HomeMy WebLinkAbout1996-06-10 96-277 ORDERCOUNCIL ACTION
Date: 6-10-96 Itmn No. 96-277
Item/Subject: ORDER, Authorizing the City Managar to Exacuts an
Agreement with Blue Cross/Blue Shield of Maine for
Group Health Insurance Coverage July 1, 1996
through June 30, 1997
Responsible Department; Administration
Conalentary: - In response to a Request for Proposals, the City received
three proposals for self-insured group health i a
e plana, a well
as a proposal from the Maine Municipal Association Health Trust.During
the same time, Blue Cross -Blue Shield of Maine provided the City with
its renewal rate for. only 1, 1996 reflecting a 49 increase
n bath the
Traditional and Health Maintenance Organization (HNO)Health Plans.
After review and analysis, the City's Health Insurance Consultant and
City staff involved ireviewing
Cc
the submissions, recommend that the
City continue having Blue Shield of Mine provide group
health insurance crage for the year commencing July 1, 1996. The
group consists ofa a 725 participants including active employees of
the City, Library and the Housing Authority as
well as retired
employees who elect to continue coverage at their cost.
The attached Order will authorize the City Manager toexecute the
standard agreement between the City and Blue Cross -Blued Maine.
lr . d tw
DEPARTMENT HEAD
Manager's Casements:
Reviewed and recommended by the Finance Committee meeting on gone 3,
1996.
aim
CZTY MANAGER
Associated Information:
Order, 5-31-96 Memo
Budget Approval:
O FINANCE OZAFPTOR
Legal Approval:
T
_Introduced Ebr
passage
First Reading Page_oP_
_ Referral
96-2A
Amigmd to Counedorssoucy June 10, 1996
CITY OF BANGOR
(TITLE.) (or11er authorising_ the City manager to Execute an
+.__..._._ .. _.._.
Agreement with Blue Cross -Blue Shield of Maine for Group Health
Insurance Coverage July 1, 1996 through June 30, 1997
By Aw aly Cosa! sfB Caw of House:
ORDERED,
THAT
the City Manager is hereby authorized to execute
an Agreement with Blue Cross -Blue Shield of Maine for Group
Health Insurance Coverage effective July 1, 1996 through June 30,
1997, said Agreement to include all aspects of the group
healthcare plan including the Blue Cross -Blue Shield Indemnity
(Traditional) Plan, the Health Maintenance Organization (HED)
Plan and the Major Medical Plan.
IN CITY COUNCIL
June le, 1996 96-2I7
Passed 0 R D E R
CITY CL6AK Title, Authorizing the City Manager to
Execute an Agreement with Blue Crass -
Blue Shield of Me1ne far G a Health
..........'664e
.... e0....................
Insurance Coverage July 1, 1996 through
June 30, 1997
Assigned to Afs�p/
......{................
Councilman
96-277
To: Finance Committee Members
From: Robert W. Farrar, Director of Administration and Human
Resources
Subject: Group Health Insurance Coverage and Rates for FY97
Date: May 31, 1996
i. Health Insurance Coverage
Anticipating another large increase in health insurance
premiums for FY97, staff recommended to the Finance
Committee that the City take proposals on self-insured
health plans during the time that Blue Cross -Blue Shield was
preparing our insurance rates for July 1, 1996.
Three self-insured proposals were received as well as a
proposal for a group plan administered by the Maine
Municipal Association. During this time, Blue Cross -Blue
Shield also provided the City with new rates effective July
1, 1996. Those rates reflected a 4% increase for the
Traditional Plan and the HMO Optional Plan.
City staff including the City Manager, Finance Director,
Director of Administration and Human Resources, and
Purchasing Agent, met with Mr. Kim Crossman of Benefit
Services (the City's Health Insurance Consultant) and
reviewed all four Options available. After considerable
review and analysis, it was the strong opinion of those
involved that the City should stay with Blue Cross -Blue
Shield of Maine for the 1996-97 year. This decision was
reached primarily based on the fact that Blue Cross -Blue
Shield c with an extremely competitive rate and that
conversion from BC/BS to a self-insured third party
administrated plan would take considerable time to develop
and implement. Blue Cross has also agreed to meet with the
City on an on-going basis to address concerns raised by the
City concerning pricing and other plan issues.
While we are recommending continuing with Blue Cross/Blue
Shield for the next year, we also believe that the concept
of a self-insured third party administered plan should
continue to be explored and evaluated. Given the rapidly
changing area of health insurance, there may be
opportunities for future consideration of this concept.
2. Health Insurance Rates
During the first week in June each year, the City provides
its employees with the health insurance rates and cost
96-277
sharing formulas for the year beginning July 1st. This
information is critical to employees as June is open
enrollment month and is the only time during the year that
they can change health insurance plans.
Last year, a new cost sharing formula was devised which
served as the basis for the amounts to be paid by the City
and by participating non -unionized employees. The formula
was developed as follows:
Family
Emolove,
75.09
got,
T,ed,t,on.
Emoloyee
25.Ot
Pct.
Total
1008
Single Parent
77.58
22.58
1008
Single
Mot
20.04
100$
i19
0.01
100.01
1008
Staff would recommend that this formula be continued for the July
1, 1996 -June 30, 1999 year for non -unionized employees. With the
48 increase, this would mean that the family plan total cost
would increase $4.52 per week, with the employee picking up S1.13
of the increase and the City picking up $3.39. As committee
members may recall, last year moving to the formula essentially
meant a 50-50 split of the 288 increase, resulting in employees
n the family plan moving from a $1900/week paymentto a
$29.00/week payment, or a $12.00 per week increase.
Mr. Crossman will be in attendance to further discuss the health
insurance coverage matter, and Staff will be prepared to discuss
both topics at the Committee meeting.
Should there be any questions concerning these two topics prior
to the Finance Committee meeting, please feel free to contact me
directly.
RWF/1dr