AGENDA MEMORANDUM

 

 

MEETING DATE:               August 28, 2006                     

 

FROM:                                   J. Cunningham Perry, Human Resources Director

 

SUBJECT:                              Resolution approving the BCBSFL Agreement

 

 

 

Staff Recommendation:

Staff recommends approving a three- (3) year agreement with Blue Cross Blue Shield of Florida (BCBSFL) to provide administration services for the City’s self-insured health plans and Flexible Spending Accounts (FSA) and, changing Agent of Record for the City excess health insurance from Mackie Branham, Crowne Consulting Group to Scott Hindman, Brown & Brown Insurance.

 

Analysis:

Initially, the City of Leesburg executed an agreement with BCBSFL to provide administration services for the City’s self-insured health plan for it’s employees effective October 1, 200110/1/01 pursuant to Resolution #6322.  The rate charged by BCBSFL for administration services to the City has remained constant for the past four (4) years at $75.25 per employee per month.  The proposed renewal rate for FY 06/07 was to remain at $75.25 per employee per month, but through successful negotiations with BCBSFL and Brown & Brown Insurance, the City has been able to secure a guaranteed three (3) year rate of $62.00 per employee per month.  Based upon a projected 586 covered lives in our health insurance plan for FY 06/07, the City will save $93,000 annually. This savings is the result of a reduction in fees paid to BCBSFL and Brown & Brown Insurance. As part of the three (3) year guaranteed rate agreement, and in consideration for the rate reduction paid to Brown & Brown, the City would be required to designate Brown & Brown Insurance as the Agent of Record for the City’s excess health insurance policy which is currently with Crowne Consulting Group.

 

BCBSFL also offered a one (1) year renewal option.  This option proposes a one year rate of $65.00 per employee per month which results in a one year savings of $72,000.

 

In a continuing effort to reduce the costs of health insurance to both the City of Leesburg and its employees, there will be a minor change in the prescription drug plan that will result in significant savings to the City and no increase in cost to the employees. Effective October 1, 2006, employees will be required to purchase generic drugs, whenever a generic substitute is available, unless the prescribing physician determines that a brand name drug is “medically necessary”. This is a requirement that was in place for many years at the City of Leesburg, and based upon current utilization, will result in an estimates savings to the City of $100,000 to $140,000 per year.

 

Effective  October 1, 2003,10/1/03, the City Commission approved an agreement (Resolution #6902) with American Family Life Assurance Company (AFLAC) to provide administration services for the City’s flexible spending account (FSA) programs, the Medical FSA and the Dependent FSA.  Flexible spending accounts allow employees to contribute pre-tax dollars to their individual accounts in order to be reimbursed for qualified medical and/or dependent care expenses.  Pre-tax contributions to benefits result in FICA/Medicare tax savings to both the employee and the employer.

 

It is recommended that the City terminate their agreement with AFLAC and approve an agreement with BCBSFL to provide administration services for the City’s flexible spending account  (FSA) programs.  Based upon the current number of participants in these programs, the cost of plan administration to the City will increase from $1,728 per year to $3,456 per year. However, the total cost will be more than offset by the FICA/Medicare tax savings to the City.  Based upon the current total employee pre-tax contributions to their flexible spending accounts, the City is projected to save $6,000 in payroll related taxes in FY 06/07. Additionally, the Medical FSA offered by BCBSFL include a debit card feature that employees can use to pay for qualified medical co-pays and deductibles, and an automatic reimbursement feature that eliminates the need for filing claims for qualified medical expenses.  Neither of these features are offered by the current AFLAC-administered FSA plans.

 

Options:        

1.      Approve plan.a three-year plan agreement with Blue Cross Blue Shield of Florida (BCBSFL) to provide administration services

2.      Deny plan.

3.      Such other alternative action the Commission may deem appropriate.Provide some other option.

 

Fiscal Impact:

The proposed three- (3) year guarenteed rate agreement with BCBSFL will save the City of Leesburg $93,000 annually.  Changing the Agent of Record for the City’s excess health insurance policy to Brown & Brown will result in no increase in cost to the City. Terminating the FSA administration agreement with AFLAC and approving the FSA adminisitration agreement with BCBSFL will result in an increase in cost to the City  of $1,728 annually. However this increase, as well as, the total cost of  FSA administration will be more than offset by the FICA/Medicare tax savings to the City. 

 

Submission Date and Time:    8/23/06 7:05 PM8/23/06 3:09 PM8/21/06 4:12 PM8/18/06 3:34 PM8/18/06 12:44 PM8/17/06 3:14 PM____

 

Department: Human Resources_________

Prepared by:  Dann Herrin_____________                     

Attachments:  Yes____   No __X____

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Newspapers:

_________________________________                                                    

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. _wp_________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ________RS___________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________

 

 

 

 

 

 

 

 

 

 

 

 


 

RESOLUTION NO._______________

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A THREE YEAR AGREEMENT WITH BLUE CROSS BLUE SHIELD OF FLORIDA (BCBSFL) TO PROVIDE ADMINISTRATION SERVICES FOR THE CITY’S HEALTH INSURANCE PLANS; 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 administration services for the City’s health insurance plans.

 

             THAT this resolution shall become effective October 1, 2006.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _____ day of _________ 2006.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk

 


RESOLUTION NO._______________

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH BROWN & BROWN INSURANCE TO BECOME AGENT OF RECORD FOR THE CITY’S EXCESS HEALTH INSURANCE POLICY; 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 Brown & Brown Insurance whose address is 900 North 14th Street, Leesburg, Florida  34748, to be the Agent of Record for the City’s excess health insurance policy.

 

             THAT this resolution shall become effective October 1, 2006.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _____ day of _________ 2006.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk

 


 

RESOLUTION NO._______________

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH BLUE CROSS BLUE SHIELD OF FLORIDA (BCBSFL) TO PROVIDE ADMINISTRATION SERVICES FOR THE CITYS’ FLEXIBLE SPENDING ACCOUNT (FSA) PROGRAMS; 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 administration services for the City’s flexible spending account (FSA) programs.

 

             THAT this resolution shall become effective October 1, 2006.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _____ day of _________ 2006.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk