Item 4FCITY OF
SOUTHLAKE
MEMORANDUM
July 14, 2010
TO: Shana Yelverton, City Manager
FROM: Stacey Black, Director of Human Resources
SUBJECT: Approve a contract with United Healthcare to provide employee dental
benefits for Plan Year October 1, 2010 to September 30, 2011.
Action
Requested: Approve a contract with United Healthcare to provide employee dental
benefits for Plan Year October 1, 2010 to September 30, 2011.
Background
Information: In early June, the City issued a Request for Proposals (RFP) for its
employee medical and dental insurance benefits. The City last issued
an RFP for medical and dental insurance in 2006, and will typically
issue an RFP every four to five years depending upon renewal
proposals. This year, the current dental provider, Aetna, proposed a
rate increase of 5 %.
Ten carriers submitted proposals for dental benefits, including the
current provider, Aetna. Each proposal was reviewed and evaluated
based on the following criteria:
• Experience and reputation;
• Proposed schedule of benefits;
• Rates;
• Provider network access; and
• Reporting and cost management.
Staff carefully reviewed each proposal and analyzed proposed plans to
determine the best option for the City. Following an initial review,
United Healthcare and Aetna were selected as finalists and invited to
meet with staff. Aetna proposed a 3% rate increase to maintain the
same benefit plan. The current plan offers employees one dental plan,
with DHMO and PPO options built into the one plan. This plan allows
employees the flexibility to switch between DHMO and PPO on a
monthly basis.
United Healthcare proposed dual option PPO and DHMO plans. Both
plans are very similar to the current plan design; however, employees
are required to select one option during open enrollment and must
remain within that plan throughout the plan year. Switching to United
Healthcare will still provide employees the option of either a DHMO or
PPO plan, but with a reduction in premium on the DHMO plan. Moving
to United Healthcare reduces the City's annual cost by an estimated
8 %.
After meeting with both companies, staff selected to recommend
United Healthcare for providing the best plans combined with the best
rates.
The City currently pays the entire premium for employee only dental
coverage and the employee pays the entire dependent cost.
Financial
Considerations: The estimated cost of dental insurance premiums is $14,375 per
month, or $172,500 annually (combined City and employee premium
contributions). The estimated decrease in the City's portion of dental
insurance premiums is $8,337 for FY 2011.
The proposed dental insurance plan costs will be included in the
proposed budget for Fiscal Year 2010 -2011.
Citizen Input/
Board Review: N/A
Legal Review: The City Attorney reviewed the Request for Proposals (RFP) and
applicable documents.
Alternatives: Deny contract with United Healthcare and seek alternative options.
Supporting
Documents: The following supporting documents are attached:
• Summary of Medical & Dental RFP Submissions
• United Healthcare Benefit Levels and Rates
• Proposed Dental Insurance Plan Design Options
Staff
Recommendation: Approve a contract with Aetna to provide employee medical benefits
for Plan Year October 1 , 2010 to September 30, 2011.
CITY OF
SOUT'111 ILAKEr
2010 Medical &Dental RFP Submissions
Product Vendor Name Broker
1 Medical
Aetna
2 Medical
Blue Cross Blue Shield
3 Medical
Cigna
4 Medical
TML
5 Medical
United Healthcare
6 Medical
United Healthcare
Product Vendor Name
Lifetime Benefits, Inc
Lifetime Benefits, Inc
Lifetime Benefits, Inc
Lifetime Benefits, I
Lifetime Benefit Inc
Virtual Benefits
Broker
1 Den
2 Dental
3 Dental
4 Dental
5 Dental
6 _Dental
7 Dental
8 Dental
9 De ntal
10 Dental
11 Dental
Aetna
Ameritas
Guardian
Cigna
Blue Cross Blue Shield
Delta
SunLife
TML
MetLife
United Healthcare
United Healthcare
Lifetime Benefits, Inc
Lifetime Benefits, Inc
L ifetime Benefits, Inc
Lifetime Benefits, Inc
Lifeti Benefits, I
Lifetime Benefits, I
Lifetime Benefits, Inc
Lifetime Benefit Inc
Lifetime Benefits, Inc
Lifetime Benefits, Inc
Virtual Benefits
raventivn R. Dinannstic
Periodic Oral Evaluation
Radio
Lab and Other Dia Tests
Dental Proph ( Cleanin g)
Fluoride Treatment
Sealants
Space Maintainers
See Co Schedule
Restorations (Amal or Composite)__
General Svcs ( incl Emer Treatment)
Simple Extractions
Oral Sur ( includes sur
extra ctiop
Periodontics
Endoclonfics
See Co-Pa Schedule
Ma Services
In sJC n la y s/Crowns and Brid
Dentures and Removable Prosthetics See Co-Pa Schedule
Fixed Partial Dentures ( Brid g es )
Orthodontic Services
Orthodontia See Co-Pa Schedule
Orthodontia Eliaibilitv I
Deductible
Deductible applies to Prev. & Dia
AnnuallMax See Co-Pa Schedule
Annual TMJ Max
Lifetime Ortho Max
Waitin Period applies
Out of Network Basis
Emplo
49 $13.52
Emplo + Spouse
8 $25.26
Emplo + Child(ren)
26 $22.97
Emplo + Famil
9 $32-97
92
Monthl Premium
$1
Annual Premium
$21,102.12
�e M
Un
Specialt Benefits'
Benefit Levels and Rates
for Cit of Southlake TX
Effective October 01, 2010
Benefit Levels and Rates
for Cit of Southlake TX
Effective October 01, 2010
In Out of
Network Network
Dia q Service
Periodic Oral Evaluation
Radio
Lab and Other Dia Tests
Preventive Services
Dental Proph (Cleanin
Fluoride Treatment
Sealants
Space Maintainers
Basic Services
Restorations (Amal or Composite
General Svcs (incl Emer Treatment)
Simple Extractions
Oral Sur (incl,._ sur extrac
Periodontics
Endodonfics
Majo Services
Inla
Dentures and Removable Prosthetics
Fixed Partial Dentures (Brid
I Orthodontic Services
I
Prthodontia
Orthodontia Eliablitv
100% 100%
100% 100%
100% 100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
80%
50%
50%
50%
50%
T
50%
50%
50% 50%
Adult & Child
Deductible
Deductible applies to Prev. &
Annual Max
Lifetime Ortho Max
Waitin Period applies
Out of Network 'Basis
Emplo
Emplo + Spouse
Emplo + Child(ren)
Emplo + Famil
Monthl Premium
Annual Premium
$50/$150 $501$150
No No
$1500 $1500
$1500:1
Na
UCR 90th
89 $34.98
20 $69.95
27 $77.82
41 $118.51
177
$11
$137,667.24
3
UnitedHealthcare
Specialt Benefits
` .. ` ..
..
Dental Quote Assumpt
for City of ����UUt�`'�� TX
�For Plans: Custom -OQ420 CAPITATION -8E45O-N. Texas/Gulf Coast -
w
Rates are valid for 90 days from June 17, 2010 or October 0 1, 2010, whichever is sooner.
w
Rates are effective from October O1 . 2010 through September 30. 2011.
� Quote assumes e complete dental replacement.
w
Employer Contributory plan rates are based on an employer contribution level and employee
participation of 75-99%.
• The In- and Out-of-Nebwork Calendar Deductibles, Maximums and Lifetime Ortho Maximums are
combined.
• Quote assumes standard Exclusions and Limitations.
• Rates include Standard broker commissions.
• Assumed contract a[iumimTX.
• Rates listed above assume the plan designs quoted. Rates may change, if plan design changes.
• Rates are guaranteed for 12months
• Rates assume no changes in legislation or regulation that affects the benefits payable, eligibility
or contract.
�
Dependent children are covered to 25. Age 25if full time student
�
One or more of these plan design offerings include the MaxMultiplier benefit.
m
Some of the unused portion of your annual maximum may be available in future periods
UrdtedHeWdican.
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