HomeMy WebLinkAboutInsurance Committee Minutes 02.01.2010HEALTH INSURANCE COMMITTEE
Monday, February 1, 2010
2:00 P.M. @ City Hall
Members Present:
Bill Sheridan, Chairman
Monica Salo
Alex Wilkins
James Huertas
Donnie Nelson
H.P. Nuernberger
Cathy Gabrian
Others Present:
Mick DiFronzo
Mary Embleton (late)
Bill introduced Mick DiFronzo with DiFronzo and Company, an insurance consultant
hired by the city to look over the bids we received.
Mick said he has been in the insurance business 44 years and his background covers all
types of insurance. He is a licensed consultant and has done work recently for the
Belgrade school district and Carroll College. He said we went out to bid to take a picture
to see what's out there. We tried last year but were unable to complete the process due to
time constraints. He said we will not have a firm rate until April on our current insurance
but then it is too late to get out without incurring fees. This is typical of self-funded plans;
if it were open, groups would leave and they would lose control.
Mick looked at the benefits, stating our Blue Select custom plan is very rich; our benefits
are beyond a Cadillac plan. We are in the one percent range with this plan and if we lose
it, we will never go back. Rate increases dictate the coverage. When rates get too high, a
lesser coverage is chosen that is affordable.
New West is the second largest insurance carrier in the state and Billings Clinic is
associated with them. They sent a nice booklet but no bid or numbers were included. Our
RFP was precise and they should have given a rate. They have significant groups
throughout the state but it is too late for them now. Mick said someone dropped the ball in
their organization.
United Healthcare submitted a bid but stated that with groups our size, they cannot offer
retiree coverage. Mick said the State of Montana requires cities to offer coverage to
retirees. Laurel has three retirees on the plan so we cannot accept their bid.
Blue Cross/Blue Shield submitted a plan that Mick thought was a very strong benefit plan.
The plans are not exactly what we have but since 95% of our employees are on the custom
plan, he concentrated on their 80/20 plan. He said it is less than our Blue Select but better
than the Bridger plan. It is a managed care plan with access to either hospital network.
BCBS is pooling with other groups between 50-100 employees and the make-up of the
pool will include many different types of plans. The quoted rates are set for one year.
Mick feels their offer is decent and we should allow them to give a presentation.
Jim said we need to have a second plan option and was surprised we didn't get it. Mick
said they did submit both the 80/20 and 70/30 plans.
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February 1, 2010
It was questioned whether Bill had spoken to anyone at MMIA about coming down to
answer questions. Bill said he contacted them about a month ago and they were willing to
come anytime. It was suggested to also set up a meeting with MMIA this week.
In regard to a question about which insurance company is better, Mick clarified that
MMIA is not an insurance company; they are a third party administrator. Self-funded
plans do not have the guarantee of fully insured plans. Mick gave an example with
Associated Employers which is a self-funded plan, administered by EBMS. Their
anniversary date is April I" and by October, some groups were getting 70% assessments
and they can come back and ask for additional money four times throughout the year.
With a self-funded plan, you have to pay the run-off fees if you leave early but not with a
fully insured plan.
Mick reviewed the increases we have had with MMIA and stated we have a low claims
history. Based on this, he feels we would have a low rate increase. MMIA said they will
have a preliminary rate by mid-February.
Mick said we need to get a clear understanding of what's happening with our group and
also with the MMIA pool, regarding claims and reserves. He said we should have a city
representative who has knowledge of claims information and paid premiums. Mary
questioned whether this would violate HIPPA but did say this information is developed
quarterly.
The committee agreed to have presentations from both BCBS and MMIA and will try to
schedule them this week. Members also asked to have copies of the pertinent pages of the
BCBS proposal.
Meeting adjourned at 3:05 p.m.
Respectfully Submitted,
6A
Cathy Gabrian