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A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF POMPANO BEACH, FLORIDA, APPROVING AND AUTHORIZING THE PROPER CITY OFFICIALS TO EXECUTE AN ANNUAL ACCOUNTING AND RETENTION AGREEMENT (PROSHARE) AMONG BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC., HEALTH OPTIONS, INC. AND THE CITY OF POMPANO BEACH; PROVIDING AN EFFECTIVE DATE.
(Fiscal Impact: $596,743 is the approximate project increase.)
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(Staff Contact: Ed Beecher)
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Summary Explanation/Background:
Pursuant to the labor contracts with the City's labor unions, the City is required to provide major medical group health benefits to all full time employees. The City's current provider, Blue Cross/ Blue Shield of Florida, Inc., (BCBS), has provided these services since FY 2000 and has demonstrated excellent service to the City and plan members. A Request for Proposal (RFP) was received in July, 2010, and Blue Cross/Blue Shield of Florida, Inc. was selected as the most responsive bidder and awarded the bid. In September, 2013, the program was reviewed and the City Commission approved the renewal and continuation of the current program. We have reviewed the feasibility of placing this coverage out for RFP, however, do not believe it is in the best interest of the City to do so. A comparison of premium costs of local governmental agencies - Exhibit I, showing that the City is currently receiving an excellent level of benefits for the premium paid, taking into consideration the renewal, our City’s claims experience and demographics. Additionally, the proposed renewal is below the South Florida annual medical trend increase for medical and prescription programs which is estimated at 10%.
BCBS has provided the City with confirmation of a 7.9% rate increase (PPO and HMO) and NO increase in the cost for dental, with NO change in the level of coverage, deductibles or co-payments. A summary of the renewal rates are attached as Exhibit II. Additionally, the City will receive a one-time payment during this policy year of $100,000, to be used towards the City’s employee wellness initiatives. Further, since the City will continue its “ProShare” agreement with BCBS, which allows the City to be eligible for an additional reimbursement type payment from BCBS, based on the City’s claim experience during the term, with a final calculation made at the end of the upcoming policy period 9/30/17, and paid within the next policy period, usually in the February timeframe of the following year. With this current renewal, the City will be eligible for the mentioned ProShare payment and will be enrolled to extend the ProShare terms for three years. As an example, in March 2014, the City received a payment of $405,302 from the last ProShare agreement ending in 2013. Overall renewal is based on a one-year term, with the City having the option to extend based on performance and rates, as determined by the City.
Origin of request for this action: Human Resources / Risk Management Department
Fiscal impact and source of funding: Funds have been allocated in the FY 16-17 budget process for this purpose. Cost will increase for health coverage portion by 7.9%; no increase in the cost of dental coverage. Employee contributions towards family coverage will increase by the blended percentage calculation or 7.5%. The City will receive a one-time payment of $100,000 towards the City's employee wellness program and be eligible for the ProShare payment from BCBS at the end of the ProShare term.
Health Insurance Accounts 505-55-10-596-45.10 (HMO) and 505-55-10-596-45.11 (PPO).