12-13-2016 Regular School Board Meeting
Agenda Item #28


Title
The School Board's Medical Stop Loss Insurance Policy Renewal

Discussion

The School Board's stop loss insurance policy is set to expire on December 31, 2016. Willis, Towers, and Watson, the district's broker of record, issued a request for proposal and six carriers responded: AIG, Sun Life, CIGNA, HM Insurance, MunichRe, and Symetra. Of the six carriers that responded, only three provided a stop loss quote: AIG, CIGNA, and Sun Life. The remaining carriers were not competitive and declined to quote. The current stop loss carrier, Sun Life, provided a firm renewal quote of $683,889 with the same terms as current. AIG has provided a quote of $666,847, which is $17,042 less for the same terms as current. Although this quote is less than Sun Life's quote, AIG is not firm in their price and will not provide a firm quote until they obtain the district's November 2016 medical cost results. The stop loss carrier's terms require a $387,000 aggregate liability in excess of a $425,000 deductible per claim.

The current annual premium paid for the 2016 plan year was approximately $579,555. Sun Life's renewal quote of $683,889 is an increase of 18% over the previous year's premium. AIG's quote of $666,847 is an increase of 15.1% over the previous year's premium. We intend on obtaining AIG's firm price before the end of this fiscal year.



Recommendation

To grant the Superintendent authority to bind the School Board's Medical Stop Loss insurance policy for the maximum amount of $683,889, based on the firm quote received from Sun Life. If the firm pricing received from AIG remains lower than Sun Life's firm quote then we will select the policy offered by AIG. However, if AIG's firm price is equal to or higher than Sun Life's firm price then we will select the policy through Sun Life. The maximum amount to bind the Medical Stop Loss insurance policy will not exceed $683,889.



Meeting Date(s)
Information - 11/22/2016
Consent after Information12/13/2016

Authority for Action
Board Policy 8710

Involves Expenditure of Funds Directly in the Classroom
No

Source of Funding
Operating - Other

FY
Amount
Budgeted
Fund
Cost Center
Project
Function
Object
Program
2017$683,889Yes73198500010027730772000

Contact

Mark Langdorf, Director, Office of Employee Benefits and Risk Management, ext. 620
Dr, Carol Kindt, Deputy Superintendent/Chief Human Resources Officer, ext. 200




Attachment:  Board Agenda Item - Attachment for Stop Loss.pdf