Agenda 11/12/2024 Item #16E 5 (Purchase of group hearth reinsurnace through SunLife, at en aestimated annual cost of $1,198540.80, effective January 1, 2025)11/12/2024
Item # 16.E.5
ID# 2024-1911
Executive Summary
Recommendation to approve the purchase of group health reinsurance through SunLife, at an estimated annual cost of
$1,198,540.80, effective January 1, 2025.
OBJECTIVE: To protect the Group Health Insurance Fund against catastrophic losses through the purchase of group
health reinsurance coverage.
CONSIDERATIONS: The Board of County Commissioners (“Board”), through the Risk Management Division,
sponsors a partially self-funded Group Health Insurance Program (“the Plan”) for Board employees, participating
constitutional agency employees, and their eligible dependents.
To protect the Plan against significant financial losses, group health reinsurance, or “Stop Loss” insurance, is purchased.
Two types of reinsurance coverages are generally available:
1. Specific Excess Insurance: Protects the Plan by covering claims that exceed a “per member” deductible or self-
insured retention.
2. Aggregate Excess Insurance: Provides coverage if the Plan’s total losses exceed an annual aggregate deductible.
Due to the high likelihood that the aggregate deductible will not be met, the purchase of this coverage is not
recommended.
Currently, the County purchases Specific Excess Insurance through SunLife with a self-insured retention level of
$750,000 per member. This coverage will expire at midnight on December 31, 2024.
For the renewal effective January 1, 2025, the County’s benefits brokerage and consulting firm, Willis Towers Watson
(WTW), marketed the Stop Loss program at three retention levels: $1,000,000, $750,000, and $500,000. The County
sought the following policy provisions:
a) An experience-rated refund option,
b) A second-year rate cap to manage market volatility,
c) No specific lasers on members, and
d) Alignment with the County’s Plan definition of Medical Necessity in coverage determinations.
WTW approached seven (7) carriers, of which two provided quotes. Most carriers declined to quote due to their inability
to meet the County’s specific terms or match the rate cap guarantee negotiated with the incumbent last year.
1. Sun Life (incumbent; quoted 37.9% above current rates and also has the lowest quote)
2. Voya (declined to quote)
3. Optum (declined to quote)
4. HM Insurance Group (declined to quote)
5. QBE (declined to quote)
6. Symetra (declined to quote)
7. ParnterRe (quoted 5.23% above lowest quote; not competitive)
WTW performed an actuarial analysis of the proposals quoted to determine the retention level and carrier to
recommend. WTW recommends renewing coverage with SunLife for the following reasons:
• SunLife’s premium quotations were the lowest at every retention level.
• SunLife quoted no policy lasers for members.
• By renewing with SunLife, the County could receive an experience-rated refund for the 2023 policy year.
• Stability in working with one carrier for multiple years is perceived as favorable by the markets. The County has
been insured with SunLife for the last nine (9) years.
• Sun Life carries an A.M. Best’s “A+” (Superior) financial strength rating.
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11/12/2024
Item # 16.E.5
ID# 2024-1911
WTW further recommended the purchase at a $750,000 retention level as stated in their report as follows:
“When reviewing the historical claims experience, specifically the number of claimants that have exceeded the listed
specific deductible levels being considered, Collier County will likely see the most savings by staying at the current
deductible level.”
In summary, WTW recommends that the County select SunLife at a $750,000 retention level for the reasons stated
above. The Risk Management Director agrees with this recommendation.
Upon approval, coverage will commence on January 1, 2025, ending at midnight on December 31, 2025.
The proposed rates are as follows:
Carriers: SunLife PartnerRe
Composite Rate Per Employee Per Month
(PEPM)
$43.20 $45.46
Specific Deductible $750,000 $750,000
Estimated Monthly Premium $99,878.40 $105,103.52
Estimated Annual Premium $1,198,540.80 $1,261,242.24
FISCAL IMPACT: The estimated cost for group health reinsurance in calendar year 2025 is $1,198,540.80, calculated
based on an average enrollment of 2,312 employees and a composite rate of $43.20 per enrolled employee per month.
Premiums will be paid monthly according to actual enrollment figures. Funds are available in Fund 5017, Group Health
and Life Insurance, cost center 121640, for this purchase.
GROWTH MANAGEMENT IMPACT: There is no growth management Impact associated with this item.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to form and
legality and requires a majority vote for approval. -JAK
RECOMMENDATIONS: To approve the purchase of Group Health Reinsurance from SunLife and authorize the
County Manager or designee to sign all necessary documents to bind and initiate coverage effective January 1, 2025.
PREPARED BY: Sonja L. Sweet, Risk Manager, Risk Management Division
ATTACHMENTS:
1. 2024 Stop Loss Cost Analysis
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