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, 2021 and ending December 31, 2021.
BACKGROUND INFORMATION:
The City of San Antonio offers seven self-insured medical benefit plans to approximately 26,000 individuals, including 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 2021 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.
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 the current deductible level of $1,200,000. In reviewing the total impact to the City, HM Life Insurance Company's rate for 2021 is $6.2...
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