Discussion and action on any and all matters regarding the Stop Loss Insurance Plan renewal. (Oscar Diaz, Vice President of CBIZ-Business Development).

Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits called deductibles. There are two types of self-funded insurance:
 

• Specific Stop Loss (aka “individual stop loss” or ISL): Protects the employer against an excessive amount of claims being paid on behalf of any specific claimant during the plan year.

 

• Aggregate Stop Loss (ASL): Protects against the entire plan’s expenses far exceeding what is predicted to be the average expense per employee over the course of the plan year.

Currently, our stop-loss carrier policy consists of a specific deductible of $50,000 per individual, and a laser of $185,000.  The laser is a secondary Specific Stop Loss level that has been set on an individual basis for a particularly high-risk claimant.  Having this low deductible results in the City paying a significantly high amount of fixed costs.  Customarily, agencies of our size are at a higher ISL level.

Annually, the benefits Broker/Consultant goes out to the market for competitive pricing when negotiating a renewal or before recommending a change to the stop-loss carrier.  Additionally, CBIZ conducted a study to determine the appropriate ISL level to recommend to COSL.

Unlike other years, some challenges were encountered during this year’s bidding process as most of the carriers declined to submit a proposal. Out of 16 companies, only two submitted quotes, which came higher than the rate our existing stop-loss carrier (Matrix Group Benefits, LLC). Matrix Group Benefits provided a Renewal Proposal for Fiscal Year 2024-2025 – ISL of $100,000 and 2 other lasers: one for $135,000 and one for $235,000. 

Following the study and the bidding process, we believe that the following two options may be the most feasible:

1. Increase the ISL limit from $50,000 to $100,000 – Savings in the Annual Stop-Loss premiums of $175,600 (-23.6%).
2. Increase the ISL limit from $50,000 to $100,000 and add an ASL deductible of $50,000 – Savings in the Annual Stop-Loss premiums of $226,000 (-30.4%).

It would be our recommendation to select option #2 which will provide the highest savings to the City. Additionally, we are recommending maintaining the same employees’ contribution and the Employee Benefit Trust funding level due to its favorable reserves position, and improved claims performance.
 

I MOVE TO APPROVE REMAINING WITH MATRIX GROUP BENEFITS, LLC AS OUR STOP-LOSS INSURANCE CARRIER AND SELECT POLICY OPTION #2 - AS PRESENTED.