Agenda Item # 1
Columbus Consolidated Government
Council Meeting
October 25, 2011
Agenda Report # 707
TO: Mayor and Council
SUBJECT: 2012 Insurance and Benefits Renewals
INITIATED: Human Resources Department
Recommendation: Approval is requested authorizing the benefits manager,
Northwestern Benefits Corporation of Georgia, to renew the Blue Cross Medicare
Advantage plan for retirees, the Blue Cross HMO, POS and PPO Medical plans and
the Express Scripts Prescription plan.
Background: Effective June 1, 2011, Council authorized the appointment of
Northwestern Benefits Corporation of Georgia as manager of CCG employee and
retiree benefits programs. As benefits manager Northwestern contracts directly
with the providers of the various employee benefits programs on behalf of the
CCG. The benefits plans must be renewed for continuation into calendar year
2012. Council also created and appointed members to a Retirees? Health
Benefits Committee to review and make recommendations regarding retiree
benefits.
Analysis: All current providers of employee and retiree benefits programs have
offered to renew our benefits plans with reasonable increases in premiums and
fees. The Retirees? Health Benefits Committee recommends renewal of the Blue
Cross Medicare Advantage plan with a 6% premium increase. Blue Cross
administrative fees for the self-funded employee plans are increasing 3%, the
allowable increase for the second year of our existing three-year rate
guarantee. Express Scripts has offered to renew their contract with no
increase in administrative fees, consistent with their three-year rate
guarantee from the initial 2011 calendar year contract.
Financial Considerations: The CCG pays 25% of the premium for the retirees?
Medicare Advantage plan. The premium change will increase the CCG contribution
by $2.70 per month per retiree or about $21,000 for calendar year 2012. The 3%
increase in Blue Cross administrative fees for the self-funded plans is
expected to increase annual costs for 2012 by about $33,000. Express Scripts
fee rates will not increase in 2012 but utilization may change total costs.
Projected Annual Fiscal Impact Statement: Total projected cost increases for
calendar year 2012 is $54,000. This impact is for fixed fees and premiums only
and does not include increases in claims on the self-funded plans. Based on an
industry projected 12% medical expense and prescription cost increase, CCG
costs for calendar year 2012 could increase over $2,000,000.
Legal: Authorization of Council for Northwestern to renew existing benefits
contracts is required.
Recommendation/Actions: The City Manager, Human Resources Director and Finance
Director recommend approval.
A RESOLUTION
NO._____
A RESOLUTION AUTHORIZING BENEFITS MANAGER NORTHWESTERN BENEFITS CORPORATION OF
GEORGIA TO RENEW THE BLUE CROSS MEDICARE ADVANTAGE PLAN FOR RETIREES, THE BLUE
CROSS BLUE SHIELD MEDICAL PLANS, AND EXPRESS SCRIPTS PRESCRIPTION PLAN.
WHEREAS, Blue Cross has offered to renew the City sponsored Medicare Advantage
plan with a premium increase of 6% from $180.03 to $190.83, an increase of
$10.80 monthly; and,
WHEREAS, the subsidized premium for retirees will increase from $135.03 to
$143.12, an increase of $8.09 monthly; and,
WHEREAS, the Retirees? Health Benefits Committee recommends that the Columbus
Council accept the renewal as proposed by Blue Cross; and,
WHEREAS, the Blue Cross health plans for employees and pre-65 retirees is
eligible for renewal on January 1, 2012, the second year of a three-year rate
guarantee period; and,
WHEREAS, Blue Cross has offered to renew the HMO, POS and PPO health plans for
employees and pre-65 retirees with a 3% increase in administrative service fees
an stipulated in the 2011 guaranty agreement; and,
WHEREAS, Express Scripts, Inc. has offered to renew the prescription plan with
no increase in administrative service fees as stipulated in the 2011 guaranty
agreement.
NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS FOLLOWS:
That Northwestern Benefits Corporation of Georgia, as City benefits
manager, may renew the retirees? Medicare Advantage PPO Plan and the
employee/pre-65 retiree HMO, POS and PPO health plans with Anthem Blue Cross
Blue Shield of Georgia and the prescription plan with Express Scripts for
calendar year 2012.
_____________
Introduced at a regular meeting of the Council of Columbus, Georgia, held
the _________ day of ____________, 2011 and adopted at said meeting by the
affirmative vote of _________ members of said Council.
Councilor Allen voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Henderson voting __________.
Councilor Huff voting __________.
Councilor McDaniel voting __________.
Councilor Thomas voting __________.
Councilor Turner Pugh voting __________.
Councilor Woodson voting __________.
___________________________ _________________________
Tiny Washington, Clerk of Council , Mayor
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