2006-039 Renews United Healthcare for Emp. Health InsuranceRESOLUTION 2006-39
A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF NORTH PALM BEACH,
FLORIDA, ACCEPTING THE RENEWAL PROPOSAL OF UNITED HEALTHCARE FORA 15-
MONTH PERIOD BEGINNING JULY 1, 2006 AND ENDING SEPTEMBER 30, 2007, TO
CONTINUE TO PROVIDE THE VILLAGE WITH HEALTH INSURANCE FOR VILLAGE
EMPLOYEES AT A RATE INCREASE OF 3.9% AND INCLUDING A 3-TIER COVERAGE
PLAN, WHICH RENEWAL PROPOSAL IS ATTACHED TO THIS RESOLUTION AS EXHIBIT
"A" AND MADE PART HEREOF; ESTABLISHING AND SETTING FORTH CONTRIBUTIONS
FOR HEALTH INSURANCE BY EMPLOYEES OF THE VILLAGE BEGINNING JULY 1, 2006;
AND, PROVIDING FOR AN EFFECTIVE DATE.
BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA:
Section 1. The Village Council of the Village of North Palm Beach, Florida, does hereby accept
the renewal proposal of United Healthcare to provide the Village with health insurance for Village
employees, which proposal is attached to this resolution as Exhibit "A" and made part hereof. The
renewal proposal includes a 3.9% rate increase and shall be in affect for the 15-month period
beginning July 1, 2006 and ending September 30, 2007.
Section 2. This resolution creates a 3-tier coverage plan for all covered employees and
establishes and sets forth rates payable by employees of the Village for health insurance as follows:
Employee Contribution Rates:
United Healthcare POS Plan
Employee Only Coverage - $ 0.00 per month
Employee + One Coverage - $104.59 per month
Employee + Family Coverage - $168.15 per month
United Healthcare HMO Plan
Section 3.
Employee Only Coverage - $ 15.99 per month
Employee + One Coverage - $100.09 per month
Employee + Family Coverage - $164.21 per month
This resolution shall take effect on July
~nnc
PASSED AND ADOPTED THIS 8th DAY OF JUNE,
(Village Seal)
ATTiST:
i~~~
VILLAGE CLE
United~-~ealthcare
A Un~todkatth fro~c Lartrwrry
May 18, 2006
Mark Bates, Village Manager
Village of North Palm Beach
501 US Highway One
North Palm Beach, FL 33408
Re: United Healthcare Medical Renewal -July 1, 200b
llear Mr. Bates:
I'd like to thank you for the opportunity to serve you and your employees over the past
year. With the approach of your policy year anniversary date, it is time to review the past
year's activity and to present our plans for the coming year. This letter and the attached
documents comprise your renewal package for an effective date ofJuly 1, 2006 with rates
guaranteed for 15 months.
No presentation of medical care costs would be complete without a discussion of "trend."
"Trend," as used in our renewal rate determinations, is the pace of increase in the cost of
medical care that is above and beyond the increasing costs for the economy as a whole.
Our medical trend is currently 12.5%. Some of the factors driving this change include
medical inflation, the costs associated with an aging population, increased use of
advanced medical technology, cast shifting from the public to the private sector, and the
costs of developing new drugs and other inten~entions.
The manual premium calculation for the Village of North Palm Beach called for a l7%
premium increase. This encompasses trend and plan designs. Then we use the
demographics and claim costs of the Village and adjust the renewal accordingly. We
released the renewal at 6.4% increase for 12 months effective July 1, 2006.
The Gehring Group advised United Healthcare that the Village would like to extend the
contract for IS months to align the renewa with your fiscal year and other benefit
options. United Healthcare agreed to the 15 month renewal at a 6.4% increase.
-- --
However, af~ei-continued negotiations with the Gehring Group, we are pleased to offer
the Vi ~2be a 3.Q% rene~yal inCrCase, for the Ci:rfPnt pla.^.S o:'er a 1 G m
oath contract
period om,7/a /06 to 9/30/07. _s
Thank you for your continued business. I'm looking forward to the opportunity to serve
you and your employees over the coming year. Please feel free to contact me at 954-858-
4209 if you have any questions.
Sincerely yours, ~ /
Christina Gruter ~-~
Strategic Account E?~cutive
United Healthcare
Village of North Palm Beach
'`._..~ t
~~4 ,~,.
-~
-.~:
Group Medical Insurance
Renewal Analysis
Effective Date: July 1, 2006
Presented by:
-EI-II~.ING,~GI~QU_P
11505 Fairchild Gardens Ave., Ste 202
Palm Beach Gardens, Florida 33410
Telephone: (561) 626-6797
Fax: (561 } 626-6970
www.gehri nggroup.com
Execu#ive Summary
Currently, health insurance is one of a public sector employers' largest expenditures in the
budgetary process. The concern with health insurance at this time is that actuaries,
underwriters and insurance companies have indicated that medical care inflation for the
State of Florida for the 2006 plan year will continue to range from 8% - 12%, significantly
greater than the general rate of inflation. When employers take their second and third
highest cost item and increase it by these percentages, the actual dollar increase with
which the employer is faced is staggering. Constrained by millage caps and voter
sentiment, public sector entities are striving to contain employee benefits costs.
With managed care discounts eroding away due to hospitals and providers working
together to negotiate higher fees from insurance companies, HMO's and other managed
care programs are not as effective as they once were in controlling costs. This results in
insurance carriers and self funded programs finding themselves behind the proverbial
"eight ball" from the standpoint at projecting inflation. Due to this escalation of medical
inflation, many employers have had to reduce their level of benefits by increasing
deductibles, co-payments and employee contribution amounts considerably.
The Village of North Palm Beach enlisted the services of the Gehring Group to initiate the
competitive bid process regarding the Village's group medical and dental insurance
coverages for the plan year 2005 - 2006. At the conclusion of the Request for Proposal
(RFP) process, the Village entered into a fully insured 12-month contract with United
Healthcare of Florida. The complete proposal analysis can be found in Tab 3. Throughout
the RFP process, the Village established an insurance committee consisting of Village
employees that represented a variety of departments and positions that was also inclusive
of union representation. The purpose of the insurance committee was to educate
employees about the insurance industry in general, the RFP process and analysis criteria.
The United Healthcare contract became effective July 1, 2005. Staff currently reports that
Village employees are generally satisfied with the current plan offerings.
The Gehring Group obtained the Village's initial group health insurance renewal for the
2006 - 2007 plan year in late April. l.lnited Healthcare's manual premium rates for groups
of similar size and geographic proximity called fora 17% increase of the current premiums.
Since the Village's plan is still new with United Healthcare it is considered "immature"
being that it is a first year case with only 7 months of available claims data at the time the
renewal was presented. However, after taking into consideration the Village's premium to
claims loss ratio and other market factors such as medical inflation stabilization, the initial
renewal arrived at 6.4% above the current premium fora 12-month contract effective July
1, 2006. Pursuant to the Village's desire to change the health plan's effective date to
coincide with the fiscal year, the Gehring Group negotiated a contract for 15 months at the
same renewal increase.
After further negotiations, United Healthcare provided a best and final renewal offer at a
3.9% premium increase or a $35,212 savings from the initial increase. The overall
increase represents a $54,924 increase in the current group health premium of
$1,408,380.
After taking into consideration the above mentioned factors, the Gehring Group
recommends that the Village of North Palm Beach renewal their group health insurance
contract with United Healthcare at a 3.9% premium increase for a contract period of 15
months effective July 1, 2006 through September 30, 2007.
m
cQ
d
0
Z
L3!
c~
W
F-
J
3
W
Z
W
Q'
JQQ
Z
w
m
W
H
J
Z
W
J
Q
F
z
0 W
N ,y
M Z
W
L ~
d ~
~ ~ U
.N
Q ~
w3, °
W
~ N
~ T
LL A
d ~
V ~
C
L ~
~ ~
N Q
C
_ d
tQ ~
V +,'
'Ca Q1
C
,,.~ .:
~'~~'
- O
v
~' ~._ p
,~ V. ~
p
V
O
cA
O
OO
r-
~
M O
t0
N
tD
[D
W -
-
~' p
p
'v.' ~
p
V
O~
~
O
tD
~
_
~
!MA O
N
~
Oj
M
W 1
p
~ a. ~ sT
M
~ ~
.~!Lk7 t a0
~ M O
00
~
CO
aD
O
r
O
00
to
~
fh
VT
°
~+'f
r ~
~
M o
O
~ r..~ O
~
~ ~
M ~
ao
~
N
V t
V
`' cD N ~ ~
: N OC1
~
. ~p p1 ~;
(
)
b9 p
(JT pj
W
~ ~
.
M
.: 64 Q)
6L?
~
1N M
r~
~ r ~
M
C
~ M
a9
N
B :. W •
+!
~ W
~~`` ~ t0 ,~ O 0
i
_
07
l?)
M
~~ ~ O
~
IiJ
~ O
`4i.. O
~`~ op ~
0 Of
i0
N
~ 1 f
.
~' N
~~ T .p
~
M p
'a
N
~
. ~ ~
69 H -TUT- ~ t1') ~ N
M 1 ' t.9 K N K
.. 7 {
i ~
` i
~ ~
O)
Q7
69 0
c0
M
~ ~
N
O
N i 3-~ ~
O
~ V7
O)
p
E. J O
O1
M
W 0
to
~ ~~
~
~ t{ H
~~ ~ ~
Of
W
~
N
Y'f
h
M
~
to
J_ ~
N '. .:, ti
N
O ~
1!'f ~:~
-
~:: p)
Q)
N 00
N 'i: h
~~r~ ~ M
T
~
L:. N
cv OJ
v Oi
m ~
_ .
~ A1, ~O
~ p.. ~n (`7
v O
~m i"~
~ y.;- O~
~1f)3,- ti O
pp
~ d
m
~ e
of
C7 ~
~
V> rn
~ p
~ T
~ C? ~
~r > '. (H rn
69 ~r
•
~ cD
th ~t ir,7 ~
q W
M
~ ~D
~ V- d
f yµ7 ~
LL k
+,~
'?~~ ~''
~
~ Z
OO
~ O M
C°
•
~ ~ ~ ~~ s` rn c ~ ry ~ • ~
s~„ `N„ ~
~
~
T
t0
~
~ `n
' ,l
M
co
~
,~ ~
~~ ~_
~
T
v
~n
~ e7' O
ip'
O1 cvJ
~+ .~. M O N
Of .
t} ~
Of
0
tD
tip` v~Xi 69 to ~ O1
h ~ '-. GA 69 ~ t(
M ~ :- ~
+ N
1' • Q
r
N 0
1
V?
. fi r a
$" ~
~
~ O
~
M O
~ ~-.
~ . _
~ ~ ~
In
~ O
~
~ O
~ ~ 11'1
_. C+1
.y(~ Ionp O
N
Z
Z
.;~
4
~? '; c0
c0
N
~
C
~ ~. O1
O~
M
n
~ } -~~
~ ~ r ~
s T
O
,Y it O
i ~ c 7
M ~lT
N
O M
~
O~
O1 '~'.. CD
t ~ ~
~
(~7
~
a0 O
j ~
~
c0 ':~ ~ M
`~~Yp!
V~
C~ O
aP
Z
Z
69
,a.j-
ER ~D
~
ti
yr ~
"~! Ffi
Efi n
~
~
w -
O
~7:~ w
F O
~y
N
~, ,
~' ~
•:
M
~
o
m ~
~~,~ ~ti p ~
o
~:~ A
: `~
~ ~
O m
0 ~
~
~ ~ O' rn
~ r,
M v
N 1ri
~ ~ i P'f ~
M
Q
Q
.
.
' . _
~. Efi 69 ~ OD FA U> ~ ~ ~ ~ a
~. . ~~__
~..
~, ~ a~
_ ~ ;~ fi' O
y
~
>. ~ r
t ~
~ O
y
~
y. ' ~n
O
(.J r-
rn
O
w
~ w
~QQn
j ~ ? ~
V W
~
~`~
`V + + +
M
A + + +
O
M F-
,.: 2 ~
Z Z Z
~ N N N O N ~ ~ ~ J
U_~ O G O O "ir U ~ . C
I C Q C -n U e"= ~ ~
w _
w
~ '
w
w
w
x J Z
Q
w u w ~ ~ ' ~ = ; 0
~ 0 ¢
F
Y•~
/^ ,.
~~y~J y
F-~ .,
M'S
T ~'S,
~~
T
f~N
~1
H~1
(/rry
h-~~
~/
H
.y
~,
~a
^~
W
m ~
_~ ~
~ ~
~ V
~-O ~
Z ~
~~.,.
Q
~ ~
~C
C
J
d
Z
cW
W
v
Z
W
H
J
3
W
Z
W
J
F-
Z
W
W
V
Z
W
H
e~f
J
d
W
OC
~ ~
~ W
O ~
N v
O ~-
M z
W
L ~
d ~
V
d
~.
0
d
N
r
_~
0
V
W
~y ~ .. Op
• 69 `7
EA O
Ern- ~
V! Kj
Y'f
~ ~
fOD
~ ~ !i"' . O
~•~~;• ~ N
6~R O
b~4 C
~. O
[•7
N? O
~
M
69 ~ ~"r. 1A
U CO
~...'e. M 01
O
M ~C
~
M
~~ '
.
07
- O) ~
ch t'7
~ ^ Y7
m tD Ip '
' O
O O~
I~ O N t0 M
~ •~ r
~y
~ ~ ~tK O~ r. +..' O 00 ~O
_' 69 69 ER ~ t~D ~ ~
V; N4
~ b9 E~ th N ~ r
~ ~ ~••' M
V4 b9 ~ ~ .R:n ~ M
N ~ W i~
W
~~007
y y7
~
cD
~
cfl
A
~
'
t~D
i„~ t
.,_
~ O
V
O~
Cp _
~
N
M
01 }
r;; 00
`. O
G c0
p~
N
,~
CW
~ O V N O
-~ 00 O
M m
W p O N ..a ~+ ~
~ J; ~ ~ pNj
~ - V
k• ~: c~') M
00 CO
I` ~ W
~ CO ~
~ ~ (`"J cp o0 N h }~ ~Q M ~
- to
69
69
A
01
~ ~ E!i
ER
69 ti
~
~D ,
q? N p
t
.~
~ M
H
_YM~;'V1 O
~c 1 ip O
O
'~.~•~ ~ r
cD
~ [O
~
O a0
off
kj N
O
c0
i0 y~
Y y~ O
- O
O O
~'~:~' fH '_
~
N
b~A Q1
O
r
r ~p
r
_
M N
pj
M
~
07
{A +''~ C'V
M
~''. e0
: ~ O
^`7 ~
°~
1A
M
t0
~
M
o0
~
~°
Oa
M
•~
• ~
~
CJ
M
~ * ~
Ld4'~~ O
M
p
M
~D
t0
d ~
C
1A
~
~~' '. M
" `ct
'' N
i[7 M
O t0
N ~ ~
~~ a0
N ap
CD (D
~ ~
00 oD
~ 1.
-"
~~ ~ ~
t0 ~
~ c
O1
C
1
69
~~
~, f~
b9
07
M
M
69
~
~
~
`-
l"1
~
N
M
~. r
Y7
M
O
M
ti
~ to N W .. VI M y 7 f'~ !4- H') N
' ¢~ i~•
' rn
qq
O~ V ti
N o
QI
~ rn
r
oo tO
ti
~` t ~' ~
O
~.] ~; ~
i v
O
O co
~
~
cD rn
cD
N- a?
N
N
~ w
~ ~
~
•
N
O
M `°
QI
N
bi
{•~' ~1.;
m Yi ' - ~7 ~ ~+• ~ S ('7 0~0 ~ r
^ y~j ~
''
r ~ ~ C,Y
b
3 l 69 ti
~ m ~ ~ ~ 69 ~
W ~ ,
~ V' ~
M dl {g r
N H
~~' ~~~ O
iq:. O
`V,. FA
~
ti
EA
ti
M
~
Y7
M O
O
~
~
t~0
k~% ;.
~ ~.
~~ O
~
~ ~~ Vi
~[7
ti
t,9
t~
~
M
M
O
11O
a0
{M/! ~`
.,. ~
~yVQ~]J-
-`' O
i y M 4
O
1A
^
p
H
d
Z
Q
~2
ap
~s o c0
~ '~
~
a ', Qi
~
~ p~ M ., ~j
o
~ M .
O
~D
01 ~
Q'~i: M ~
oO ~
n1 o
c0 Y ~ oMO
Q, ~' OO
C d_
Z Q
Z
~`T,_y V3
WWW fA ~ H ~ ,. fA EA
~ O ~~~_ _O
`
~ M
~ y
i..6°~ N
~7
L
O p
p
. . O
~:,4.r O
~;. Y1! r-
'
Q f")
Q7
am
ti
O
~
O .. O
tie.• • ~'~.i CD
R Lf)
~ ~.
Q>
~ 0[1
~
liY
~
N ~
to
V M O
~
M
d
Q
~ •
c+7 l
-. O d r_ M ~ GL
:~
a~
c
O a>
c
.: ~
°~ ~, i
~' ~ °' >' ~ O ~ Q
, ~ ~ W
~ ~
;~ ;. + + + ~ W
i.7 ~ + + + ~ ~ ~
'
Z
Z Z ~
N
~~ ~, i <U
i 47
% G
% O
U ~
O N
D ~". a> Q)
a~ ~
a7 N
a> O
V N
o '
O
Z
J J
Q
t
,
C~ ~. ~' O .
G U d T ~ ~ O
~ O O C ~ ~"~ ~ ~
n
•
d
d
d
~
t0
: d
~
~
Q
d
d
«
A J
Z Z
Q ~
i~ W W W W p c W
~ ~: W W W p ~ "~
' ` O ~
O Q d
Se ~
}i~
F^-•. •:
~~ -
l~
rV ;,
F'~ :`
-•
~;
.:
T ~~
~.L
~~
pr.r
'`
O]
m
a
r
N
U