Title
Consider a memorandum/resolution awarding RFP 25-02 to Blue Cross and Blue Shield of Texas (BCBSTX) for an excess risk policy (stop loss insurance) for medical and pharmacy claims under the City health insurance plan, effective October 1, 2024, in the amount of $902,819.
Body
DATE: September 17, 2024
TO: Kent Cagle, City Manager
FROM: Eva Bark, Executive Director of Human Resources
SUBJECT: AWARD RFP 25-02 FOR AN EXCESS RISK POLICY (STOP LOSS INSURANCE) FOR MEDICAL AND PHARMACY CLAIMS UNDER THE CITY HEALTH INSURANCE PLAN WITH BLUE CROSS AND BLUE SHIELD OF TEXAS IN THE AMOUNT OF $902,819.
BACKGROUND AND FINDINGS:
On June 11, 2024, Council approved Blue Cross Blue Shield of Texas (BCBSTX) as the City’s Group Employee Medical and Pharmaceutical benefit provider, effective October 1, 2024. The City will need to purchase stop-loss insurance in the event of high claims to support the self-insured health care and pharmaceutical plan in FY 2025.
Stop-loss insurance protects the City against catastrophic or unpredictable losses. The City of Killeen will protect its plan with both specific and aggregate stop-loss coverage. Specific Stop-loss protects the City against a high claim on any one individual. Aggregate stop-loss provides a ceiling on the dollar amount of expenses that the City would pay, in total, during a contract period.
In partnership with the City’s Employee Benefits Consultant, Lockton Dunning, on July 8, 2024, the City initiated a Request for Proposal (RFP) for firms experienced in stop-loss insurance coverage for the City of Killeen employees and retirees. Staff received and reviewed a proposal from BCBSTX, ($902,819), the sole bidder. The review and evaluation of the proposal were based on product offerings, the reputation of the vendor, and cost savings for the City and the employees.
After a thorough analysis of the stop-loss insurance proposal and option, staff recommends entering into an agreement with BCBSTX for the plan year 2025 for a term of one year in the amount of $902,819. Stop-loss insurance with BCBSTX provides cost-effective insurance for the City.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
Staff recommends the City award RFP 25-02 to BCBSTX for stop-loss insurance for medical and pharmacy claims under the City health insurance plan because it provides the most cost-effective stop-loss insurance for the City.
CONFORMITY TO CITY POLICY:
Yes.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
The cost for FY 2025 is $902,819.
Is this a one-time or recurring revenue/expenditure?
Recurring.
Is this revenue/expenditure budgeted?
Yes, funds are available in the FY 2025 Budget in the Health Insurance Fund, account 615-55420-170-171-000000.
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
Yes.
RECOMMENDATION:
Staff recommends the City Council award RFP 25-02 to BCBSTX for an excess risk policy (stop loss insurance) for medical and pharmacy claims under the City health insurance plan effective October 1, 2024, in the amount of $902,819 and authorize the City Manager or his designee to execute the contract and any necessary change orders in accordance with state and local law.
DEPARTMENTAL CLEARANCES:
Purchasing
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Bid
Presentation