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r- <br />NOV 3 1987 <br />BOOK 70 FAGS 2 <br />TO: Members of the <br />Board of County Commissioners <br />DATE: October 29, 1987 <br />SUBJECT: HEALTH INSURANCE <br />FROM: Joseph A. Bair <br />OMB Director <br />Description and Conditions <br />The American General Group Insurance Company contract for <br />administrating the Indian River County group health plan was due for <br />renewal October 1, 1987. American General Group Insurance Company is <br />requesting the administrative fee per employee/per month be increased. <br />to $10.76 from $9.75. The cost of stop loss insurance (individual <br />pooling) has also increased to $8.73 per month per employee from $7.65. <br />Indian River County has not increased the monthly premium for <br />over two (2) years even with increasing the medical cost. National <br />statistics show that medical costs rose 15% in 1987 and are projected <br />to increase 12% in 1988. American General Insurance Company is <br />recommending we increase the amount set aside in the trust account to <br />cover claims. The trust account had a balance in October 1986 of <br />.approximately $275,000 which diminished to less than $120,000 in <br />September 1987. An actuarial analysis has found that we need a <br />minimum of $375,000 in the account. <br />The County plans to absorb the increase in health insurance <br />costs for 1987/88. None of the increase will be borne by the <br />employees. The increase in the insurance benefits is up and above the <br />5% pay increase. <br />We are anticipating that 790 employees will be covered under the <br />health insurance of which 550 will have a family coverage and 240 will <br />be covered under the single plan. <br />Additional Information <br />COMPARISION <br />INDIAN RIVER COUNTY INSURANCE PLAN <br />1985/1986 1986/1987 1987/1988 <br />Approved Approved Proposed <br />Insurance Premium; <br />Single 70.00 70.00 85.45 <br />Family 167.50 167.50 221.22 <br />Expected Claim Liability: <br />Employee <br />737.87 <br />737.87 <br />892.82 <br />Dependent <br />1,249.36 <br />1,249.36 <br />1,511.72 <br />Maximum Claim Liability: <br />Employee <br />922.34 <br />922.34 <br />1,116.03 <br />Dependent <br />1,561.70 <br />1,561.70 <br />1,889.66 <br />Aggregate Annual Premium <br />9,000.00 <br />9,270.00 <br />11,885.00 <br />Administrative Premium/ <br />per month <br />10.99 <br />9.75 <br />10.76 <br />Specific Pooling <br />At $50,000 Per krployee/Month <br />6.60 <br />7.65 <br />8.73 <br />At $60,000 Per Employee/Month <br />0 <br />6.60 <br />7.65 <br />24 <br />