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C 11.F. GROUP HEALTH INSURANCE RENEWAL (FY 1999-2000) BLUE CROSS BLUE SHIELD OF FLORIDA AND JOHN ALDEN LIFE INSURANCE COMPANY The Board reviewed a Memorandum of September 14, 1999: TO: James E. Chandler County Administrator FROM: Ron Baked Director of Personnel DATE: September 14, 1999 SUBJECT: Group Health Insurance Renewal for FY 10/01/99 - 09/30/00 Staff requests consideration ofthe following information at the September 14, 1999, regular meeting of the Board of County Commissioners. Background Back in March of this year, Blue Cross Blue Shield, Third Party Administrator and John Alden the re -insurance carrier initially proposed a 41% or $2,391,681.60 maximum aggregate increase to the county's group health plan. There are several factors which have contributed to the increase of the group health plan. Claims volume activity has increased by approximately 281/6 which is an integral part of the BCBS retention formula for determining the required administrative fees (see attached summary which provides current rates and the proposed rates). In addition, the county's claims experience has been unfavorable for this fiscal year with an increase of about 241/6 in paid claims compared to the same period of time last year (see attached). Analysis Since the county is unable, at this time, to make significant changes to the Plan Design or Contribution levels to offset the increase, our Agent of Record has recommended minor allowable changes to the plan. These minor changes would reduce the cost from 41% to 37%. The 37% represents a maximum aggregate increase to the county's group health plan of $2,162,635.20, resulting in a savings of $229,046.50. Recommendation Based on the aforementioned, staff is requesting the Board to approve and execute the attached contracts for FY 10/01/99 - 09/30/00 with Blue Cross Blue Shield of Florida as our Third Party Administrator, and John Alden Life Insurance Company as the re -insurance carrier. SEPTEMBER 21,1999 55 Y 1; •