Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Agenda 12/09/2025 Item #16F 2 (Approve the purchase of Group Health Reinsurance from SwissRe)
12/9/2025 Item # 16.F.2 ID# 2025-4735 Executive Summary Recommendation to approve the purchase of Group Health Reinsurance from SwissRe and authorize the County Manager or designee to sign all necessary documents to bind and initiate coverage effective January 1, 2026. 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 Human Resources 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 coverage 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, 2025. For the period starting January 1, 2026, the County’s benefits brokerage and consulting firm, Willis Towers Watson (WTW), marketed the Stop Loss program at three retention levels: $1,000,000, $800,000, and $750,000. 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 six (6) 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. Swiss Re (quoted 24.4% above current rate and was the lowest bid) 2. Sun Life (incumbent; quoted 24.9% above current rates) 3. Symetra (uncompetitive at 32.3% above current rates) 4. Voya (declined to quote as they could not be competitive) 5. HM Insurance Group (declined to quote due to CCG’s poor loss history) 6. QBE (declined to quote due to CCG’s poor loss history) WTW performed an actuarial analysis of the proposals quoted to determine the retention level and carrier to recommend, and found that the binding coverage with Swiss Re is the best financial option. Based upon current employee counts, the projected savings would be $7,000 in premiums. Highlights from the Swiss Re quote include: • Swiss Re’s premium quotations were the lowest at every retention level. • Swiss Re quoted no policy lasers for members. • Swiss Re carries an A.M. Best’s “A+” (Superior) financial strength rating 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.” Page 6557 of 9661 12/9/2025 Item # 16.F.2 ID# 2025-4735 In summary, in conjunction with WTW, Human Resources recommends that the County select Swiss Re at a $750,000 retention level for the reasons stated above. Upon approval, coverage will commence on January 1, 2026, ending at midnight on December 31, 2026. The proposed rates are as follows: Carriers: SunLife Swiss Re Composite Rate Per Employee Per Month (PEPM) $53.96 $53.72 Specific Deductible $750,000.00 $750,000.00 Estimated Monthly Premium $126,500 $125,917 Estimated Annual Premium $1,518,000 $1,511,000 This item is consistent with the Collier County strategic plan objectives of responsible governance, promoting fiscal stewardship, and sound budget oversight. FISCAL IMPACT: The estimated cost of group health reinsurance for calendar year 2026 is $1,511,000, representing a 24.4% increase compared to 2025. This estimate is based on an average enrollment of 2,344 employees and a composite premium rate of $53.72 per enrolled employee per month. Premiums will be paid monthly and will reflect actual enrollment levels. Funds for this expenditure are available in Fund 5017, Group Health and Life Insurance, cost center 121640. GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this action. 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 RECOMMENDATION(S): To approve the purchase of Group Health Reinsurance from SwissRe and authorize the County Manager or designee to sign all necessary documents to bind and initiate coverage effective January 1, 2026. PREPARED BY: Sonja L. Sweet, Risk Manager, Human Resources Division ATTACHMENTS: 1. Marketing Results for Collier County Government - 2026 Stop Loss RFP_Updated Page 6558 of 9661 wtwco.comStop Loss Procurement Results and AnalysisOctober 3rd, 2025Prepared for Collier County Government© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Page 6559 of 9661 wtwco.com1General disclaimer© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.WTW is providing this information to you solely as your consultant and/or broker (as applicable to our arrangement). The information contained herein is not legal, tax or medical or other professional advice and should not be relied upon or construed as such. We encourage you to consult with your own legal, tax, medical or other professional advisor relating to the contents of this document, as appropriate.This document was prepared for your sole and exclusive use and on the basis agreed by you. It was not prepared for the use by any other party. The information contained herein may contain confidential and proprietary information and work product of WTW, and this document and the information contained herein may not be used, reproduced, distributed or disclosed to third parties without WTW’s prior written consent. WTW owns all rights, title and interest, including but not limited to all intellectual property and proprietary rights in and to this document and all information contained herein. WTW does not assume any responsibility for or accept any duty of care or liability to any third party who may obtain a copy of this document and any reliance placed by such party on it is entirely at its own risk.Some of the information in this publication may be compiled from third-party sources we consider reliable; however, WTW does not guarantee and is not responsible for the accuracy of such information. WTW does not undertake to update the information included herein after the date on which it is provided to you. Accordingly, readers should be aware that certain content may have changed since the date of this publication.Page 6560 of 9661 wtwco.comTable of contents1.Summary2.Comparison of proposals3.Benchmarking4.Discussion and qualifications5.Compensation disclosure© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.2Page 6561 of 9661 wtwco.comSummary3© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Page 6562 of 9661 wtwco.comMarket continues to grow, as large claims continue to increase in both frequency and severity, adding budget variability and driving healthcare cost for our clientsStop loss market update4© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.•After a milder 2025 renewal cycle, higher claim severity is likely to push underwriters toward more aggressive pricing for 20261•Over the benefit years from 2020 to 2023, 88% of employers were likely to experience a stop loss claim in any given year2•Presence of at least one known lasered claimant has decreased to 16%, unchanged from 2024.1This is due to the increasing prevalence of a “no new laser” provisionCarrier environment•Rising costs of high-dollar gene therapies, advanced cancer treatments, and large inpatient claims continue to put downward pressure on pricing1•49% of survey respondents report a claimant more than $1M paid in the last two policy years, with 16% indicating claims more than $2M1•In 2024, 47 claims over $3M, with 10 being over $5M and the highest exceeding $12M2–There were 32 claims over $3M in 2023 and 18 in 2022High-Cost Claimant (HCC) frequency•Newborn/Infant care HCCs continue to rise (with the second-highest number of million-dollar-plus claims following malignant neoplasms•Congenital abnormalities (lifelong conditions) have profound impacts and drive high costs, and can contribute to complications late in lifeRaising concern2•Cardiovascular disease/disorder became the top 2 claim category and musculoskeletal became the top 3 category, behind malignant neoplasms as top 1, moving leukemia, lymphoma and multiple myeloma into the top 4 spot•Malignant neoplasms continue to rank in the top spot for both reimbursements and total spend, amounting to nearly thrice that ofthe second-leading condition (cardiovascular)High-cost conditions2•Million-dollar claims on a per million covered employees basis rose 29% in the past year and 61% over the past four years2•15% to 20% average renewal increasesCarrier loss ratios1 Source: 2025 Aegis Risk Medical Stop Loss Premium Survey. 2 Source: 2025 Sun Life High-cost claims and injectable drug trends analysis report.Page 6563 of 9661 wtwco.com5Stop Loss Collaborative highlights © 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.SLC contract features come at no or discounted cost.Unlimited lifetime maximum Experience refundsCovered benefits “mirror” medical plan No new laser and renewal rate cap guarantee1Waiver of disclosure statements Choice of plan options to allow for customization of employer needs120% aggregate coverage at 125% ratesOur vendor partnersOur current partners balance competitive choice, allowing us to negotiate favorable contract terms, conditions and experience refunds.1Perpetual no new lasers and rate caps are no longer standard in the industry. Carriers will give us at a minimum 12 months’ notice if the rate cap or no new laser provision will be pulled.Page 6564 of 9661 wtwco.com6Procurement summary© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.CurrentRenewal and RFP•Collier County Government (CCG) purchases stop loss from Sun Life with a $750,000 deductible.•Contract covers 12 months of paid run-out in addition to the policy year.•No members are lasered on the policy.•Current premium is $43.20 per employee per month (PEPM).•Sun Life has provided a renewal of 24.9% for a rate of $53.96 PEPM.•WTW procured bids from its Stop Loss Collaborative (SLC) partners, at the current terms as well as deductibles of $1,000,000 and $500,000.•Swiss Re provided a competitive firm proposal (+24.4%).•Symetra provided an uncompetitive firm proposal (+32.3% w/o laser considered, up to +71.4% w/ laser considered).•Voya, HM, and QBE declined to quote (DTQ) due to being uncompetitive (Voya) and poor loss history (HM and QBE).Results•Swiss Re is the best financial offer at the current deductible level with $7,000 savings compared to Sun Life’s final renewal offer. •If Collier County Government is willing to consider more risk, increasing the deductible by $250,000 with Swiss Re would reduce the annual premium by $564,000 compared to renewal (2 claims would be required over the new deductible to offset the savings).•If Collier County Government renews with Sun Life and are running favorably, they may earn an experience refund from their current contract If Collier County Government does not renew with Sun Life, they will forfeit the potential refund.$1,215,000$1,518,000$1,511,000$947,000$0$200,000$400,000$600,000$800,000$1,000,000$1,200,000$1,400,000$1,600,000Current Renewal Swiss Re (Current Deductible) Swiss Re ($1,000,000 Deductible)Renewal year annual costsAnnual Premium + Data Feed FeesAggregating SpecificLaser Liability24.9% premium increase from current24.4% premium increase from current22.1% premium savings from currentwith increase in ISLPage 6565 of 9661 wtwco.comComparison of proposals7© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Page 6566 of 9661 wtwco.com8Coverage terms and provisions© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Stop loss provisions Current RequestedEffective date 01/01/2025 01/01/2026Specific deductible level(s) $750,000 $750,000; $1,000,000; $500,000Contract terms (incurred/paid period) 12/24 12/24Pharmacy included? Yes YesMental health/Substance abuse included Yes YesMaximum liability (annual/lifetime)Annual: UnlimitedLifetime: UnlimitedAnnual: UnlimitedLifetime: UnlimitedActively at work and non-confined provisions waived Yes YesPre-65 retirees covered Yes YesPost-65 retirees covered Yes YesPage 6567 of 9661 wtwco.com9Advantage programCoverage terms and provisions (continued)© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.CriteriaSun Life Swiss ReNo new lasers at renewal includedYes YesRenewal rate cap includedYes; 40% Yes; 40%Experience rated refund included(Target loss ratio/Experience refund formula/Maximum refund of premium)Yes65/25/15Yes65/25/16.25Data feed fee fundingSun Life has inherently taken the data feed fee into account when setting their premium rates; they do not break the subsidy into a separate fund.Swiss Re has inherently taken the data feed fee into account when setting their premium rates; they do not break the subsidy into a separate fund.Medical carrier shared savings fee covered*Up to 40% of savings Up to 40% of savings*It is important to consider the shared savings fee terms between the client and their medical administrator to ensure the fees would be covered in full by the selected stop loss carrier.Page 6568 of 9661 wtwco.com10Caveats and contingencies© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.CriteriaSun Life Swiss ReQuote illustrative or firmFirm FirmIf firm, expiration date10/20 10/25Proposed lasersNo NoTerminal liability option quoted No NoAdditional unique terms and conditions/clauses None NonePage 6569 of 9661 wtwco.com11Financial summary© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Notes:•Results based on total enrollment of 2,344.•Summary does not capture potential Experience Refunds, which are not guaranteed.In Force PolicyCarrierSun Life Sun Life Sun Life Swiss Re Sun Life Sun Life Sun Life Swiss ReProposal Status 1st Offer Firm BAFO Firm BAFO Firm BAFO Firm 1st Offer BAFO Firm BAFOFirm Through Date10/20/25 10/20/25 10/25/25 10/20/25 10/20/25 10/20/25 10/25/25Specific Contract Basis 12/24 12/24 12/24 12/24 12/24 12/24 12/24 12/24Specific Deductible$750,000 $750,000 $750,000 $750,000 $800,000 $1,000,000 $1,000,000 $1,000,000Total Fixed Costs $1,215,000 $1,701,000 $1,518,000 $1,511,000 $1,470,000 $1,170,000 $1,046,000 $947,000$ Increase$486,000 $303,000 $296,000 $255,000 ($45,000) ($169,000) ($268,000)% Increase40.0% 24.9% 24.4% 21.0% -3.7% -13.9% -22.1%Specific Premium Rates by coverage tierComposite$43.20$60.48 $53.96 $53.72 $52.27 $41.61 $37.17 $33.68Page 6570 of 9661 wtwco.com12Swiss ReAlternative specific deductible analysis© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.•Recommendation is to maintain the $750K specific deductible level for 2026.•When reviewing the historical claims experience, specifically the number of claimants that have exceeded the listed specific deductible levels being considered, Collier County Government will most likely exceed the number of claimants for each of the applicable specific deductible levels and not see any savings by increasing the risk.•The most premium savings potential that Collier County Government could achieve ($564K) is through the $1M specific deductible level. Current deductible AlternativeSpecific deductible$750,000 $1,000,000Specific premium rate$53.72 $33.68 Annual specific premium $1,511,000 $947,000Difference in premium versus current deductible $564,000 Difference in stop loss deductible$250,000Ratio2.2Historical claims over deductible levelCurrent year-to-date22Prior year11Second prior year32Assumed enrollment: 2,344 employees•Note that claimants are not exclusive and could exceed multiple deductible levels•Prior year claim amounts have not been adjusted for claim trendsThe above exhibit is provided to assist in evaluating your program and estimating plan expenses. The evaluation was performed using data obtained from you and those providing benefits under your plan, including, but not limited to, providers, vendors, insurers and administrators, and is unaudited. Due to unknown variables which can exist at the time this projection was performed, WTW cannot and does not guarantee any final outcomes.Page 6571 of 9661 wtwco.comBenchmarking13© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Page 6572 of 9661 wtwco.com142025 stop loss deductible prevalence by employer size© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.0%10%20%30%40%50%60%70%80%90%100%< 250 EEs250 – 499 EEs 500 – 749 EEs 750 – 999 EEs 1,000 – 2,499 EEs2,500 – 4,999 EEs5,000 – 7,499 EEs7,500 – 9,999 EEs10,000+ EEs$2M+$1.5M – $2M$1M – $1.5M$750K – $1M$500K –$750K$400K –$500K$300K –$400K$250K –$300K$200K –$250K$150K –$200K$100K –$150K$75K –$100K$50K – $75K≤ $50K$250K –$300K Above chart reads as follows: About 25% of employers with 1,000 to 2,499 employees have purchased specific stop loss coverage of$250K to $300K. The above chart is based on 2025 prevalence data provided by BCS, HM, Optum, PartnerRe, QBE, Sun Life, Swiss Re, Symetra and Voya, based on their full book of business (n = 9,877). Prevalence data should be used only as a point of reference. Stop loss deductible thresholds can vary greatly by employer industry and risk tolerance.Example:The most prevalent specific deductible level for clients of similar size is $250K to $300K.Page 6573 of 9661 wtwco.com152025 stop loss premium rates by deductible levels (continued)© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.$69.65$60.94$49.09$36.44$31.58$20.98$18.76$10.88$6.97$4.40$92.49$82.50$66.47$50.36$44.46$26.56$21.15$14.21$9.92$5.72$112.25$103.79$79.14$62.80$49.99$35.10$25.37$19.53$12.33$6.76$43.20$0$20$40$60$80$100$120$300K $350K $400K $500K $600K $750K $800K $1M $1.5M $2.0M25th percentileAverage75th percentileCollier County GovernmentPEPM composite ratesDeductible levelsSource: 2025 premium data were provided by BCS, HM, Optum, PartnerRe, QBE, Sun Life, Swiss Re, Symetra and Voya, and are based on their full books of business (n = 8,234). Benchmark data should be used only as a point of reference. Stop loss coverage can vary greatly by employer industry and risk tolerance.Page 6574 of 9661 wtwco.comDiscussion and qualifications16© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Page 6575 of 9661 wtwco.com17Discussion and qualifications© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Caveats•All WTW SLC carrier partners’ proposals waive the requirement for disclosure, which requires signing a form indicating that you are providing data to the vendor to the best of your knowledge; carriers outside of the WTW SLC may require disclosure.–After the disclosure process (if applicable), the client should commit to the stop loss arrangement by signing the application.–If the client defers past the expiration date of the quote, the stop loss carrier has the right to ask for updated data and revise its quote.•Rates are subject to change if enrollment shifts by +/- 20% to 25% for most SLC partner carriers.–Generally, COBRA and retiree enrollment cannot exceed 15% of the covered group, but most of our carrier partners waive this constraint for our clients.–Rates are subject to a final census.•Stop loss carriers sometimes require case management programs be in place.•If the client’s summary plan document (SPD) is silent on any of a stop loss carrier’s exclusions, then the stop loss carrier’s contract list will prevail.Additional fees•Medical and pharmacy vendors may charge a data feed fee to provide reports to an external stop loss vendor.•In our experience, this data feed cost ranges from $0.00 to $4.00 PEPM ($0.00 PEPM was assumed in all calculations).•Some vendors have agreed to fund these data feed fees (see Coverage Terms and Provisions slide).•To be reimbursed by the stop loss carriers, clients are required to provide documentation of the applicable interface fees.Contractual disclosureParticipation in the WTW SLC also includes assistance from WTW resolving broad issues or systemic disputes between the client and the selected carrier, relative to products or services (e.g., processing of claims, data feed issues).•WTW’s role relative to any specific claim dispute would be limited to facilitation of discussion between the client and the carriers.•Please note that WTW is not able to provide an opinion on whether any particular claim denial is appropriate.Page 6576 of 9661 wtwco.comCompensation disclosure18© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Page 6577 of 9661 wtwco.comCompensation Disclosure – Marketed Products© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Alongside this Compensation Disclosure, you have been provided with a detailed summary and analysis of the incumbent quote(s) (and any recommended or alternate quotes, if applicable) based on what most aligns with the strategic direction you gave us in our pre-renewal strategy discussion. Below is a high-level summary of the incumbent carriers’/vendors’ compensation and recommended markets we approached on your behalf and any compensation included with these quotes. If you would like a copy of any proposal received, please let us know and we will provide it to you..Carrier/Vendor nameMarketed carriers/vendorsLine(s) of business ResponseSub-broker/ IntermediaryStandard compensationReferral/ Management FeeAdditional compensationSun Life (Incumbent) Stop Loss See analysis NA 0% NA 6%Swiss Re Stop Loss See analysis NA 0% NA 6%19Please note that the above quotes were originally obtained through the WTW Panels Process.Page 6578 of 9661 wtwco.comCompensation Disclosure – Marketed Products© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Below is a high-level summary of the additional carriers/vendors we approached on your behalf. If you would like a copy of any proposal received, please let us know and we will provide it to you. .Carrier/Vendor nameMarketed carriers/vendorsLine(s) of business ResponseSymetraStop LossUncompetitive (+32.3% firm w/o laser considered, up to +71.4% firm w/ laser considered)VoyaStop Loss Declined to quote (pricing not competitive)HMStop Loss Declined to quote (poor loss history)QBEStop Loss Declined to quote (poor loss history)20Please note that the above Symetra quote was originally obtained through the WTW Panels Process.Page 6579 of 9661 wtwco.comCompensation Disclosure – Incumbent Products© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Carrier/Vendor nameIncumbent carriers/vendors(i.e., renewals, rate guarantees)Line(s) of businessRenewal/Rate GuaranteeSub-broker/ IntermediaryStandard compensationReferral/ Management FeeConfirm hereAdditional compensationConfirm hereAllegiance Medical/Dental Renews 1/1/2028 NA Net of Commission NA NANavitus Rx Renews 1/1/2026 N/A Net of CommissionVSP Vision Renews 1/1/2027 NA 10% Buy Up Only NA NALincoln Financial Life & Disability Renews 1/1/2028 NAAll lines net of commission, except Vol Life/AD&D: 20%, LTD Buy-Up: 5.6%N/A NAPets Best Pet Insurance Auto-Renewal NA10% for first year, 5% for following yearsNA NA21In addition to the incumbents and carriers/vendors for the lines of coverages we marketed on your behalf, below is the other lines of coverage WTW manages for your account and the compensation we receive on an annual basis. These carriers/vendors are either on a rate guarantee or evergreen renewal for service providers. Page 6580 of 9661 wtwco.com© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Compensation Disclosure (continued)The proposals are presented in conjunction with the Brokerage Terms, Conditions and Disclosures document.As further described in your Brokerage Terms, Conditions and Disclosures document, we may receive other compensation such as contingent compensation related to the lines of insurance we place for you. Based on historical data, we estimate that our contingent compensation may range from 0% to 5% of the total premium we placed for all lines of insurance.Please review the details of the proposals included to ensure that these meet your expectations. The proposals may differ from your current policy, so we recommend that you read the specifications from the carrier/vendor in their entirety and compare them to your current policy.Should you have any questions about the proposals or concerns about what is included in this summary, please let us know at once. Please provide us with your selection of coverage. We will confirm the details of this selection in writing with you and the carrier/vendor.22Page 6581 of 9661 wtwco.comThank you for your continued partnership.23© 2025 WTW. Proprietary and confidential. For WTW and WTW client use only.Page 6582 of 9661