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AI# 10248
Regular City Council Meeting
6.21.
12/14/2021:
Information
Agenda Item
Resolution - Health Benefits:
Consider a resolution authorizing the Mayor to execute for, and on behalf of the City of Lubbock, the BlueCross BlueShield of Texas Administrative Services Only Benefit Program Application, for the Employee Group Health Plan for Plan Year January 1, 2022, to January 1, 2023.
Item Summary
The annual Administrative Services Only (ASO) Benefit Program Application (BPA) renews the group medical and dental plan coverage for the City of Lubbock employees and retirees, effective January 1, 2022. The ASO BPA is attached.
The attached table summarizes the 2022 renewal rates, Per Employee Per Month (PEPM).
The medical plan administrative fee will increase by 1.7%. The dental administrative fee will not increase.
The prescription plan administrative fee increases by 2.2%. However, the City’s benefit consultant, Travis Sartain, of Marsh & McLennan Agency (MMA) negotiated an increase in the drug rebate credit: a $392,482 estimated cost avoidance. Negotiations also included a change in generic drug processing and specialty drug reimbursement. Single Source Generics will process at 82.20% of Average Whole Price versus the current 19% of Average Whole Price – an approximate savings of $380,000. The Advance Payment Review is a credit to our fees for BCBSTX to audit and deliver on the single source generic claims and to assure that specialty drugs are reimbursed at the highest discount available.
The City of Lubbock is contracted with BCBSTX effective January 1, 2018, for a 5-year period ending December 31, 2022. The ASO BPA is for a 1-year period. A RFP for Medical, Dental, Pharmacy Benefit Management, Vision, COBRA, and Flexible Spending Account Administration is scheduled for distribution in May 2022.
Fiscal Impact
The administration fees for administering the health plans are increasing but are offset by the change in the prescription plan rebates and credit of $341,365 based on a participant count of 2,491.
Staff/Board Recommending
Bill Howerton, Deputy City Manager
Clifton Beck, Director of Human Resources
Attachments
Resolution - BBSTX Admin Services Only Benefit Program Application
Benefit Program Application
Health Benefits Admin Services Table
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