HomeMy WebLinkAboutInsurance Committee Minutes 07.11.2002 INSURANCE COMMITTEE MINUTES
JULY 11, 2002 5:30 P.M.
OLD COUNCIL CHAMBERS
MEMBERS PRESENT: Chairman Mark Mace Bud Arnold
Ken Olson Guy Rolison
Doug Poehls Don_rile Nelson
OTHERS PRESENT: Mary Embleton Mayor Bud Johnson
Bruce McCandless Joel Wagner
Mark called the meeting to order at 5:30 p.m. Doug Poehls was introduced as the new
member on the committee, replacing Bud Johnson.
Joel Wagner of the Wagner Group was introduced to the committee. He then presented
.the committee with additional information regarding his company's proposal for health
~nsurance coverage. This information had been briefly presented at the general employee
meeting on June 20tn. The proposal is a "partially self insured" plan, matching the city's
current plan benefits. The city will pay monthly fixed costs via separate billing from the
company. These costs are proposed to be $125.89/single and $231.88/family every
month. The proposal includes a maximum monthly cost of $432.11/single and
$1,001.83/family. This is the most the city would pay in any one month. A re-insurance
company would pick up any costs exceeding the maximum monthly cost. The city would
get two bills: one for the monthly fixed costs, and one for the claims. Ifa claim is
$35,000, for example, the city pays only the first $20,000 and the re-insurance company
picks up the remainder as well. The city keeps control of the money: the monthly
premium would be kept in a separate fund, and then the fixed costs and claims would be
paid out of that fund. The remainder, if any, stays under the city's control. If the city has
a good year with few claims, the money left in the fund could be used to reduce the
premium rate charged per employee. No claims are processed and billed to the city for
the first two months in order to allow for a cash build-up in the fund.
The plan is administered by CBSA, which is a very large third party administration
company. The plan itself is a PPO (Preferred Provider Organization) rather than a
"HMO" and employees would be free to choose any doctor or hospital in the directory.
Both St. Vincent and Deaconess doctors are included. No referrals are needed. If
someone chooses to go to a doctor outside of the network, there is still some coverage,
which is unlike the current "HMO" plan.
Premiums are not totally based on claims. The re-insurance portion of the premium is
only affected if there is a very large "shock" loss. Excess funds left over must be used
for employee benefits only.
Insurance Committee
July 11, 2002
Page 2
By becoming partially self insured, the city could design their own plan. Joel also
referred to an article in the July 3~ issue of the Wall Street Journal regarding Medical
Savings Accounts and recent IRS changes (copy attached). The city may wish to
consider this option.
Discussion and questions followed. Some topics were the frequency of the meetings,
shopping for plans other than "HMO" type plans, and how to compare the current
proposals. Mary was instructed to prepare comparison charts: one for premiums, and
one for plan features. Short discussion was also held regarding HB409 and how the
choosing of an insurance plan directly effects the number of additional mills the city
would be allowed to levy.
The next meeting will be held Thursday, July 25th at 5:30 pm. The meeting adjourned at
6:40 p.m.
Respectfully submitted,
mbleton
Clerk/Treasurer