Title
Resolution to Approve the Renewal Contracts with Blue Cross Blue Shield of Michigan to Provide Health Care Coverage to City Employees and Retirees and Their Dependents and Authorize the City Administrator to Execute the Necessary Documentation ($12,070,628.00)
Memorandum
The attached Resolution authorizes the City Administrator to execute the renewal of health care services contracts with our health care service provider. Employees and retirees, through their labor agreements or in accordance with the City’s employee benefit plans, have the availability of using the Blue Cross Blue Shield Community Blue Preferred Provider Network for their health care service needs. The plan is administered by Blue Cross Blue Shield of Michigan.
The Blue Cross Blue Shield Community Blue Preferred Provider Network (or its equivalent) is provided for under our current labor agreements and our employee benefits program. This contract continues services now in effect. This Plan is a self-funded program, and requires the City to pay for the actual cost of claims up to $50,000.00, our contracted specific stop-loss limit. Claims from $50,000.00 to $5,000,000.00 are paid by Blue Cross Blue Shield as the stop-loss policy indicates. The stop-loss policy protects the City against individual catastrophic claims paid during the year. The City pays an Administrative Fee and Stop-Loss Fee to Blue Cross Blue Shield based on the number of contracts each month, in addition to paying all of our members’ incurred claims. The Fiscal Year 2008-2009 monthly Administrative Fee per contract will be $33.43 (estimated total cost of $593,716), and Stop-Loss Fee per contract will be $78.57 (estimated total cost of $1,395,405.00) for a combined total fixed cost of $1,989,121. This equates to an increase of 2.01% from our current fee base of $32.77 per contract for Administrative Fees, and a 10.9% increase from $70.84 per contract for Stop Loss Fees. There was a decrease to the monthly Admini...
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