Description: AGENDAHED.JPG

Item No:                    4.C.4.

 

Meeting Date:           May 14, 2012

 

From:                          Dann L. Herrin, Risk Manager

 

Subject:                      Resolution authorizing execution of a three year extension of Administrative Service Only agreement with Florida Blue

 

 


Staff Recommendation:

Staff recommends approving a three year extension to the City’s agreement with Florida Blue (formerly known as Blue Cross Blue Shield of Florida) to provide claims administration services for the City’s self-funded group health plan.

 

Background:

The City of Leesburg maintains a self-funded three-tiered Preferred Provider Organization (PPO) group health plan for its employees, dependents and retirees. The City contracts with Florida Blue to provide an Administrative Services Only (ASO) agreement which includes claims administration, pharmacy benefits management (PBM), group health plan design, and a discounted medical provider network. Fees for the group health plan administration are paid to Florida Blue on a per employee per month (PEPM) basis.

 

History:

The City of Leesburg has maintained an Administrative Services Only (ASO) agreement with Florida Blue (formerly known as Blue Cross Blue Shield of Florida) since October 1, 2001.

 

From 10/1/01 until 9/30/06, the City paid Florida Blue $75.25 (PEPM) to provide ASO services.

 

Effective 10/1/06, City staff successfully negotiated a three year extension to the ASO agreement with Florida Blue that reduced the ASO fee to $62 (PEPM) resulting in a significant savings to the City.

 

Effective 10/1/09, City staff, again, successfully negotiated another three year extension to the ASO agreement with Florida Blue that reduced the ASO fee to $56.50 (PEPM) further reducing the City’s cost of providing group health insurance to its employees.

 

Proposal:

City staff has negotiated a tentative three year extension to the ASO agreement with Florida Blue that includes the following features:

 

 

 

·         A reduced ASO fee schedule for each of the next three years:

 

ASO PEPM FEES

FY 12/13

FY 13/14

FY 14/15

$48.50

$48.50

$50.02

 

·         Early termination of the existing ASO agreement allowing the new agreement and lower ASO fee schedule to go into effect on June 1, 2012, rather than October 1, 2012, providing additional savings to the City.

 

·         A one-time $50,000 contribution by Florida Blue to the City’s wellness program(s) which can be used to offset the operating budget for the City’s Employee Wellness Center for the three year term of the agreement.

 

Fiscal Impact:

The proposed three year extension to the ASO agreement with Florida Blue will provide the following projected savings over the length of the agreement based upon the current employment level:

 

Reduced ASO PEPM Fees:

$156,731

Early Termination/Early Renewal:

$18,592

One Time Wellness Contribution:

$50,000

Total Projected 3 Year Savings:

$225,323

 

Options:

1.  Approve agreement with Florida Blue; or

2.  Such alternative action as the Commission may deem appropriate

 

Submission Date and Time:    5/10/2012 2:57 PM____

 

Department: _ ___________________

Prepared by:  _________________

Attachments:         Yes _X_   No _____

Advertised:   Yes__ Not Required ____                     

 

Dates:   February 19, 2012____________                      

 

Attorney Review :       Yes___  No ____

                                                

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. ___________________  

 

Deputy C.M. _____________________                                                                       

 

Submitted by:

City Manager _____________________

 

Account No. _064-1340-519-3110______

 

Project No. ___________________

 

WF No.  _____________________

 

Budget  ______________________

 

Available _____________

 

 

RESOLUTION NO._______________

 

RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A THREE YEAR EXTENSION OF THE ADMINISTRATIVE SERVICES ONLY AGREEMENT WITH FLORIDA BLUE; AND PROVIDING AN EFFECTIVE DATE.

 

 

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

            THAT the Mayor and City Clerk are hereby authorized to execute an agreement with Blue Cross Blue Shield of Florida (BCBSFL) whose address is 4800 Deerwood Campus Parkway, Jacksonville Florida  32246, for administrative services for the City’s health insurance plans.

           

             THAT this resolution shall become effective immediately.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the 14th____ day of _May,__ 2012.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

_____________________________________

City Clerk