Agenda 12/16/2008 Item #10H
EXECUTIVE SUMMARY
Agenda Item No, 10H
December 16, 2008
Page 1 of 2
Recommendation to approve the purchase of Group Health Reinsurance coverage for
calendar year 2009,
OBJECTIVE: To protect the group health fund from catastrophic losses through the purchase of
group health reinsurance coverage,
CONSIDERATIONS: The Board of Commissioners through its Risk Management Department
administers a partially self-funded Group Health Insurance Program (the Plan) for its employees and
their eligible dependents, Group Health reinsurance coverage is purchased to protect the health plan
against adverse loss experience, Two types of reinsurance coverage are available. Aggregate
excess insurance provides coverage to the Plan if total losses exceed an aggregate deductible.
Specific excess insurance protects the plan if a covered member incurs claims in excess a specific
deductible, Currently, the County purchases specific excess insurance through Symetra with a
specific deductible of $175,000 per member. The specific excess coverage provides a maximum
lifetime benefit of $2,000,000 per covered member,
Willis, Inc" the County's benefits brokerage and actuarial firm, marketed the excess health insurance
program on behalf of the County, Proposals were sought from seven carriers, Specific retention levels
ranging from $150,000 per claimant to $300,000 per claimant were sought. A total of three carriers
offered proposals providing eight coverage options, Four carriers declined to quote,
After reviewing the options, Willis recommends the purchase of specific excess insurance with a
deductible of $175,000 per claimant through Symetra, Although this option requires an increase in the
rate of 40,1 %, Willis performed an analysis of current claims activity and determined that a $175,000
retention level provided the potential lowest net cost when comparing the cost of coverage and the
probability of an excess insurance recovery, Symetra will continue to offer a $2,000,000 lifetime limit
per member. Symetra carries a Best's "A" (Superior) rating,
The actuary also analyzed the purchase of aggregate excess insurance, The cost of aggregate
coverage is $51,600 per year. However, based upon the terms of coverage, the actuary determined
that there is a 99% probability that the aggregate deductible would never be reached, Thus, the
purchase of aggregate reinsurance is not recommended,
FISCAL IMPACT: The total estimated cost of group health reinsurance in FY 09 is $1,310,124 based
upon an average enrollment of 2,150 employees, The budget for reinsurance in FY 09 is $1 ,304,637,
Therefore, a budget amendment of $5,487 is needed to fund this purchase, Funds are available in
Fund 517, Group Health reserves to fund this purchase.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this
item.
LEGAL CONSIDERATIONS: There are no legal considerations associated with this item, WEM
Assistant County Attorney,
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RECOMMENDATION: It is recommended that the Board approves the purchase of group health
reinsurance as outlined in the executive summary; authorizes the Risk Management Director to sign
the documents necessary to commence coverage; and that the Board approves a budget amendment
in the amount of $5,487 for this purchase,
PREPARED BY: Jeffrey A. Walker, CPCU, ARM, Director, Risk Management
Page 1 of 1
Agenda Item No. 10H
December 16, 2008
Page 2 of2
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
Item Summary:
10H
Meeting Date:
Recommendation to approve the purchase of Group Health Reinsurance coverage for
calendar year 2009. (Jeff Walker, Risk Management Director) ($1,310,124)
12/16/20089:00:00 AM
Prepared By
Jeffrey A. Walker, CPCU,
ARM
Risk Management Director
Date
Administrative Services
Risk Management
11/20/20089:01 :31 AM
Approved By
Jeffrey A. Walker, CPCU,
ARM
Risk Management Director
Date
Administrative Services
Risk Management
11/20/200811:30 AM
A pproved By
Len Golden Price
Administrative Services Administrator
Date
Administrative Services
Administrative Services Admin.
12/4/20083:25 PM
Approved By
OMS Coordinator
Applications Analyst
Information Technology
Date
Administrative Services
12/4/2008 4:26 PM
Approved By
Jeff Klatzkow
County Attorney
Assistant County Attorney
County Attorney Office
Date
12/5/20082:13 PM
Approved By
Laura Davisson
County Manager's Office
Management & Budget Analyst
Office of Management & Budget
Date
12/5/20083:19 PM
Approved By
James V. Mudd
County Manager
Date
Board of County
Commissioners
County Manager's Office
12/5/20088:51 PM
file:IIC:\AgendaTest\Export\ 118-December%20 16,%202008\ I 0.%20COUNTY%20MAN...
12/1 0/2008