Item 4CITEM 4C
15CITY OF
SOUTHLAKE
MEMORANDUM
August 2, 2013
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, 2013 to September 30, 2014.
Action
Requested: Approve a contract renewal with United Healthcare to provide
employee dental benefits for Plan Year October 1, 2012 to September
30, 2014.
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.
In early June, the City received its dental insurance renewal from UHC.
UHC's renewal proposes no increase to the current premium structure
and maintains the current benefit plan designs.
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 premium. Since
October 1, 2010, UHC
has collected $438,437
in premiums and has
518,000
$16,000
$14,000
512,000
$10,0u0
Aow
$6,000
$4,000
Dental Premium Paid vs Claims Paid
ed ei ti rl rl .y ei N N � N N N N 1�ry, N rl .-I M � � m
O o 0 0 0 0 0 0 0 0 O O O o 0 0 0 0 O O O D O 0 O
N N N N N ry ry ry N N N N N N N N N n N N ry ry ry
4 -- S� O Z O - g a 3 a- O Z❑ - g¢
+Monthly Billed Premium -t—Monthly Claims
Shana Yelverton, City Manager
August 2, 2013
Page 2
paid $357,431 in claims, resulting in a claims ratio of 81.5%.
ITEM 4C
To calculate the renewal, UHC reviewed the premiums paid, the claims
data and the industry trend. 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 $17,060 per
month, or $204,717 annually (combined City and employee premium
contributions). There is no estimated increase in costs for FY 2014.
The proposed dental insurance plan costs will be included in the
proposed budget for Fiscal Year 2014.
Strategic Link: Performance Management and Service Delivery: attract, develop and
retain a skilled workforce. CBO2: Become an employer of choice by
developing a plan to recruit, develop and retain employees committed
to excellence.
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, 2013 to September
30, 2014.
A Renewal Presentation for
City of Southlake TX
Issued on: May 30, 2013
UnitedHealthearer
Customer Name:
Renewal Effective Date:
Policy Number:
Dental Renewal Rates & Plan Designs
City of Southlake TX
10/1/2013
730063
Periodic Oral Evaluation 100% 100% See Copay Schedule
Radiographs 100% 100%
Lab and Other Diaanostic Tests 100% 100%
Dental Prophylaxis (Cleaning)
Fluoride Treatment
Sealants
Space Maintainers
Restorations (Amalgams or Composite)
Emergency Treatment / General Services
Simple Extractions
:or
100%
100% See Copay
Schedule
100%
100%
100%
100%
100%
80%
100%
80%
Schedule
80%
80%
80%
80% See Copay
Services
Oral Surgery (incl surgical extractions)
Periodontics
Endodontics
Inlays/Onlays/Crowns
Dentures and Removable Prosthetics
Fixed Partial Dentures (Bridoes)
50%
50%
50%
50%
50%
50%
50%
50%
Schedule
50%
50% See Copay
50%
50%
Orthodontia
Orthodontia Eligibility
50%
1 50%
See Copay
I 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
Current
Proposed
Current
Proposed
Tier
Employee
Employee + Spouse
Employee + Child(ren)
Employee + Family
Monthly Premium
Annual Premium
Renewal Action
Enrollment
144
26
47
60
277
$37.89
$37.89
$13.33
$13.33
$75.78
$75.78 $24.91
$24.91
$84.31
$84.31 $22.65
$22.65
$128.38
$128.38 $32.51
$32.51
$16,215.70
$16,215.70 $844.01
$844.01
$194,588.401
0.0%
$194,588.40 $10,128.121
0.0%
$10,128.12
" 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.
Dental Assumptions
Rates are effective from October 01, 2013 through September 30, 2014.
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 greater of eligible 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.
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 United Healthcare, and its related entities, and may not be copied, used, distributed or disclosed without prior
written consent from an authorized representative of United Healthcare, other than is necessary to evaluate this proposal.