seven (7) responses. This is a remarkable difference from two years ago when we received only one proposal. This activity says a lot about the consolidation of the stop -loss market and the increase capacity for stop -loss coverage. Attached is a spreadsheet that outlines the proposals this year as well as the current policy. At this point it would be premature to make a recommendation, but we will be ready at the time of the City Council meeting. The following are a few notes about the proposals, the market, and the City of La Porte Health plan. The Proposals • Good renewal from incumbent vendor, consistency is always a preferred avenue. ♦ Across all proposals rates up minimally, in part due to a lower number of participants with serious medical issues and the fact that the policy has met the market with respect to deductible and management directives. • All proposals other than the incumbent are very competitive but would require medical review of nine health plan participants. The Market • Market -wide increase of approximately.18%-25% are normal to keep up with a medical inflation trend of 15%. • Competition-- fewer stop -loss insurance companies but greater concentration of risk capital. City of La Porte Health Plan • Recent scrutiny of whole health plan management and direction. ♦ Potential for large claims but lower activity now. ♦ Addition of specialty management options —disease management, specialty drugs, and PPO. You are in an excellent position for negotiation toward a minimal increase in premium for the coming year. We will continue to work with the two contenders (Standard Security & Companion Life, columns 2 & 3) for the best opportunity for the City. Attachment Employee Benefits Consulting