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R-89-1347 - 9/28/1989Mayor Mike Robinson Mayor Pro -tem Charles Culpepper Council Members John Hood Tish Oatman Pete Correa Ronnie Jean Jimmy Joseph City Manager Robert L. Bennett, Jr. City Attorney Stephan L. Sheets THE CITY OF ROUND ROCK 221 East Main Song Round Rock, Texas 786(14 512- 25.5 -3612 M E M O R A N D U M TO: All City Employees FROM: Linda Gunther, Personnel Manager DATE: October 4, 1989 SUBJECT: Health Insurance This is to inform you as of 10/3/89 the City employees participation with Blue Cross /Blue Shield Health insurance is under 75%. There- fore, Blue Cross /Blue Shield is declining coverage offered to City employees due to the low enrollment. All employees currently on Blue Cross /Blue Shield need to fill out enrollment forms with Texas Health Plans and return to Personnel by 10/5/89. If there are any questions please feel free to call. Thank Linda Gunther Personnel Office LG:bh /3 7 WHEREAS, the City of Round Rock has requested proposals to provide health insurance coverage for City employees, and WHEREAS, Blue Cross /Blue Shield has submitted the best proposal, and WHEREAS, the City Council wishes to accept the proposal of Blue Cross /Blue Shield to provide health insurance coverage for the City, Now Therefore, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the proposal of Blue Cross /Blue Shield is hereby accepted as the best proposal, and the Mayor is hereby authorized and directed to execute on behalf of the City a contract with Blue Cross /Blue Shield to provide health insurance coverage for the City. RESOLVED this 28th day of September, 1989. ATTEST: C- RS09289G LAND, City Secretary RESOLUTION NO. 137 2/7 A-i9z I MIKE ROBINSON, Mayor City of Round Rock, Texas Blue Cross Blue Shield Wrens, Inc Marketing September 11, 1989 Mr. David Kautz Finance Director City of Round Rock 221 E. Main Street Round Rock, Texas 78664 RE: Group Insurance Coverage for the City of Round Rock Dear Mr. Kautz: Sincerely, Richard Dungan District Sales Manager (512) 832 -0755 RD:ps The City of Round Rock has been a client of Blue Cross and Blue Shield of Texas, Inc. for many years. We have enjoyed serving the needs of your employees and their families. The introduction of an HMO in June has put the program in serious jeopardy by creating an adverse selection environment. For many years we have sought for a solution to enable coexistance with an HMO. To my knowledge, no one has found such a solution. For any insurance plan to work there must be a proper spread of risk. When more than one option is introduced, the chance to obtain this proper spread of risk is considerably reduced. We have responded to the specifications and offered four additional options. All are based on certain enrollment qualifications that will hopefully restore a proper spread of risk allowing us the opportunity to continue as your group health carrier. Should you have any additional questions or comment, please let me know. COMMENTS ON SPECIFICATIONS 1. Our Group Health proposal is contingent on the following: a. The City of Round Rock paying 100% of the employee only cost of the health plan selected. b. Enrollment being brought to a minimum of 180 or 75% of the eligible payroll, whichever is larger. c. A pre- existing condition exclusion will apply for all transfers from an HMO and their covered dependents and for all new hires and their dependents. 2. Currently there are only five employees covered for $5,000 of Term Life. All other employees are covered for $10,000. Our proposal is based on all employees being covered for $10,000 of Term Life coverage and the City of Round Rock paying 100% of the cost. 3. Our Group Dental is based on the City of Round Rock paying 100% of the employee only cost. I hereby certifiy that the response to this proposal is true and correct and is in compliance with all statutory provisions. Blue Cross and Blue Shield of Texas, Inc. company name 8000 Centre Park Drive, Suite 230 address Austin, Texas 78754 city /state /zip (512) 832 -0755 telep one signed District Sales Manager title September 11, 1989 date CERTIFICATION HEALTH BENEFITS SUMMARY Alternate Plan III Prepared for CITY OF ROUND ROCK By Blue Cross and Blue Shield of Texas, Inc. Inpatient Hospital Expenses* Semiprivate room (average semiprivate toward private) Covered days per calendar year Deductible per admission Inpatient certification required - if not certified, penalty applies. $ 500 $ 250 Maximum deductible per family $ 600 Out -of- hospital prescription drugs - If generic substitute 70% All usual hospital services including 70% blood, plasma, and intensive /coronary care Unlimited * Includes TexasCare programs of inpatient certification, length of stay assignment with concurrent review, second surgical opinions when necessary, discharge planning, and large case management. Medical- Surgical Expenses All eligible expenses, including 70% outpatient hospital Second surgical opinions if required 100% (with deductible waived) Deductible per calendar year per participant $ 200 - Includes three -month carryover 70% 100% HEALTH BENEFITS SUMMARY Alternate Plan III Page 2 Extended Care Expenses Home health 100% with calendar year maximum $ 10,000 Skilled nursing facilities 100% with calendar year maximum $ 10,000 Hospice 100% with lifetime maximum $ 20,000 Drug abuse and psychiatric care covered under Extended Care YES Accidental Injury Supplement (Medical - Surgical) $ 0 Drug Abuse and Psychiatric Care Expenses Maximum lifetime benefits $ 10,000 Inpatient hospital expenses 70% Outpatient Medical - Surgical expenses 50% Preventive Care Expenses Routine physicals, immunizations, well -baby care, vision exams, hearing exams (Medical - Surgical deductible waived) Maximum benefits per two -year period per participant $ 0 0 % Other Plan Features Lifetime maximum benefit per participant $1,000,000 Coinsurance Stop -Loss Your employees share in the cost of certain eligible charges with Blue Cross and Blue Shield of Texas up to a coinsurance maximum (not including the deductible, non - covered items or non - eligible expenses). $ 4,000 HEALTH BENEFITS SUMMARY Alternate Plan III Page 3 Maximum Coinsurance Stop -Loss Per Family $ 12,000 Coinsurance Stop -Loss pickup from prior N/A carrier Employees will be credited with the amount of Coinsurance Stop -Loss reached with your prior carrier. Medical - Surgical deductible pick -up from prior carrier Employees will be credited with the amount of the deductible reached with your prior carrier. Automatic continuation of coverage for newborn infants for the first 31 days following birth. Infants may be enrolled for coverage within the first 31 days after birth with no medical underwriting. A pre- existing exclusion will apply for new employees and dependents. If the patient is seen or treated for a condition by a practitioner during the three -month period immediately prior to the effective date of coverage, the patient must satisfy a 12 -month waiting period for that condition before coverage is available. benefits Dependent children are covered until age 25. Disabled dependent children can be covered beyond age 25. Physician benefits are paid according to reasonable charge profiles as determined by Blue Cross and Blue Shield of Texas. Coverage effective dates are contingent on the employee and dependents being "actively at work" on the date coverage would otherwise have become effective. RATES N/A YES YES Dependent children covered for maternity YES YES YES YES Employee Employee Employee Employee Only & Children & Spouse & Family $ 97.24 $176.92 $259.56 $313.81 HEALTH BENEFITS SUMMARY Alternate Plan III Prepared for CITY OF ROUND ROCK By Blue Cross and Blue Shield of Texas, Inc. Inpatient Hospital Expenses* Semiprivate room (average semiprivate toward private) All usual hospital services including blood, plasma, and intensive /coronary care Covered days per calendar year Deductible per admission Inpatient certification required - if not certified, penalty applies. Out -of- hospital prescription drugs - If generic substitute Unlimited $ 500 $ 250 70% 70% * Includes TexasCare programs of inpatient certification, length of stay assignment with concurrent review, second surgical opinions when necessary, discharge planning, and large case management. Medical - Surgical Expenses All eligible expenses, including 70% outpatient hospital Second surgical opinions if required 100% (with deductible waived) Deductible per calendar year per participant $ 200 - Includes three -month carryover Maximum deductible per family $ 600 70% 100% HEALTH BENEFITS SUMMARY Alternate Plan III Page 2 Extended Care Expenses Home health 100% with calendar year maximum $ 10,000 Skilled nursing facilities 100% with calendar year maximum $ 10,000 Hospice 100% with lifetime maximum $ 20,000 Drug abuse and psychiatric care covered under Extended Care YES Accidental Injury Supplement (Medical - Surgical) $ 0 Drug Abuse and Psychiatric Care Expenses Maximum lifetime benefits Inpatient hospital expenses Outpatient Medical - Surgical expenses Coinsurance Stop -Loss Your employees share in the cost of certain eligible charges with Blue Cross and Blue Shield of Texas up to a coinsurance maximum (not including the deductible, non- covered items or non - eligible expenses). $ 10,000 70% 50% Preventive Care Expenses Routine physicals, immunizations, well -baby care, vision exams, hearing exams (Medical - Surgical deductible waived) Maximum benefits per two -year period per participant $ 0 Other Plan Features Lifetime maximum benefit per participant $1,000,000 0 % $ 4,000 f HEALTH BENEFITS SUMMARY Maximum Coinsurance Stop -Loss Per Family Coinsurance Stop -Loss pickup from prior carrier Employees will be credited with the amount of Coinsurance Stop -Loss reached with your prior carrier. Medical - Surgical deductible pick -up from prior carrier Employees will be credited with the amount of the deductible reached with your prior carrier. Automatic continuation of coverage for newborn infants for the first 31 days following birth. Infants may be enrolled for coverage within the first 31 days after birth with no medical underwriting. A pre- existing exclusion will apply for new employees and dependents. If the patient is seen or treated for a condition by a practitioner during the three -month period immediately prior to the effective date of coverage, the patient must satisfy a 12 -month waiting period for that condition before coverage is available. benefits Dependent children are covered until age 25. Disabled dependent children can be covered beyond age 25. Physician benefits are paid according to reasonable charge profiles as determined by Blue Cross and Blue Shield of Texas. Coverage effective dates are contingent on the employee and dependents being "actively at work" on the date coverage would otherwise have become effective. RATES Alternate Plan III Page 3 $ 12,000 N/A N/A YES YES Dependent children covered for maternity YES YES YES YES Employee Employee Employee Employee Only & Children & Spouse & Family -0 -- $79.68 $162.32 $216.57 DATE: September 25, 1989 SUBJECT: Council Agenda, September 28, 1989 ITEM: IIG. Consider a resolution authorizing the Mayor to enter into a contract with Blue Cross/ Blue Shield. STAFF RESOURCE PERSON: Linda Gunther NARRATIVE /RECOMMENDATION: As of September 30, 1989 the City's current coverage of health insurance with Blue Cross /Blue Shield will end. Staff recommends renewing the contract with Blue Cross /Blue Shield effective October 1, 1989 through September 30, 1989. Blue Cross Health Insurance has proposed that coverage is contingent on the following: The City of Round Rock paying 100% of the employee only cost of the health plan selected which is budgeted. Enrollment being brought to e minimum of 180 or 75% of the eligible payroll, whichever is larger. Total amount budgeted for health coverage: October 1 - September 30, 1990 $100 /month /employee Out of 12 companies contacted only Blue Cross responded. The proposal from Blue Cross would cost the City $97.24 /month /employee. Note: The City currently offers dual choice of coverage with Texas Health Plans and Blue Cross /Blue Shield.