2003_1020_packet - Laserfiche WebLink

Home

OIN Request for Council Action Date: 10/20/03 Item Number: X1, C Department Approval Manager Approval Agenda Section Item Description: 2004 Dental Insurance Contract Background: Consent The City of Roseville contract for dental insurance will expire on December 31, 2003. The current carrier Fortis DHA Premier has come in with a renewal that includes a 24% increase for 2004. Therefore, staff issued an RFP and received responses from four companies. According to surveys conducted in the July feedback found that employees were not real satisfied with Fortis dentals network and staff has had some administrative and claims issues. This along with the 24% increase at renewal even though the loss ratio of claims to premium is at 80% in 2004 has resulted in the recommendation that follows. In analyzing the loss ratio to premiums paid over the last 5 years staff concluded that their was a potential for self insuring this benefit and seeing some savings in expenses. The City will assume the out of pocket risk of $1,000 per contract member and pay an administrative fee to the provider of 23.3% of claims paid and adjusted annually. Please see figures below. Year Premium Claims Overage 1999 $29,595 $27,638 $1,957 2000 $35,748 $31,342 $4,406 2001 $45,037 $38,535 $6,502 2002 $48,552 $38,053 $10,499 2003(Jan trough August) $35,927 Anticipated Claims $31,956 Not Determined Yet Typical utilization on dental insurance is pretty stable except in the first year offering the plan due to claims related to having no prior coverage and treatments that waited. In moving toward a self insured plan two bids were received in this arena. The Delta dental plan relieved the most benefit to City of Roseville in that they have the largest network and the greatest discount in the metro area, they are a known provider to the City as the City was with them prior to the move to Fortis in 2003, and they came in with the lowest increase at 3% which is more for family however due to the addition of the single plus one tier. Policy Implications: The City currently provides dental insurance contracts to 57 on single and 63 on family. Employees assume the total cost of family dental insurance premiums and the City assumes the cost of the single plan through the cafeteria contribution as other cities do. In 2004 the premiums for single increase by 65 cents per month, those moving to single plus one will see savings of $13.39 per month, and those on the family will pay $9.23 more per month. Premium calculations are as follows: