From
Lisa Norris, Human Resources Director
Title
One-year renewal agreement for Specific Stoploss Insurance from Stoploss Insurance Services, Inc., administered through Fidelity Security Life Insurance Company, at an estimated annual cost of $329,421 effective January 1, 2013 through December 31, 2013, with annual renewal options approved by the City Manager if such renewal is less than twenty-five percent of the original contract fees and appropriated in the budget.
Presenter
Lisa Norris, Human Resources Director
Recommend Action
Approve
Analysis
Specific Stop Loss Insurance protects the City's self-funded medical plan from the risk of unexpected large claims on an individual basis. Stoploss insurance reimburses the City once an individual's claims paid during the calendar year exceed the specific deductible, currently $225,000. The current contract with Stoploss Insurance Services expires on December 31, 2012, but has a renewal option. Stoploss Insurance Services, Inc. subcontracts with Fidelity Security Life Insurance Company who then processes the claims for review and issues reimbursement to the City. Any claims paid in the plan year which are over the deductible are reimbursed to the City at 100% up to an annual maximum of $2,000,000 and an unlimited lifetime maximum. The specific deductible must be met again in each plan year. This coverage protects the city's insurance fund by transferring a great deal of the risk to the stop loss carrier annually.
Since 2011, the city has experienced a dramatic rise in claims exceeding $100,000, so our potential for reimbursement of claims exceeding the stoploss deductible has increased over prior years. For fiscal year (FY) 2011/2012, three claims have exceeded the stoploss deductible of $225,000, with two of those claims occurring since January 2012. We have two more that are over $200,000 currently and continuing to incur costs. Based on the two claims over the deductible and claims paid through Augus...
Click here for full text