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HomeMy WebLinkAbout~Master - Renewal of Health Insurance Administrative Services Agreement RESOLUTION NO. 21-305 RESOLUTION APPROVING RENEWAL OF HEALTH INSURANCE ADMINISTRATIVE SERVICES AGREEMENT FOR THE CITY OF AMES WHEREAS, for the past 16 years,the City has contracted with Wellmark Blue Cross Blue Shield of Iowa to provide health insurance administration and excess insurance coverage; and, WHEREAS, in that time, Wellmark has provided good customer service and has had a commendable record of accurate and timely claims payments; and, WHEREAS, Wellmark also has advantageous contractual relationships with medical providers in Ames and throughout Iowa that allow the City to receive significant discounts on services received; and, WHEREAS,Wellmark has a proven record of being able to administer the existing plans and has been a willing and capable partner in the City's efforts to improve the health status of employees and their families through quality programs and health promotion; and, WHEREAS, effective July 1, 2021,Wellmark will charge $49.11 per employee per month in administrative and access fees for a yearly total of$328,841 (this is an increase of 2.3% over 2020/21); and, WHEREAS, the individual stop loss protects the City from specific claims that exceed $125,000 incurred in one year, while the aggregate stop loss protects the City in the event total claims exceed 120% of projected losses; and, WHEREAS,effective July 1,2021,Wellmark will charge$105.65 per employee per month of specific and aggregate stop loss premium (this is a 24% increase over 2020/21), and in FY 2021/22 the City will pay$707,432 in specific and aggregate stop loss premiums; and, WHEREAS, the request before the City Council is to approve the terms of service for the administrative and access fees and stop loss premiums, which are estimated to cost a total of $1,036,273, and expenses paid will reflect the actual number of employee members on the Plan throughout the year; and, WHEREAS, the overall change (increase) for health care costs, including FY 2021/22 projected claims and all of the Wellmark administrative fees, is estimated at 5.7% for FY 2021/22 (a total of approximately$9,729,276); and, WHEREAS,the FY 2021/22 budget included a 5%increase for health insurance premiums; the increase incorporated into the budget was intentionally set to be slightly less than the anticipated 5.7%expense increase to allow a portion of the available Health Insurance Fund balance to be drawn down; and, WHEREAS,the required contribution from the Health Insurance Fund balance is projected to result in a net reduction of the fund balance of$242,449 in FY 2021/22 and the ending fund balance for FY 2021/22 is therefore,projected to be $5,843,413. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the renewal documents with Wellmark Blue Cross Blue Shield of Iowa for administrative services, specific and aggregate excess insurance, and access fees for health care benefits effective July 1, 2021, through June 30, 2022, are hereby approved. ADOPTED THIS 8`'day of June, 2021. Diane R. Voss, City Clerk John A. Haila, Mayor Introduced by: Corrieri Seconded by: Betcher Voting aye: Beatty-Hansen, Betcher, Corrieri, Gartin, Junck, Martin Voting nay: None Absent: None Resolution declared adopted and signed by the Mayor this 81'' day of June, 2021.