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Item 4E AudioItem 4EItem 4E Approve renewal of Approve renewal of contract with Aetna for contract with Aetna for employee medical and employee medical and dental benefits dental benefits City of Southlake Strategy MapCity of Southlake Strategy Map The City of Southlake provides municipal services that support the The City of Southlake provides municipal services that support the highest quality of highest quality of Fulfill OurFulfill Our lifelifefor our residents and businesses. We do this by delivering for our residents and businesses. We do this by delivering outstanding value outstanding value and and MissionMission unrivaled qualityunrivaled qualityin everything that we do.in everything that we do. Deliver on OurDeliver on Our Safety Mobility Infrastructure Performance Management Quality PartnershipsSafety Mobility Infrastructure Performance Management Quality Partnerships and Securityand Securityand Service Delivery Developmentand Service Delivery Developmentand Volunteerismand Volunteerism Focus AreasFocus Areas C3 Provide attractive C4 Attract and keep top-tier C2 Provide travel C1 Achieve the Serve OurServe Our and unique spaces for businesses to drive a convenience within highest standards of CustomersCustomers enjoyment of personal dynamic and sustainable city and region safety and security interestseconomic environment B2 Collaborate with B1 Implement andB3 Pursue B5 Optimize B4 Provide high Manage theManage the select partners to share best practices innovative service use of quality customer BusinessBusiness implement service across all departmentsdelivery options technology service solutions ProvideProvide F3 Invest to provide and F1 Achieve F2 Maintain or F4 Maximize FinancialFinancial maintain high quality competitive financial improve AA bond return on public assets StewardshipStewardship benchmarksratinginvestments L5 Actively promote L1 Ensure our people L2 Enhance L3 Attract, L4 Recognize PromotePromote opportunities for partnerships understand the leadership develop and and LearningLearning and volunteer involvement strategy and how they capabilities to retain a skilled reward high and Growthand Growth (individual and group) contribute to it deliver resultsworkforceperformers Live Our Core ValuesLive Our Core Values Integrity Integrity ƔƔInnovation Innovation ●●Accountability Accountability ●●Commitment to Excellence Commitment to Excellence ●●TeamworkTeamwork BackgroundBackground Insurance products bid in 2006Insurance products bid in 2006 •• Aetna awarded medical, dentalAetna awarded medical, dental –– Aetna has been City provider since 1996 except for 14 Aetna has been City provider since 1996 except for 14 •• month period 2002month period 2002--2003.2003. Excellent customer service and coverageExcellent customer service and coverage •• Rate renewals based on:Rate renewals based on: •• Claims paidClaims paid –– HMO better than average; PPO highHMO better than average; PPO high •• Dental averageDental average •• Health industry “trend”Health industry “trend” –– Medical inflation, services used, Medicare/Medicaid Medical inflation, services used, Medicare/Medicaid •• Aetna Rate RenewalAetna Rate Renewal Plan Plan City Rate City Rate Predicted Predicted Plan Plan YearYearIncrease Increase TrendChanges Changes (1) BeginBegin(Medical)(Medical)(Y/N)(Y/N) (2) 10-01-20067.3%12.0%Y 10-01-20079.9%11.1%N 10-01-20080.0%10.7%N 10-01-2009*5.0%10.0%N •Proposed 1.Source: (Segal Health Plan Cost Trend Survey, The Segal Company, www.shrm.org) 2.Plan changes included increased co-pays and deductibles, increased premiums for employees Aetna Rate RenewalAetna Rate Renewal •5.0% rate increase; no plan changes. •Estimated cost increase for FY 2010: –Medical benefits$60,762 –Dental benefits$2,661 •Funds included in proposed FY 2010 budget. RecommendationRecommendation Approve renewal of contract with Aetna for employee medical and dental benefits for plan year October 1, 2009 through September 30, 2010. Questions?Questions? Kevin HugmanKevin Hugman (817) 748(817) 748--81938193