Item 4GITEM 4G
CITY OF
SOUTHLAKI
MEMORANDUM
July 30, 2014
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, 2014 to September 30, 2015.
Action
Requested: Approve a contract renewal with United Healthcare to provide
employee dental benefits for Plan Year October 1, 2014 to September
30, 2015.
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 last 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 Premium Paid vs Claims Paid
renewal from UHC. As part of°°°°
the renewal process, UHC
provided the City with basic
claims data. The chart to the 5100°
right illustrates the premiums 5==�
paid to UHC compared to the
claims paid by UHC. The gold
line on the chart represents
the claims UHC paid each
month while the blue line
represents the monthly billed 56�
premium. In the last twelve
months, UHC has collected �aemm �p
$222,776 in premiums and
has paid $169,123 in claims, resulting in a claims ratio of 76%.
To calculate the renewal, UHC reviewed the premiums paid, the claims
data and the industry trend. UHC's renewal proposes a 4% increase
Shana Yelverton, City Manager
July 30, 2014
Page 2
ITEM 4G
to the PPO plan, no increase to the DHMO plan and maintains the
current benefit plan designs for each
plan. The table on the right displays
the historical plan increase
information. This is the first rate
increase to the plan since 2012.
Based upon a review of claims data
since October 1, 2010, staff believes
this renewal is favorable.
Plan Year
2011-2012
Renewal
Increase
9.9%
2012-2013
0%
2013-2014
0%
2014-2015
Proposed 4%
Financial
Considerations: The estimated cost of dental insurance premiums is $19,265 per
month, or $231,176 annually (combined City and employee premium
contributions). The annual estimated increase in the City's portion of
dental insurance premiums is $4,986 for FY 2015.
The proposed dental insurance plan costs will be included in the
proposed budget for Fiscal Year 2015.
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, 2014 to September
30, 2015.
CITY OF SOUTHLAKE
Issued on: June 17, 2014
UnitedHealthearer
CITY OF SOUTHLAKE Dental Renewal
Effective Date: October 1, 2014
Dental Services
Legal Entity
Diagnostic Service
Passive PPO
P6821
CS1
U n ited Healthcare Insurance Company
Primary Plan
In Network Out of Network
Periodic Oral Evaluation
100%
100%
Radiographs
100%
100%
Lab and Other Diagnostic Tests
100%
100%
Preventive Services
Dental Prophylaxis (Cleaning)
100%
100%
Fluoride Treatment
100%
100%
Sealants
100%
100%
Space Maintainers
Basic Services
100%
100%
Restorations (Amalgams or Composite)*
80%
80%
Emergency Treatment/General Services
80%
80%
Simple Extractions
Major Services
80%
80%
Oral Surgery (inci. surgical extractions)
50%
50%
Periodontics
50%
50%
Endodontics
50%
50%
I n lays/O n lays/Crowns
50%
50
Dentures and Removable Prosthetics
50%
50%
Fixed Partial Dentures (Bridges)
Orthodontic
50%
50%
Orthodontia
50%
50%
Orthodontia Eligibility
Adult & Child
Deductible
$50/$150 $50/$150
Deductible applies to Prev. & Diag.
No No
Annual Max
$1,500 $1,500
Lifetime Ortho Max
$1,500 $1,500
Waiting Period applies
No No
Out of Network Basis
UCR 85th
PPO Network
Options PPO 30
CMM—Annual Roll -Over
Yes
Assumed Enrollment and Rates
Employee
Current Renewal
131 $37.89 $39.39
Employee + Spouse
23 $75.78 $78.78
Employee + Child(ren)
41 $84.31 $87.65
Employee + Family
45 $128.38 $133.46
Monthly Premium
,Annual Premium
Renewal Action
240
$15,940.34 16J
0:
4.0%
Employer Contribution
Contributory
Participation Requirements
75% of Eligible Employees
Dependent Children Coverage
To Age 26
Contract Basis
Fully Insured
Exclusions and Limitations
Standard
Broker Commissions
Standard Graded
Rate Guarantee
12 Months
CITY
DMO
D0420
National Pacific DePrimary Plan
ntal, Inc. Network Out of Network
OF SOUTHLAKE Dental Renewal
Effective Date: October 1, 2014
Dental Services
Legal Entity
Diagnostic
I
Periodic Oral Evaluation
See Copay Schedule
Radiographs
Lab and Other Diagnostic Tests
Preventive Services
Dental Prophylaxis (Cleaning)
See Copay Schedule
Fluoride Treatment
Sealants
Space Maintainers
Basic Services
Restorations (Amalgams or Composite)*
See Copay Schedule
Emergency Treatment/General Services
Simple Extractions
Oral Surgery (incl. surgical extractions)
Periodontics
Endodontics
Major Services
n lays/O n lays/Crowns
See Copay Schedule
Dentures and Removable Prosthetics
Fixed Partial Dentures (Bridges)
Orthodontic
Orthodontia
See Copay Schedule
Orthodontia Eligibility
Deductible
See Copay Schedule
Deductible applies to Prev. & Diag.
Annual Max
Waiting Period applies
Out of Network Basis
CMM—Annual Roll -Over
No
Assumed Enrollment and Rates
Employee
Current Renewal
19 $13.33 $13.33
Employee + Spouse
7 $24.91 $24.91
Employee + Child(ren)
10 $22.65 $22.65
Employee + Family
10 $32.51 $32.51
Monthly Premium
Annual Premium
Renewal Action
46
$979.24 $979.24
$11,750.88 $11,750.88
0.0
Employer Contribution
Contributory
Participation Requirements
75% of Eligible Employees
Dependent Children Coverage
To Age 26
Contract Basis
Fully Insured
Exclusions and Limitations
Standard
Broker Commissions
Standard Graded
Rate Guarantee
12 Months
CITY OF SOUTH LAKElAssumptions
- We reserve the right to change rates and/or plan provisions if the number of lives or volume of insurance
change by more than 10% before, on, or after the effective date listed above or if factors used to generate this
quote such as group demographics or effective date are changed, found to be incomplete or incorrect.
- Rates assume no changes in legislation or regulation that affects the benefits payable, eligibility or contract.
- Rates assume standard administrative services including Claims & Data processing, Enrollment & Billing,
Customer Service, Case Management, Provider Relations, and Reporting.
- Assumed contract situs is Texas.
- Employees must be U.S. citizens or residents regularly working and living in the U.S. Coverage for U.S.
citizens working outside of the U.S. must be approved in writing by us. Approval depends on locale and length
of assignment.
- Employer's assumed primary business is classified as 9111.
- Rates may increase on renewal in accordance with the terms of the policy.
The Dental and/or Vision premium includes expenses related to state & federal taxes, fees, and assessments.
It may also include additional new taxes, fees and assessments from the Affordable Care Act.
Rates listed above assume the plan designs quoted. Rates may change, if plan design changes.
Our contract covers only those procedures performed in the United States.
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.
Please contact your sales representative for more details on the network quoted in your proposal.
The In- and Out -of -Network Plan Deductibles, Maximums and Lifetime Ortho Maximums are combined.
Participation in qualifying dental and vision plans must be 75 percent or greater of eligible medical employees
for Packaged Savings to be activated.
* Please contact your sales representative to confirm specific plan Restorations (Amalgams or Composite)
coverage.
Please note that the summary of benefits in this document provides a brief description of coverage. State
mandates may preclude certain benefit plan design features. This is not a policy, certificate of insurance or
coverage document. For complete details on coverage, exclusions, limitations and the terms under which
coverage may continue, please contact your sales representative.
CITY OF SOUTH LAKEIDisclaimers
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.