Item 5I<.1Ly ul 04)ut Ila LcC I VA45
MEMORANDUM
July 21, 2006
TO: Shang Yelverton, City Manager
FROM: Kevin Hugman, Director of Human Resources
SUBJECT: Approve a contract with Aetna to provide employee dental benefits
Action Requested: City Council consider approval of a contract with Aetna to provide employee
and dependent dental benefits for Fiscal Year 2006 -2007.
Background
Information: In May 2006, the City bid out its employee insurance benefits. These benefits
include medical, dental, group life insurance (basic, supplemental and
Accidental Death and Dismemberment), long term disability, flexible spending
account (Section 125) administration, and optional vision coverage. Bids were
received on June 26, 2006.
A total of 28 carriers submitted 57 proposals for employee benefit plans. A
summary of the bids received is attached (Attachment A).
Fifteen (15) carriers submitted 25 different proposals for dental benefits,
including Aetna, the current provider. Staff reviewed the proposals on the
following criteria:
• Experience and reputation
• Proposed schedule of benefits
• Rates
• Provider network access / penetration
• Reporting and cost management
Based on this review, staff recommends Aetna as providing the best plan
benefits commensurate with rates. In addition, by choosing Aetna for dental
benefits, we have been able to gain an additional concession on medical
benefits for multiple lines of insurance coverage (medical and dental benefits).
The rate increases proposed are:
• Dental Benefits (DMO/PPO): 4.0% increase
Financial
Considerations: The proposed dental insurance plan costs are within budget amounts for the
proposed FY 2006 -2007 Budget.
The estimated cost to the City for dental insurance premiums is $6,187 per
month, or $74,252 annually (the City only pays the employee portion of dental
coverage).
Shana Yelverton, City Manager
July 21, 2006
Page 2
Citizen Input/
Board Review: Not Applicable.
Legal Review: The City Attorney reviewed the Request for Proposals (RFP) and applicable
documents.
Alternatives: Denial of contract with Aetna; seek alternatives.
Supporting
Documents:
• Summary of Bids Received
• Aetna Summary of Plan Rates (Dental)
Staff
Recommendation: City Council approve a contract with Aetna for employee dental benefits,
effective October 1, 2006 with guaranteed rates through September 30, 2007.
Staff Contact: Kevin Hugman, Director of Human Resources
Summary of Bids Received
Insurance Company
Agent
Medical
Dental
Basic I
Supp Life
1 AD&D
LTD
Vision
Flex Plan
Aetna
Lifetime Benefits 1 Bob Mundlin
X
X
X
United Health Care
Lifetime Benefits / Bob Mundlin
X
X
Blue Cross Blue Shield
Lifetime Benefits / Bob Mundlin
Al Boenker Insurance
X
X
Ameritas Group
Lifetime Benefits / Bob Mundlin
X
Total Administrative Service Corp.
Lifetime Benefits / Bob Mundlin
X
X
CompBenefits
Lifetime Benefits / Bob Mundlin
X
X
Guardian Life Insurance Co.
Greg Thompson
X
X
Guardian Life Insurance Co.
Lifetime Benefits 1 Bob Mundlin
X
X
Delta Dental
None
X
Sun Life Financial
Lifetime Benefits 1 Bob Mundlin
X
X
Safeguard
Lifetime Benefits / Bob Mundlin
X
X
MetLife
Lifetime Benefits / Bob Mundlin
X
AIG American General
Lifetime Benefits 1 Bob Mundlin
X
X
Dental Select
Lifetime Benefits / Bob Mundlin
X
Principal Financial Group
Summit Financial 1 Jim Vollmer
X
Mutual of Omaha
Lifetime Benefits / Bob Mundlin
X
Unimerica
None
X
Jefferson Pilot Financial
Lifetime Benefits / Bob Mundlin
X
Standard Insurance Company
Lifetime Benefits / Bob Mundlin
X
Prudential Financial
Lifetime Benefits / Bob Mundlin
X
X
Fort Dearborn Life
Lifetime Benefits / Bob Mundlin
X
X
CIGNA
Lifetime Benefits / Bob Mundlin
X
X
Unum Provident
Lifetime Benefits / Bob Mundlin
X
X
LifeRe
Lifetime Benefits / Bob Mundlin
X
X
Benefit Management Admin (BMA)
Lifetime Benefits 1 Bob Mundlin
X
AdminOne Corporation
Summit Financial / Jim Vollmer
X
Spectera
Lifetime Benefits 1 Bob Mundlin
X
VSP
Lifetime Benefits 1 Bob Mundlin
X
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Dental Renewal/Proposed Rates
City of Southlake
Effective October 01, 2006
• This exhibit outlines your Renewal/Proposed Rates Effective October 01, 2006.
• Please refer to the Financial Conditions and Plan Design Exhibits for an outline of the level of benefits
quoted, as well as the terms and conditions of this proposal.
Policyholder Number - 57000
Group Number - 880600
FOC DMO /PPO
Coverage Categories
Current/Assumed
Employees
Current Rates
Proposed/
Renewal Rates
% Change
Employee
132
$24.89
$25.89
4.0%
EE +S Ouse
22
$50.84
$52.87
4.0%
EE+ Child(ren)
33
$60.32
$62.73
4.0%
J EE+FamlIy
52
$86.26
$89.71
4.0%
Month! Total
239
$10,880.04
$11,315.24
4A%
Premium Premium % Change
Monthly Totals 239 $10,880.04 $11,315.24 4.0%
Financial Conditions
Rates may be adjusted if:
• covered population changes by 15% or more; current enrolled lives are 79;
• legislation or regulation is enacted that affect the benefits payable, eligibility
or contractual provisions;
• there is any other material change in the condition under which the plan operates.
• Commissions payable to a broker or consultant change.
Terms:
• Rates include commissions of 4.4% of premium.
• For Voluntary plans, where permitted by state law, late entrant rules will be applied at
annual enrollment (i.e., no true "open enrollment') as well as throughout the year.
"Aetna' is the brand name used for products and services provided by one or more of the
Aetna group of subsidiary companies. PPO /PDN is underwritten by Aetna life insurance Company.
DMO is underwritten by Aetna life Insurance Company, except as follows: Arizona, Georgia: Aetna
Health Inc. California: Aetna Dental of Calif omia Inc. Maryland, Missouri, North Carolina, Texas:
Aetna Dental Inc. New.fersey: Aetna Dental Inc. and Aetna Life Insurance Company.
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