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'JUN 2 5 1996 Bou 64 PA -ii E801 TO. Honorable Board of County DATE: June 18, 1986 FILE: Commissioners FROM: oseA. Baird SUBJECT: Indian River County Group , OMB Director Health Insurance Plan Gulf Group Services Corporation"s contract for administering the Indian River County group health plan will be due for renewal October 1, 1986. Currently the health plan has adequate cash reserves, and we do not antici- pate the monthly health insurance premiums increasing. A 15% increase in medical costs was forcasted for the 1987 year which has been taken into con- sideration. Gulf Group Services Corporation is currently trying to negotiate a dis- count with Indian River Memorial Hospital and will be approaching the Doctor's Clinic in the near future for a discount. Staff has reviewed H.M.O. (Health Maintenance Organization) insurance plans and finds the major drawback to be a philosophical one. An H.M.O. plan designates the doctors and the hospitals the participant is to use and if he does so, it is covered at 100%, however, if he does not attend the designated doctor or hospital, nothing is covered. The only time the use of a non -designated doctor or hospital is covered is in the case of an extreme emergency. RECOMMENDATION I recommend the Honorable Board of County Commissioners remain with the health insurance plan under Gulf Group Services, Inc. GULF GROUP SERVICES CORPORATION MIAMI REGIONAL GROUP OFFICE 12121 PONCE DE LEON BOULEVARD, SUITE 735 / CORAL GABLES FLORIDA 33134 May 29, 1986 I Mr. Joseph Baird Budget Officer Indian River County Commissioners 1840 25th Street Vero Beach, Florida 32960 Dear Joe: NICK MORISCO Regional Group Manager TELEPHONE: DADE-305444-6588 BROWARD-305 764-1040 Representing: American General Group Insurance Company Gulf Life Insurance Company RE: GC 5372 This will confirm our renewal for the above group effective 10-1-86. A comparison of current and renewal costs is as follows: As can be seen, there is no change in the Maximum Annual Paid Claim Liability factors. There has been a minor increase in the Specific and Aggregate pooled premium however the Administrative Fee has decreased. The net result is an approximate 1% decrease in total costs. If the present pooling level of $50,000 were increased to $60,000 the current charge of $6.60 could be continued, which would result in an overall decrease of approximately 6.5%. Our underwriters have indicated that the reserve estimate as of 10-1-85 was $160,000. The reserve estimate as of 10-1-86 is $210,000. Joe, after you have had an opportunity to review the foregoing, let's get together with Phil and discuss. Sincerely, Nickorisco Current Renewal Maximum Annual Paid Claims Liability Employee $ 922.34 $ 922.34 Dependent $1,561.70 $1,561.70 Specific Pooling, Per Employee Monthly 6.60 7.65 Administrative Fee, Per Employee Monthly 10.99 9.75 Annual Aggregate Premium 9,000.00 9,270.00 As can be seen, there is no change in the Maximum Annual Paid Claim Liability factors. There has been a minor increase in the Specific and Aggregate pooled premium however the Administrative Fee has decreased. The net result is an approximate 1% decrease in total costs. If the present pooling level of $50,000 were increased to $60,000 the current charge of $6.60 could be continued, which would result in an overall decrease of approximately 6.5%. Our underwriters have indicated that the reserve estimate as of 10-1-85 was $160,000. The reserve estimate as of 10-1-86 is $210,000. Joe, after you have had an opportunity to review the foregoing, let's get together with Phil and discuss. Sincerely, Nickorisco