Title
Resolution to Approve the Renewal of the City’s Contract with Blue Cross Blue Shield of Michigan (BCBSM) to Provide Administrative Claims Processing Services for Group Medical and Group Pharmacy Benefits, and Related Stop-Loss Insurance through BCS Insurance Company for the City’s Health Care Plan on Behalf of Employees, Retirees, and Their Dependents ($2,199,490.00)
Memorandum
The attached Resolution authorizes the City Administrator to execute the renewal of the City’s contract for administrative claims processing services for the City’s group health care plan, group pharmacy plan, and purchase of a related stop-loss insurance policy. Blue Cross Blue Shield of Michigan will continue to provide administrative claims processing services for the City’s health plan for the period of January 1, 2025 through December 31, 2025. The annual estimated cost for claims administration provided by Blue Cross Blue Shield of Michigan is $1,372,935.00. BCS Insurance Company, a subsidiary of Blue Cross Blue Shield of Michigan, will continue to provide stop-loss insurance for the period of January 1, 2025 through December 31, 2025. The annual estimated cost for the stop-loss insurance provided by BCS is $826,555.00.
Public Act 106 requires the City to competitively bid our medical, dental and vision coverage every three years. Marsh & McLennan Agency LLC (“MMA”), our healthcare benefits advisor, conducts the bidding on our behalf and recommends a service provider. We completed this bidding process for plan year 2023. BCBS remained the best option for medical claims processing. As for stop loss insurance, MMA bids this annually. For plan year 2025, BCS remains the best option for stop loss coverage.
Budget/Fiscal Impact: The necessary funds were appropriated as part of the FY25 approved Risk Fund budget through June 30, 2025. Required funding for the portion of the contract term from July 1, 2025 through June 30, 2026 will be budgeted in the FY26 Risk Fund budget. The estimated annual cost for the calendar year of this employee benefit is $2,199,490.00, which covers the medical / pharmacy administrative claims processing and stop-loss insurance coverage.
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.
The overall costs for the program will fluctuate monthly depending both on the number of employees and retirees enrolled in the program during any given month, and the number and costs of incurred claims actually paid during any given month.
Staff
Prepared by: Kimberly Barry, Employee Benefits Supervisor
Reviewed by: Monica Boote, Director of Human Resources & Labor Relations
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The City provides health care coverage to City employees, their eligible dependents, and retirees and their eligible dependents, in accordance with the employee benefits program and various labor contracts at an estimated annual claims cost of approximately $31,516,570.00, inclusive of both group medical and group pharmacy claims, and inclusive of all required benefit designs;
Whereas, The City’s contract with Blue Cross Blue Shield of Michigan (“BCBSM”) is due for renewal on January 1, 2025;
Whereas, For the renewal period, the administrative fees will remain the same and stop loss premium will increase in accordance with the attached BCBSM Administrative Services Contract Renewal (Schedule A) and the attached BCS Insurance Company (“BCS”) Stop Loss Schedule;
Whereas, The BCBSM benefit coverage levels will be the same for the calendar year 2025 as they were in 2024. The BCS benefit coverage levels will remain the same as currently underwritten, including continuation of the specific and aggregating specific deductibles.
Whereas, Necessary funding for the January 1, 2025 through June 30, 2025 portion of the contracts’ term was approved as part of the FY25 Risk Fund budget and the remainder of the required funding will be budgeted in the FY26 Risk Fund budget;
Whereas, BCBSM complies with the requirements of the City’s Non-Discrimination and Living Wage Ordinances; and
Whereas, Human Resources Services recommends approval of both the attached BCBSM renewal and the BCS Stop Loss schedule;
RESOLVED, That City Council approve the attached renewal of the contract with Blue Cross Blue Shield of Michigan (“BCBSM”) to provide administrative claims processing services, and the expenditure of the fees outlined therein for the City’s health care plan for all eligible City employees, their eligible dependents, retirees, and their eligible dependents, for the period January 1, 2025 through December 31, 2025;
RESOLVED, That the City Council approve the attached BCS Insurance Company Schedule for Stop Loss Insurance, ratify the application for stop loss insurance that MMA filed on the City’s behalf, and the expenditure of fees outlined therein for the City’s health care plan for all eligible City employees, their eligible dependents, retirees, and their eligible dependents, for the period January 1, 2025 through December 31, 2025;
RESOLVED, That the City Council approves the expenditure of the fees in the attached BCBSM Renewal (Schedule A), the attached BCS Stop Loss Schedule, for each eligible City employee, family, or contract (respectively), from January 1, 2025 through December 31, 2025, payable from the Risk Fund in accordance with Chapter 11 of the City Code, Section 1:265(7);
RESOLVED, That the City Council approve a ten percent (10%) contingency to be expendable from the Risk Fund with City Administrator approval, in accordance with Chapter 11 of the City Code, Section 1:265(7);
RESOLVED, That the Mayor and City Clerk be authorized and directed to execute said agreement after approval as to substance by the City Administrator and approval as to form by the City Attorney; and
RESOLVED, That the City Administrator be authorized to take all necessary actions to implement this resolution including execution of any documents to add the benefits authorized herein, any renewals, and any changes, amendments, or additional administrative documents required, that do not exceed the amount authorized herein.