Item 4CITEM 4C
CITY OF
SCOUTH LA K
MEMORANDUM
August 2, 2012
TO: Shana Yelverton, City Manager
FROM: Stacey Black, Director of Human Resources
SUBJECT: Approve a contract renewal with United Healthcare to provide employee
dental benefits for Plan Year October 1, 2012 to September 30, 2013.
Action
Requested: Approve a contract renewal with United Healthcare to provide
employee dental benefits for Plan Year October 1, 2012 to September
30, 2013.
Background
Information: The City's current dental insurance carrier is United Healthcare.
United Healthcare (UHC) has been the City's dental carrier since
October 1, 2010 and dental insurance was competitively bid in 2010.
Employees are offered two plan options a traditional PPO plan and a
dental HMO 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.
In early June, the City
received its dental
insurance renewal
from UHC. As part of
the renewal process,
UHC provided the City
with basic claims data.
The chart on the right
illustrates the
premiums paid to UHC
compared to the
claims paid by UHC.
The red line on the
chart represents the
claims UHC paid each
month while the blue
line represents the
monthly billed
$25,OW
$20,WO
$15,000
$10,OW
$5.000
$0
y p g °ti 'Nl� yap Z�v g c� °1 j °y ,�� ° �y� °~ AN N N % t.,qN� t
—s.—Monthly Billed Premium Monthly Claims
Dental Premium Paid vas Claims Paid
Shana Yelverton, City Manager
August 2, 2012
Page 2
ITEM 4C
premium. Since October 1, 2010, UHC has collected $250,781 and
paid $231,042 in claims, resulting in a claims ratio of 92.1%.
To calculate the renewal, UHC reviewed the premiums paid, the claims
data and the industry trend. The renewal proposes maintaining the
current premium structure and benefit plan designs. Based upon a
review of claims data since October 1, 2010, this renewal is favorable.
Financial
Considerations: 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 FY 2013.
The proposed dental insurance plan costs will be included in the
proposed budget for Fiscal Year 2013.
Strategic Link: Performance Management and Service Delivery: attract, develop and
retain a skilled workforce.
Citizen Input/
Board Review: N/A
Legal Review: N/A
Alternatives: Deny contract with United Healthcare and seek alternative options.
Supporting
Documents: The following supporting documents are attached:
• United Healthcare Dental Renewal
Staff
Recommendation: Approve a contract renewal with United Healthcare to provide
employee dental benefits for Plan Year October 1, 2012 to September
30, 2013.
A Renewal Presentation for
City of Southlake
Issued on: May 25, 2012
UnitedHealthearer
Dental Renewal & Rates
Customer Name: City of Southlake
Renewal Effective Date: 10/1/2012
Policy Number: 730063
Dental
.-
Periodic Oral Evaluation
Radiographs
Lab and Other Diagnostic Tests
100%
•
100%
•
See Copay Schedule
100%
100%
100%
100
Preventive Services
Dental Prophylaxis (Cleaning)
Fluoride Treatment
Sealants
Space Maintainers
100%
100%
See Copay Schedule
100%
100%
100%
100%
100%
100%
Basic Services
Restorations (Amalgams or Composite)
Emergency Treatment / General Services
Simple Extractions
1 80%
80%
1 80%
80%
80%
80%
See Copay Schedule
Major Services
Oral Surgery (incl surgical extractions)
Periodontics
Endodontics
Inlays /Onlays /Crowns
Dentures and Removable Prosthetics
Fixed Partial Dentures (Bridges)
Orthodontic
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
See Copay Schedule
50%
50%
Orthodontia
Orthodontia Eligibility
50%
50%
See Copay Schedule
Adult& Child
Deductible
Deductible applies to Prev. & Diag.
Annual Max
Lifetime Ortho Max
Waiting Period applies
Out of Network Basis
CMM- Annual Roll -Over
$50/$150 $50/$150
No No
See Copay Schedule
$1,500 $1,500
$1,500 $1,500
No
UCR 85th
Yes
Tier Enrollment
Employee 113
Employee + Spouse 25
Employee + Child(ren) 35
Employee + Family 45
Monthly Premium 218
Annual Premium
Renewal Action
Rates
Current
Proposed
Enrollment
22
Rates
Current
Proposed
$37.89
$37.89
$13.33
$13.33
$75.78
$75.78
10
$24.91
$24.91
$84.31
$84.31
14
$22.65
$22.65
$128.38
$128.38
7
$32.51
$1,087.03
$32.51
$1,087.03
$14,904.02
$14,904.02
53
$ 1 78,848.241
0.0%
$178,848.24
$13,044.36
1 0.0%
$13,044.36
The numbers above are on an illustrative basis. Rates are subject to Underwriting approval.
High level benefit summary. Please see your plan summary for more detailed benefit description.
The rates quoted here are based on the following assumptions. Changes to these assumptions may result in an adjustment to rates or revocation of the quote.
Rates are effective from October 01, 2012 through September 30, 2013.
United Healthcare reserves the right to adjust the above rates should enrollment fluctuate by +/- 10 %.
Employer -paid plans require an employer contribution level of 50 percent or greater. Participation in qualifying dental and vision plans must be 75 percent or grey
medical employees for Packaged Savings to be activated.
The In- and Out -of- Network Calendar Deductibles, Maximums and Lifetime Ortho Maximums are combined.
Quote assumes standard Exclusions and Limitations.
Rates include Standard broker commissions.
Assumed contract situs is TX.
Rates listed above assume the plan designs quoted. Rates may change, if plan design changes.
Rates are guaranteed for 12 months.
Rates assume no changes in legislation or regulation that affects the benefits payable, eligibility or contract.
Dependent children are covered to 26.
One or more of these plan design offerings include the MaxMultiplier benefit.
Some of the unused portion of your annual maximum may be available in future periods
This proposal is valid for 90 days from the issued date, unless otherwise noted within this document.
Brokers and agents may receive commissions, bonuses and other compensation for selling the products presented in this proposal. The cost of this
compensation may be directly or indirectly reflected in the premium or fees for those products. Contact your broker and /or agent if you have questions
regarding their compensation relating to products in this proposal.
This proposal is subject to negotiation and execution of a written agreement, which will supersede the proposal contents. This proposal does not
constitute an agreement, and is based on assumptions made from the written information in our possession and provided by you. We retain the right to
modify our proposal if the information upon which this proposal is based is changed or is supplemented.
We consider much of the information contained in the proposal to be proprietary or otherwise confidential, and are releasing this proposal to you on the
understanding that you and your representatives will only use it, and any data included in the proposal, for the specific purpose of evaluating its content
If this is not consistent with your understanding, please notify us before reviewing the proposal.
In addition, by accepting and reviewing the contents of this proposal, you and your agents or other designees agree, to the extent permitted by law, that
certain information contained herein, or other information provided to you in connection with this proposal response or associated request for proposal
(RFP), is proprietary and /or confidential to UnitedHealthcare, and its related entities, and may not be copied, used, distributed or disclosed without prior
written consent from an authorized representative of UnitedHealthcare, other than is necessary to evaluate this proposal.