775-353-5555
431 Prater Way Sparks, NV United States
Instagram link
Twitter link
EN 
Sparks City Council Meeting 7/8/2013 2:00:00 PM
Monday, July 8, 2013 2:00 PMCity Council Chambers, Legislative Building, 745 Fourth St, Sparks, NV
Consent Items: 5.4
Title: Consideration and approval to renew the city’s stop loss insurance with National Union Fire Insurance Company for the city’s self-funded group medical benefits program for 2013/14.
Petitioner/Presenter: Jen McCall/Jen McCall
Recommendation: Recommend approval to purchase stop loss insurance to protect the city’s health benefits program from individual catastrophic claims.
Financial Impact: $338,820.00
Total Costs: $338,820.00
Total Costs: $338,820.00|
Fund: Group Insurance Self- Insurance Account: 603070 Program: Provider Contracts in Group Health Fund (050436) Amount: $338,820.00 Budget Status: Budget Exists |
Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.
A Business Impact Statement is not required because this is not a rule.
Agenda Item Brief: The City self-funds its group medical benefits program. In order to protect the program from individual catastrophic medical claims exceeding $225,000, the program purchases stop loss insurance which provides significant financial protection to the plan.
Background: Medical stop loss insurance can be purchased on either an aggregate or specific basis to protect health plans against adverse claims experience – on either a group (aggregate) or individual (specific) basis. Specific stop loss is more appropriate for plans like the city’s, protecting it from large individual claims that can create significant funding and rate spikes. With a current per claim deductible of $225,000 and the PPO hospital contracts that we have in place, stop loss protection does not come into the picture often; however, in those cases where treatment must be sought out of the area in non-PPO hospitals as centers of excellence for difficult and complicated conditions, stop loss coverage has helped to protect the self-funded medical plan from significant losses. Renewal of this insurance was accomplished with the assistance and advice of the city’s health insurance broker/consultant – L/P Insurance Services. 21 companies were sent offers to bid, with 16 opting out and/or not providing competitive rates. National Union Fire, our present carrier, offered a reduction in premium as well as a 90 day rate lock.
Analysis: National Union Fire Insurance will protect the plan against multiple large claims in a single year, which could be disastrous to the finances of the city. Protecting the plan from catastrophic losses is especially pertinent in years where city revenues are tighter than ever and there are no excess reserves. As seen in the stop loss renewal options below, National Union Fire Insurance provided a reduced renewal quote with a 5.04% decrease to the city’s premium to continue at current plan levels.
Alternatives: Council could direct staff not to purchase specific stop loss insurance from National Union Fire Insurance or to find other solutions to address the issue of large claims exposures.
Recommended Motion: I recommend approval to renew medical stop loss insurance with National Union Fire Insurance to protect the city’s self-funded group medical plan from catastrophic losses.
Attached Files:
Stop Loss Contract 2013.pdf
