city of San Antonio


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File #: 19-8444   
Type: Misc - Professional Services Agreements
In control: City Council A Session
On agenda: 12/5/2019
Posting Language: Ordinance approving the renewal of a stop loss Insurance policy from HM Life Insurance Company to cover City civilian employees, non-Medicare eligible civilian retirees, uniformed employees, and their dependents who are covered under the City’s medical insurance plans in an estimated annual amount of $797,265.00, for a term beginning January 1, 2020 and ending December 31, 2020. Funding is available in the Employee Benefits Insurance Fund FY 2020 Adopted Budget. [Ben Gorzell, Chief Financial Officer; Lori Steward, Director, Human Resources]
Indexes: Employee Benefits
Attachments: 1. HM Stop Loss Renewal Proposal, 2. Fiscal Impact Form 11112019, 3. Draft Ordinance, 4. Ordinance 2019-12-05-0994
Related files: 18-2087, 18-6237
DEPARTMENT: Human Resources


DEPARTMENT HEAD: Lori Steward


COUNCIL DISTRICTS IMPACTED: City-wide


SUBJECT:

Stop Loss Insurance Policy


SUMMARY:

This ordinance authorizes the City Manager or his designee to approve execution of the renewal with HM Life Insurance Company for a Stop Loss Insurance Policy that will cap the City's risk on 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 12 months beginning January 1, 2020 and ending December 31, 2020.


BACKGROUND INFORMATION:

The City of San Antonio offers nine 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 2020 is over $136 million.

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 member claims over the past three years within their Texas book of business ranging from $2 million to $14 million. Member claims in excess of $1 million continue to increase significantly year over year.

HM Life Insurance Company provided cost estimates for stop loss insurance for deductible levels at $1,100,000 and $1,200,000. In reviewing the total impact to the City, Gallagher recommended renewing with HM ...

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