DEPARTMENT: Human Resources
DEPARTMENT HEAD: Lori Steward
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT:
Stop Loss Insurance Policy Renewal
SUMMARY:
This ordinance authorizes the City Manager or her designee to approve execution of the renewal with HM Life Insurance Company for the purchase of a Stop Loss Insurance Policy to cover claims incurred by City civilian employees, non- Medicare eligible civilian retirees, uniformed employees, and their dependents who are enrolled in the City's medical insurance plans. The purpose of the policy is to protect the City from catastrophic claims expenses. The new term of this policy is for claims incurred since December 1, 2017, but paid during the twelve (12) months beginning January 1, 2019 and ending December 31, 2019.
BACKGROUND INFORMATION:
The City of San Antonio offers seven self-insured medical benefit plans to approximately 26,000, civilian employees, uniformed employees, non-Medicare eligible retired civilian employees, and their dependents. The adopted budget to cover expenses for medical and pharmacy claims for FY 2019 is approximately $134,000,000.
Stop-loss insurance is a risk-mitigation product that provides protection for self-insured employers such as the City of San Antonio. Without stop-loss insurance, the City is responsible for the full cost of any catastrophic claim. With stop-loss insurance, employers receive reimbursement for payments made for claimants in excess of pre-determined deductible levels such as $500,000 or $1,000,000.
The City's Benefits Consultant, Gallagher, has seen catastrophic claims over the past two years in their Texas book of business ranging from $2 million to $14 million. Additionally, Human Resources staff attending a Texas HR conference heard from a smaller Texas municipality that had experienced a $12 million catastrophic claim.
HM Life Insurance provided costs for stop loss insurance for deductible levels above $1,000,000, $1,100,000, and $1,250,000. In ...
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