Item 4C AudioSO
UTHLAKE
Honorable Mayor and City Council. This presentation will cover Item 4C on the
August 7, 2012 City Council Agenda.
Item 4C
Approve a contract renewal with
United Healthcare to provide
employee dental benefits for Plan
Year October 1, 2012 to
September 30, 2013.
The purpose of this item to is to request City Council approval of a contract renewal
with United Healthcare to provide employee dental benefits for Plan Year October 1,
2012 through September 30, 2013.
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City of Southlake
Strategy Map
The (City of Southlake provides municipal services that support the highest quality of lifF
for our residents and businesses. We do this
by delivering outstanding value and
unrivaled quality in everything we do.
D e lliveron O urfocus
Areas
safety Quality
Mobility infrastructure ty
Ferfnershlps& Performance Managemen
Security Development
Volunteerism &Service Delivery
CL Achlevethe OPmvldeattracllve& Iff
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Approving the contract renewal with United Healthcare links to the City's strategy
map relative to the focus area of Performance Management and Service Delivery
and specifically to the corporate business objective of Attract, develop, and retain a
skilled workforce.
3
Background
• Current carrier
— 10/01/2010 - present
Bid insurance in 2010
• 2 plans: PPO and DHMO
( UnitedHealtheare
The City's current dental insurance carrier is United Healthcare. United Healthcare
has been the City's medical carrier since October 1, 2010 and dental insurance was
competitively bid in 2010. employees are offered two dental plan options: a
traditional PPO plan and a dental HMO (DHMO) plan. The City currently pays the
entire premium for employee only dental coverage and the employee pays the
entire dependent cost. You may recall the City's plan experienced high utilization in
the previous renewal period resulting in a claims ratio of 103 %. As a result, plan
modifications were implemented to contain costs.
Dental Claims Ratio
• Total Premium Paid Dental Premium Paid vs Claims Paid
$250,781 $2"Wo
$20.000 �- -
• Total Claims Paid:
$231,041
$to,�
• Claims Ratio:
0
92.1%
g
-i ' Oi �'�° F �'a PQ S 0
�Monthty Billed Prenbum tMOmthhyCIA!—
As part of the renewal process, United Healthcare provided the City with basic
claims data. The chart on the screen illustrates the premiums paid to United
Healthcare compared to the claims paid by United Healthcare. The red line on the
chart represents the claims United Healthcare paid each month while the blue line
represents the monthly billed premium. From October 2010 through April 2012
United Healthcare has paid $250,781 in claims and has collected $231,041 in
premiums from the City. This results in a 92.1 % claims ratio.
5
UHC Proposed Renewal
Industry
Trend
Premiums Claims
Paid Data
Renewal
Rate
• 0% Rate Increase
• No plan changes
In early June, the City received its dental insurance renewal from United Healthcare.
To calculate the renewal, United Healthcare reviewed the premiums paid, the claims
data and the industry trend. The renewal proposes maintaining the current plan
design for both plans with no rate increase.
M
Financial Considerations
• Estimated cost of dental insurance
premiums:
• Funding for dental insurance will be included
in the proposed FY 2013 budget.
The estimated cost of dental insurance premiums is $15,991 per month, or
$191,893 annually (combined City and employee premium contributions). There is
no estimated increase in costs for Fiscal Year 2013.
Funding for the proposed dental insurance plan costs will be included in the
proposed budget for Fiscal Year 2013.
7
Staff Recommendation
Approve a contract renewal with United
Healthcare to provide employee dental
benefits for Plan Year October 1, 2012 to
September 30, 2013.
Staff recommends City Council Approve a contract renewal with United Healthcare
to provide employee dental benefits for Plan Year October 1, 2012 to September 30,
2013.
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CITY 01i
SOUTHLAKE
Questions:
Stacey Black 817- 748 -8063
°o
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If you have any questions regarding this item, please contact me at 817 - 748 -8063.
Thank you.