Title
Resolution to Approve the City's Contract with Delta Dental Plan of Michigan, Inc., for Claims Administration Services relating to the City's Dental Plan through December 31, 2026 ($707,455.00 in 2024, $735,753.00 in 2025, and $765,183.00 in 2026)
Memorandum
The attached Resolution authorizes the attached Delta Dental Service Contract through December 31, 2026, and authorizes related payments to Delta Dental Plan of Michigan, Inc. to administer the City's Dental Plan and pay associated costs of claims.
Budget/Fiscal Impact: The necessary funds were appropriated as part of the FY24 approved budget in the Risk Fund through June 30, 2024. Required funding for the portion of the contract term from July 1, 2024 through June 30, 2025 will be budgeted in the FY25 Risk Fund budget. 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. Required funding for the portion of the contract term from July 1, 2026 through December 31, 2027 will be budgeted in the FY27 Risk Fund budget. The estimated annual cost for the calendar years of this employee benefit is $707,455.00 in 2024, $735,753.00 in 2025, and $765,183.00 in 2026.
The City is in a current contract with Delta Dental through December 31, 2024. Projections during the last contract years of 2022, 2023, and 2024 estimated dental costs at $713,834.00 in 2022, $785,217.00 in 2023, and $866,276.00 in 2024. Due to lower than expected claims experience, our healthcare advisor Marsh McLennan Agency was able to secure a new, extended 3 year contract with a negotiated reduction in administrative services fee. The reduction in administrative fees is accompanied by lower projected claims beginning in calendar year 2024. This resolution encompasses those factors on the City's forecasted budgetary costs for Delta Dental. Employee labor contracts and the employee benefit plans establish the level of dental coverage for City employees...
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