01-21-2014 Regular School Board Meeting
Agenda Item #26


Title
BPS Health Plan Stop-Loss Insurance Vendor for 2014

Discussion

Background:

BPS’ current stop-loss insurance coverage to protect against catastrophic medical/behavioral claims is provided by Symetra Financial. This coverage design includes a $425,000 specific deductible per individual member and an aggregate deductible of $387,000, for an annual premium in 2013 of $567,396 (note that this premium does not include pharmacy coverage).  BPS requested a 2014 renewal quote from Symetra and they responded with a 15 percent premium rate increase for 2014 for medical/behavioral only, which is not acceptable.

BPS’ benefits consultants, Willis of Florida, were requested to then conduct a complete analysis of the stop-loss insurance market.  Willis requested quotes on a variety of individual deductibles and also premium quotes if pharmacy were included—with the continuing rise in the percentage of pharmacy claims to all paid claims (currently at 19.5 percent) and the increasing use of very expensive specialty medications, it is prudent to consider inclusion of pharmacy in our stop-loss protection.

Ten firms responded:  five were not competitive compared to Symetra’s 2014 quote, and five others responded with the following bids.  Below is the essential information upon which a recommendation is being made:

Respondent

Premium Excluding Rx

Premium Including Rx

International Assurance of Tennessee (IAT)

17.1% over current rates

22.1% over current rates

Munich RE

9.7% over current rates

14.7% over current rates

Symetra

0% - rate pass

5% over current rates

Willis Accident & Health

8.1% under current rates

6.6% under current rates

SunLife

11.4 % under current rates

8.4% under current rates

 

Financial Analysis:

With no change in plan deductibles, as well as adding pharmacy as part of the stop-loss coverage, SunLife presented the most competitive quote at $472,115/year in annual premiums for stop-loss insurance, with expected 2014 premium savings of $95,281 compared to the Symetra renewal.



Recommendation

Recommendation:

Accept the SunLife bid as described above for 2014 BPS Health Plan stop-loss insurance coverage.



Meeting Date(s)
Information - 12/10/2013
Consent after Information1/21/2014

Authority for Action
FS 768.28; 1001.42

Involves Expenditure of Funds Directly in the Classroom
No

Source of Funding
Other Sources

FY
Amount
Budgeted
Fund
Cost Center
Project
Function
Object
Program
13-14$472,115Yes7xx98500010027500772000

Contact
Susan Standley, Director, Employee Benefits & Special Projects, x.216