TO: Mayor Thomas J. Weisner
FROM: Alex G. Alexandrou
DATE: December 6, 2013
SUBJECT: title
A Resolution Authorizing An Agreement for Health Insurance Stop/Loss Coverage with QBE Insurance Group, Ltd. For the Period January 1, 2014 through December 31, 2014
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PURPOSE:
To obtain approval to purchase Stop/Loss Insurance for the City's PPO Health Insurance Plan for 2014.
BACKGROUND:
QBE Insurance Group, Ltd. has provided the City of Aurora with Stop/Loss coverage since 2012. Stop/Loss insurance provides excess coverage for PPO health insurance claims that exceed $325,000 per claim deductible. Prior to QBE, the City retained ING for ten (10) years.
DISCUSSION:
After soliciting proposals from ten (10) stop/loss insurance carriers, the City received 6 bids including the incumbent, QBE. QBE Group's 2014 proposal represents a 7% decrease below their 2013 premium. A market summary is attached as reference. Allied is recommending renewal with QBE for 2014 based on the combination of the existing positive relationship, premium reduction, and proven track record of performance and compliance. The City's past and present loyalty within the stop loss market and recent lack of excess claims has made it an attractive prospect for stop loss carriers. While there are two lower bids this year than the renewal proposal, the City must be cognizant of how carriers view COA as a risk and the benefit of maintaining market relationships for the longer term. In moving the stop loss after only two years, we run the risk of alienating markets in the event of a poor claims year.
IMPACT STATEMENT:
No impact.
RECOMMENDATIONS:
Place on Finance Committee agenda (12/10/13) for approval to City Council.
cc: Alderman O'Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Peters, Alternate