AGENDA MEMORANDUM

Meeting Date:           August 10, 2009

From:                          J. Cunningham Perry, Director, Human Resources and Safety           

Subject:                      Resolution approving an agreement with BCBSFL Agreement for a three  year extension to the City’s contract with Blue Cross Blue Shield of Florida to provide administration services for the City’s self-funded group health plan

Staff Recommendation:

Staff recommends approving a three year extension to the City’s contract with Blue Cross Blue Shield of Florida to provide administration services for the City’s self-funded group health plan.

Analysis:

The City of Leesburg maintains a self-funded 3-tiered Preferred Provider Organization (PPO) group health plan for its employees, dependents and retirees. The City contracts with Blue Cross Blue Shield of Florida (BCBSFL) to provide an Administration Services Only (ASO) account which includes claims administration, group health plan design, and a discounted provider network. Fees for the group health plan administration are paid on a per employee per month (pepm) basis.

The City has contracted with BCBSFL to provide group health plan administration since October 1, 2001. From October 1, 2001 to September 30, 2006, the administration fees were $75.25 pepm. Effective October 1, 2007, the City Commissioners approved a three year agreement with BCBSFL to provide administration services for $62.00 pepm.  This reduction in administration fees represented an 18% reduction or $279,000 savings to the City over the three year contract.

This year, staff has been able to negotiate a three year, guaranteed no increase, renewal quote of $56.50 pepm. This quote represents an additional 9% decrease in administration fees, or a savings of $114,000 over the three year contract extension.

Options:        

1. Approve agreement with Blue Cross and Blue Shield of Florida
2. Such alternative action as the Commission may deem appropriate

Fiscal Impact:

The proposed three year guarenteed rate extension with BCBSFL will save the City of Leesburg approximately $38,000 annually based upon current enrollment.

Submission Date and Time:    8/7/2009 2:56 PM____

Department: Human Resources Prepared by:  Dann Herrin                      Attachments:         Yes_X___   No ______ Advertised:   ____Not Required ______ Dates:   __________________________                      Attorney Review :       Yes___  No ____ _________________________________            Revised 6/10/04

Reviewed by: Dept. Head ________ Finance  Dept. ___________JB_____                                    Deputy C.M. ___________________                                          Submitted by: City Manager ___________________

Account No. _064-1340-519-3110___ 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 AN AGREEMENT WITH BLUE CROSS AND BLUE SHIELD OF FLORIDA APPROVING A THREE YEAR EXTENSION TO PROVIDE ADMINISTRATION SERVICES FOR THE CITY’S SELF-FUNDED GROUP HEALTH PLAN; 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 whose address is 4800 Deerwood Campus Parkway, Jacksonville Florida  32246, for a three year extension to provide administrative services for the City’s self-funded group health plan.

 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 10^th day of August 2009

                                                                            __________________________

                                                                             Mayor

ATTEST:

__________________________

City Clerk