775-353-5555
431 Prater Way Sparks, NV United States
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Sparks City Council Meeting 6/11/2012 2:00:00 PM
Monday, June 11, 2012 2:00 PM745 4th Street, Sparks, NV 89431
Consent Items: 5.3
Title: Consideration and approval of a contract 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 2012/13.
Petitioner/Presenter: Jennifer McCall/Jennifer McCall
Recommendation: Staff recommends 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.
Financial Impact: $353,310.00
Total Costs: $353,310.00
Total Costs: $353,310.00|
Fund: Group Insurance Self- Insurance Account: 603070 Program: Provider Contracts in Group Health Fund (050436) Amount: $353,310.00 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, 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.
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.
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: Staff recommends approval to allow Human Resources to renew medical stop loss insurance with National Union Fire Insurance to protect the city’s self-funded group medical plan from catastrophic losses.
