TO: Mayor Thomas J. Weisner
FROM: Alisia Lewis, Director of Human Resources
DATE: September 17, 2013
SUBJECT: title
A Resolution Establishing PPO Health Insurance Plans and Rates Effective January 1, 2014.
body
PURPOSE:
To establish the 2014 insurance benefit contribution rates of the City of Aurora's PPO medical insurance.
BACKGROUND:
Each year the city establishes base premium rates for its self-insured PPO program. Attached are the PPO rates proposed for 2014 and 2013 rates for comparison.
DISCUSSION:
The proposed 2014 PPO premium rates reflect the recommendation of the city's third-party administrator, Allied Benefits, a 1.6% decrease over 2013 rates. 2013 rates by comparison did not change from the 2012 rates. No increase in the premium rate for 2014 can be attributed to several factors including continued migration of employee groups from higher cost plan A to lower cost plan C, the change in plan design and contribution method, ongoing utilization of the Aetna preferred provider discount network, increased use of mail order prescription and generic drugs and no additional catastrophic claims exceeding the self-insured retention. 2014 rates are based, in part, on 2012 claims experience of approximately $15.6 million dollars. Our plan expenses for the 2013 plan year are trending towards a claims estimate of approximately $13.3 million dollars assuming no unexpected cost increases or large claims are incurred in the final 5 months of the year. It is expected that as the above listed factors continue in a positive direction, claims experience will continue to improve.
IMPACT STATEMENT:
RECOMMENDATIONS:
Place on the Finance Committee calendar for approval by Finance Committee.
cc: Alderman O'Connor, Chairman
Alderman Schuler
Alderman Mervine
Alderman Peters, Alternate