Res. No. 143-06-12284RESOLUTION NO. 143-06-12284
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF SOUTH MIAMI, FLORIDA, AUTHORIZING THE CITY
MANAGER TO RENEW THE CONTRACT WITH AVMED
HEALTHCARE TO PROVIDE GROUP HEALTH INSURANCE FOR
CITY OF SOUTH NIIANII FULL TIME EMPLOYEES PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City's Agent of Record received the health insurance renewal rates for
AvMed wherein the carrier proposed a 3.7 % increase in premiums; and
WHEREAS, the Agent of Record recommended that we review all insurance carriers
that are currently on the market to ensure that we are being offered the most competitive rates;
and
WHEREAS, a Review Committee consisting of representatives from AFSCME, PBA,
Human Resources and general employees reviewed the proposals; and
WHEREAS, the Committee compared the insurance companies rates, benefit plan
designs, provider network as well as our previous claims experience /ratio; and
WHEREAS, after careful review, the Committee recommended renewing with AvMed
Health Care; and
WHEREAS, with the selection of AvMed Health Care, the designated Agent of Record
is Employee Benefits Consulting Group until contract expiration or until otherwise determined
by either party.
NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, THAT;
Section 1. The contract shall be effective October 1, 2006 and shall be renewable on an
annual basis.
Section 2. This engagement is at will and shall continue until either party terminates the
engagement by giving written notice to the other party. The City shall not be charged for Agent
of Record services; Employee Benefits Consulting Group shall be compensated by the insurer.
Section 3. This resolution shall take effect immediately upon approval.
PASSED AND ADOPTED this //z/ day of , 2006.
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SIGNATURES ON FOLLOWING PAGE
ATTEST: APPROVED:
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Res. No. 143 -06- 12284
CITY CLERK
READ AND APPROVED AS TO FORM:
CIT ,A-TTORNEY
Mayor Horace Feliu:
Vice Mayor Randy G. Wiscombe:
Commissioner Marie Birts:
Commissioner Velma Palmer:
Commissioner Jay Beckman:
C: Documents and Settings MothsteinVvly DocumenislReso- Orcllhealth insurance resolution 2006 -2007. doc
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South Miami
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�t o RxoA OFFICE OF THE CITY MANAGER
INTER - OFFICE MEMORANDUM 2 ° °'
To: The Honorable Mayor Feliu and Members of the City Commission
Via: Yvonne S. McKinley, City Manager
From: Jeanette Navarro, Human Resources tagger
Date: August 1, 2006 Item No.
Subject: Group Health Insurance
Request: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF SOUTH MIAMI, FLORIDA, AUTHORIZING THE
CITY MANAGER TO RENEW THE CONTRACT WITH AVMED
HEALTHCARE TO PROVIDE GROUP HEALTH INSURANCE
FOR CITY OF SOUTH MIAMI FULL,. TIME EMPLOYEES
PROVIDING AN EFFECTIVE DATE.
Reason/Need: The current contract with AvMed Healthcare for group health insurance for City
of South Miami employees ends on September 30, 2006. In order to ensure that
there is not a lapse in coverage, the City needs. to contract healthcare coverage
for the 2006 -2007 FY.
We have received renewal rates from our current group health insurance carrier,
AvMed, wherein they quoted a 3.7 % increase. in premiums from current rates.
Although, the increase was much lower that the projected 16 % increase, the
Agent of Record recommended that we seek bids from other carriers to ensure
that we are being offered competitive rates. Our Agent of Record solicited bids
from eight companies. Bids were received from the following companies
(highest to lowest rates):
Blue Cross
United Health Care -
Cigna
NHP
Vista
AVMED
Humana
The Committee consisted of representatives from AFSCME, PBA, Human
Resources Department and general employees. Several factors were considered
in determining that we should renew with AVMED. The Committee was
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responsible for analyzing each plan, specifically reviewing areas such as benefit
plan design, rates, and the provider directory. Another factor that was analyzed
was whether they looked at claims experience /ratio when calculating insurance
premiums. This is an important factor when selecting a carrier because most of
the carriers, except for AvMed, base their quotes on the claims ratio. This means
that if in one year our claims experience /ratio is high, our rates will go up between
15% to 40% the following year.
Although Humana was the lowest bid received ($319.67), the concern was the
possibility of the rates going up the following year due to our claims experience.
This year there was a 133.4% loss ratio with AvMed (for every $1.00 of premium,
AvMed paid $1.33 in claims). It was also noted that changing from one carrier to
another would make it difficult to find companies to bid on the City's health
insurance.
Based on all the information reviewed, the Committee recommended renewing
with AvMed Health Care, Option 2 - $344.79 per employee /per month.
Backup Documentation:
Insurance proposals
Comparison of other Municipalities
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