H-GAC annually reviews insurance coverages for its employees to assure that competitive rates are achieved and competitive medical coverage is offered. Factors affecting the rates quoted to H-GAC include the demographics of our employee population, our claim history over time, our tenure with providers, and the overall market for the coverage levels proposed. The claim rate during the current year is 66.3%.  This favorable rate proved advantageous as illustrated in the following discussion. This next coverage year, that begins October 2018 through September 2019, all benefits lines are eligible for renewal.

HEALTH COVERAGE

H-GAC considered a wide range of options in selecting a carrier and a plan design which included a fully insured plan (current design) vs self-funded plan, changing carriers, increasing deductibles, reviewing Consumer Driven Health Plans with a Health Savings Account as well as making minimal plan design changes and alternative cost sharing scenarios.

H-GAC, received quotes from Blue Cross/Blue Shield (current provider) Cigna, Texas Municipal League, United Health Care and Humana. Each provider quoted a range of coverage with multiple plan designs and deductibles. Two providers, Blue Cross/ Blue Shield and Cigna, quoted coverage that was at or below our current cost.  

The plan being offered by Blue Cross Blue Shield, with a 1.0% decrease from the current rate, is the same plan design currently in place. While this offer was not the least expensive, the plan design remains unchanged from last year thus no disruption in medical providers or prescriptions will be required of our employees.

The Cigna proposal offers a 2% decrease for a similar plan design as our current plan, but requires bundling of dental, vision, life, and ltd coverage to achieve this rate.  The savings realized in medical coverage compared with BCBS of, $31,612, is reduced by the increase in dental cost $5,363, vision $2,286, and Life/Ltd $7,007.  Therefore, the two plans viewed globally across all insurance coverages differ by $16,956.

Staff recommends engaging Blue Cross/Blue Shield for medical coverage to avoid the disruption associated with changing insurance providers. In addition, Blue Cross/Blue Shield, when combined with preferred Dental, Vision, and  Life/Accidental Death Insurance, realized increased savings over Cigna's quoted rate.

DENTAL COVERAGE

H-GAC offers Dental insurance to its employees. Aetna, our current provider, offered an initial renewal at 17% above the current rates. Other proposals were received from Delta Dental, United Concordia, Cigna, MetLife, Lincoln Financial, Guardian, First Continental Life, Humana, United Health Care, Blue Cross Blue Shield and Reliance Standard Insurance. Below is a comparison of H-GAC’s current carrier, other carrier quotes that were lower than current plan cost and descriptive notes.

Delta Dental’s quote was not comparable to the other plans offered in that it provides a reduced reimbursement for all procedures.  Similarly, United Concordia achieved savings by altering the current plan design.  Both MetLife and Cigna offered comparable plan designs to the current plan; however, Cigna’s proposal was contingent on receiving the medical insurance renewal.

Staff recommends engaging MetLife to provide Dental insurance.

VISION INSURANCE

H-GAC also offers Vision insurance to its employees. H-GAC received the current carrier’s (Aetna) renewal quote of a 3% increase and thirteen quotes from various other carriers. The most compelling quote came from EyeMed at a reduction in cost of -7%. EyeMed also offers a 4-year rate guarantee.

Staff recommends engaging EyeMed to provide Vision insurance.

LIFE/ACCIDENTAL DEATH AND DISMEMBERMENT/LTD INSURANCE

H-GAC offers Life Insurance/AD&D and Long-Term Disability insurance to its employees. H-GAC received the current provider’s (The Hartford) renewal quote at 20% over current cost. Other carriers that provided quotes were Reliance Standard, Lincoln, Voya, Symetra, Prudential, United Health Care, Mutual of Omaha and Guardian. Below is a comparison of H-GAC’s current carrier and other carriers who offered similar plan designs at a lower cost.

Staff recommends engaging Reliance Standard for this coverage. This type of telemedicine plan was offered through Wellvia Solutions to H-GAC employees over two years ago. The inclusion of this service no longer recommended since all of the major carriers include it in their service.

Staff recommends ending our contract with Wellvia Solutions which provides an immediate savings of $8,532 annually.

SUMMARY

H-GAC has been able to secure cost savings on the insurance benefits offered to employees for three main reasons.  First, a favorable claim year.  Secondly, H-GAC began a wellness initiative about five years ago, and the involvement in those efforts by staff has improved their overall health as evidenced by fewer claims per capita.  Finally, education of staff on alternative treatment options such as urgent care centers instead of emergency room treatment has resulted in cost sensitivity by our employees.

As a result, H-GAC can offer employees a more robust medical plan than previously offered, little to no disruption in dental and vision service, offering the same benefit for life insurance/AD&D and long-term disability while eliminating the stand-alone telemedicine but having it as part of the medical insurance coverage. In our opinion this solution is the best selection for the next benefits cycle.

Benefit Pool

Yes

Request Board authorize negotiation of contracts in the order listed for 2018-2019 Employee Benefits renewal. (Staff Contact: Nancy Haussler)