Memorandum                                      

City of Lawrence

Human Resources

TO:	David L. Corliss, City Manager
FROM:	Lori Carnahan, Human Resources Manager Michelle Spreer, Benefits Specialist
CC:	Diane Stoddard, Assistant City Manager
DATE:	October 16, 2014
RE:	2015 Stop-Loss Insurance

Stop-loss coverage is insurance that protects employers who self-fund their health plans against catastrophic losses.  The stop-loss carrier becomes liable for losses in excess of specified limits. Specific coverage insures the City for claims over a certain threshold relating to any one individual.  Aggregate coverage insures the City over a certain threshold related to all claims incurred. 

Each year the City purchases stop-loss coverage for the Employee Healthcare Plan. Hays Companies on the City’s behalf obtained quotes for stop-loss coverage. Five companies responded.  The incumbent Voya (formerly ING) and Cigna were the most favorable quotes.  Both were given final items the City wished to have addressed before making a recommendation.  Voya ultimately provided the most financially favorable quote with the fewest restrictions. The Voya quote is valid through October 31, 2014.

Voya has provided exceptional customer service and clear communications to the City during 2014. In addition, the reimbursements to the city for claims have been timely.

The Human Resources division budgeted for a 25% increase to stop loss premiums in 2015.  The recommended renewal is below budgeted parameters for both premium and maximum claim liability with a combined increase of 9.8%. 

The Human Resources division requests approval to renew contract with Voya for 2015 stop-loss coverage for the Employee Healthcare Plan. We request the following action be placed on the October 21^st City Commission agenda.

Other vendor contracts that are on auto renewal each year between RFP’s include ASI (Flexible Spending), Optum Health (COBRA administration), New Directions Behavior Health (EAP services), Cigna, Delta Dental and MedTrak. The city will continue the contract with each vendor for 2015.

Requested Action:

Authorize the City Manager to execute the necessary agreements with Voya to provide stop-loss coverage at the current levels for the City’s Employee Healthcare Plan for 2015 in the amount of $1,031,603 and Cigna for interface fees in the amount of $14,958, as recommended.