Broken Arrow City Council
Meeting of: June 20, 2022
Title:
title
Approval of and authorization to execute a Stop Loss renewal with US Fire for fiscal year 2022-2023
End
Background:
The City's broker for health insurance services has gone out for bid on stop loss coverage for employee health insurance. Stop loss coverage is an additional layer of protection for catastrophic or unpredictable losses. Stop loss coverage is purchased by employers who are self-insured under the employee benefit plan, but do not want to assume 100% of the liability for losses arising from the plan.
Bids were received back from US Fire (current provider), American National, and Granular. The following providers declined to quote for the following reasons:
The City of Broken Arrow currently carries a $125k individual specific deductible for stop loss. At each renewal, the stop loss carriers review diagnoses and claims detail to assess any potential high- risk claimants that may exceed the stop loss deductible threshold in the coming year.
At that time, the carriers reserve the right to increase the individual specific deductible to the plan for any unique individual member(s) with trigger diagnoses that could potentially exceed the base deductible of $125k.
* Laser Liability Considerations. After considering laser liability across all carriers, the incumbent (US Fire) represented the lowest probability of potential liability overall.
o All carriers applied some conditional laser liability should certain procedures be performed on specific members, but the firm projected laser liability was lowest with the incumbent at $600k and others up to $1.2mm-$1.5mm.
* Total Cost and Laser Liability Considerations. The current total cost and laser liability today are projected at $2,110,526. The US Fire renewal is projecting total costs and new laser liability to be $2,170,200, for $59,675 in additional expected liability potential. Comparatively, the other carriers were projecting...
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