R-05-11-22-9C2 - 11/22/2005RESOLUTION NO. R -05-11-22-9C2
WHEREAS, the City of Round Rock has duly advertised for proposals
for stop loss insurance, and
WHEREAS, Aetna Life Insurance Company has submitted the proposal
determined to be the most advantageous to the City considering the
price and other evaluation factors included in the request for
proposals, and
WHEREAS, the City Council wishes to accept the proposal of Aetna
Life Insurance Company, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the proposal of Aetna Life Insurance Company for stop loss
insurance is hereby accepted as the proposal determined to be the most
advantageous to the City considering the price and other evaluation
factors included in the request for proposals.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
RESOLVED this 22nd day of November, 2005.
NY _ ,�rr�'WELL, Mayor
City of Round Rock, Texas
CHRISTINE R. MARTINEZ, City Secr4 ary
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Aetna Life Insurance Company
Application for Stop Loss Insurance
Application is hereby made to Aetna Life Insurance Company, of Hartford, Connecticut (herein
called Aetna) for a policy of Stop Loss Insurance, to be issued to the undersigned applicant.
City of Round Rock, Texas
Applicant
221 E. Main Street Round Rock, Texas 78664
Address
The form of the policy hereby applied for is that which has been prepared and designated by
Aetna as Form No. GR -88435 [TM.
Said Policy has been approved, and its terms are hereby accepted by the applicant. t -
Signed at
'Applicant
City of Round Rock, Texas
Date
11-1,x-05
Witness
Agent(s) of Record
City Secretary
(If countersignature laws require commission sharing with a duly Licensed Resident Agent in
another jurisdiction, the above designation will be modified to the extent required by law.)
GR -88435 -APP
TX
Ed. 9/98
NB520 rev: 12-18-98
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Otiry
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Aetna Life Insurance Company
151 Farmington Avenue
Hartford, Connecticut 06156
Section 1. Declarations
Stop Loss Insurance Policy For
Insured
XXXXXX
XXXXXX
Date of Issue
Effective Date
XXXXXX
*Stop Loss Factor
XXXXXX
Policy Delivered In:
State
*Individual Stop Loss Amount
$ XXXXXX plus XX% of Contractual
Losses in excess of $X XXXX
Policy Number
SL-XXXXXX
*Premium Rate
per Employee per month
Certain Participants have Individual Stop Loss Amounts that are in excess of $XXX XX plus XX% of Contractual Losses in
excess of $XXX XX. These Participants and their Individual_Stop Loss Amounts are listed by name and applicable amount on
Attachment A.
*Individual Internal Limit
$XXXXXX
*Maximum Annual Aggregate Stop Loss Payment Amount
$xx x:XX
*Individual Lifetime Stop Loss Payment Amount
$XXXXXX
*The Premium Rate, the Stop Loss Factor, the Individual Stop Loss Amount {or the Individual Internal Limit}, the Maximum
Annual Aggregate Stop Loss Payment Amount and the Individual Lifetime Stop Loss Payment Amount for each policy year after
the first shall be indicated in a written notice sent to the Insured and shall be effective on the date stated in such notice.
GR -88435
Page 2 - SAMPLE ONLY
Section 2. Insuring Agreement
Aetna will reimburse the Insured for Contractual Losses during a policy year, which are in excess of:
(a) the Aggregate Stop Loss Amount; and
(b) the Individual Stop Loss Amount {the Individual Internal Limit} for any one Participant.
Such payments are hereafter called Stop Loss payments.
In no event will Stop Loss payments in any policy year for Contractual Losses in excess of the Aggregate Stop Loss Amount
exceed the Maximum Annual Aggregate Stop Loss Payment Amount shown in Section 1. Declarations.
In no event will Stop Loss payments for all Contractual Losses with respect to a Participant during his or her lifetime exceed the
Individual Lifetime Stop Loss Payment Amount shown in Section 1. Declarations.
Section 3. Exclusions
If the Insured has valid and collectible insurance, reinsurance or indemnity, or any reimbursement agreements covering a loss also
covered by this policy, the insurance afforded by this policy shall be in excess of and shall not contribute with such other
insurance, reinsurance, or indemnity.
Section 4. Definitions
As used in this policy:
(1)
The Aggregate Stop Loss Amount, for each policy year, is equal to the sum of the products obtained by multiplying the
number of eligible Employees reported to Aetna on the first day of each policy month for the policy year by the Stop Loss
Factor, plus the amount payable for that policy year {by Aetna to the Insured for Contractual Losses in excess of the
Individual Stop Loss Amount} {by the Insured under the Contract for Contractual Losses in excess of the Individual
Internal Limit} shown in Section 1. Declarations.
In no event will the Aggregate Stop Loss Amount for any policy year be less than 100% of the sum of the products of (i) the
number of eligible Employees reported to Aetna on the first day of the first policy month times (ii) the Stop Loss Factor
multiplied by the number of months in the policy year determined by mutual agreement between the Insured and Aetna at
the beginning of the policy year, plus the amount payable for the policy year (by Aetna to the Insured for Contractual
Losses in excess of the Individual Stop Loss Amount} {by the Insured under the Contract for Contractual Losses in excess
of the Individual Internal Limit} shown in Section 1. Declarations.
(2) The Individual Stop Loss Amount, for any policy year with respect to any one Participant is shown in Section 1.
Declarations.
(3) "Contract" means Administrative Services Agreement No. ASA-XXXXXX, an Agreement between the Insured and Aetna.
(4) "Plan" means the plan of Benefits described in the Appendix which is attached to the Contract.
GR -88435 Page 3 - SAMPLE ONLY
(5)
"Benefit" means a payment made pursuant to the Plan. A Benefit is considered to be paid when the payment has been
validly presented to the bank on which it is drawn or when a Benefit payment has been made by electronic funds transfer or
other reasonable transfer method. `Benefit" will include payments made in New York on behalf of Insured to fund indigent
care and graduate medical education when paid directly into the New York state pool. Any payments made on behalf of an
Insured to fiend indigent care and graduate medical education solely as a result of that Insured's decision not to pay directly
into the New York state pool will not be considered a "Benefit."
(6) "Contractual Losses" means the Benefits paid to or on behalf of Participants under the Contract; excluding however:
(a) any Benefits paid on direction of the Insured that Aetna determines are not payable under the Contract in accordance with
Aetna's then current standard claim practices established for insured Group Accident and Health Insurance plans
administered by Aetna;
(b) any Benefits paid under the Contract with respect to an Employee (and his/her dependents) who does not meet the
requirements defined in number (10) below. This exclusion does not apply to a retired employee or a dependent of a
retired employee, an employee or dependent who is entitled to extended Benefits under the Plan or who elects COBRA
coverage following termination of eligibility;
(c) Benefits paid with respect to an employee and his/her dependents who did not enroll in accordance with the terms of the
Plan or in accordance with Aetna's then current standard enrollment practices, until such time as they are enrolled in
accordance with the terms of the Plan or such practices;
(d) Benefits paid for expenses incurred prior to the Effective Date of this policy,
(e) Benefits paid with respect to a Participant following termination of coverage under the Contract with respect to a class of
employees and their dependents that includes the Participant;
(f) Benefits paid for expenses incurred for treatment of an illness or injury for which a Participant is entitled to Benefits
under any Workers' Compensation law, occupational disease law or under any other legislation of similar purpose;
(g) Benefits paid to or on behalf of an employee or dependent who becomes a Participant after the Effective Date of this
policy, for expenses in connection with a preexisting condition during the first 365 days following the Participant's
enrollment date under the Plan. A preexisting condition is an injury or disease for which, during the last 90 days before
his or her most recent enrollment date under the Plan, the Participant received treatment or services or took prescribed
drugs or medicines.
This exclusion will not apply with respect to: any employee or dependent who becomes a Participant after the Effective
Date of this policy, for which Benefits were paid under the Plan in accordance with Aetna's then current standard
underwriting practices established for applying preexisting condition limitations to group accident and health insured
plans in accordance with the Health Insurance Portability and Accountability Act (HIPAA), Public Law No. 104-191; a
dependent child to the extent required by a Qualified Medical Child Support Order as defined by Section 609(a) of the
Employee Retirement Income Security Act of 1974 ("ERISA"); an adopted child to the extent required by Section 609(c)
of ERISA; or the first $4,000 of Benefits paid under the Plan in connection with a preexisting condition.
(h) for an employee who is ill or injured and away from work on the Effective Date of this policy, Benefits paid to or on
behalf of the employee, in connection with a disease or injury which exists at any time while the employee is both ill or
injured and away from work, until the date the employee returns to full-time work for one full day.
for a dependent who is confined at home, in a hospital or elsewhere on the Effective Date of this policy, or who has been
confined in a hospital during the 31 days prior to such date, Benefits paid to, or on behalf of the dependent in connection
with a disease or injury which exists at any time while he or she is so confined, until the dependent has been free from
confinement for a 31 day period. This exclusion will not apply with respect to an adopted child to the extent required by
Section 609(c) of the Employee Retirement Income Security Act of 1974 ("ERISA"), a child for which there is a
Qualified Medical Child Support Order as defined by Section 609(a) of ERISA (for as long as the Order is in force), or to
(i)
GR -88435 Page 4 - SAMPLE ONLY
(7)
a child born on or after the Effective Date of this policy who becomes covered under the Plan within 31 days after he or
she is eligible.
(j) as to the Individual Stop Loss Amount and the Aggregate Stop Loss Amount: Long Term Disability Benefits, Temporary
Disability Benefits, Vision Benefits, Drug Benefits, Dental Benefits, Benefits paid in connection with mental disorders
which includes substance abuse and capitation payments made on behalf of the Plan;
(k) any excess or punitive payments made on behalf of an Insured to fund New York indigent care and graduate medical
education as a result of that Insured's decision not to pay directly into the New York state pool; and
any other Benefits which the Insured and Aetna mutually agree will not be subject to the Stop Loss insurance.
(1)
A "policy month" shall coincide with a calendar month; except that the first policy month shall commence on the Effective
Date of this policy and the last policy month shall end on termination of this policy.
(8) A "policy year" shall coincide with a contract year under the Contract except that the first policy year shall commence on
the Effective Date of this policy and the last policy year shall end on termination of this policy.
"Participant" means an Employee or a retired employee of the Insured, or a dependent of an Employee or retired employee,
covered under the Plan. "Participant" also means an employee or dependent who is entitled to extended Benefits under the
Plan, or who elects COBRA coverage, following termination of eligibility.
(10) "Employee" means an employee of the Insured who Aetna determines is physically able to perform all regular duties of
employment, is regularly working at least 25 hours per week and for whom the Insured is deducting any required U.S. FICA
taxes.
(9)
Section 5. Conditions
Premiums:
The first policy year's monthly premium rate is shown in Section 1. Declarations.
An estimated premium will be calculated which will be payable on a monthly basis or any other basis mutually agreed upon by the
Insured and Aetna. The estimated premium will be based on the Premium Rate shown in Section 1. Declarations and the
estimated number of employees.
Aetna will issue a Stop Loss premium invoice for the payment of estimated premium. The Insured will pay all estimated premium
payments as directed on the invoice, but no later than 31 days after the due date shown on the invoice. Within 120 days following
the end of each policy year, Aetna will prepare and submit to the Insured a fmancial accounting as to the total actual premium for
that policy year. The total actual premium will be the sum of the products, for each month of that policy year, of:
(a) the Premium Rate, times
(b) the number of employees.
Aetna reserves the right to make adjustments in the premium rate or the estimated premium as of the date of: (i) any change in the
number of Participants: (ii) any change in the Plan; or (iii) any other change in factors bearing on the risk assumed. Failure to
adjust the premium rate or the estimated premium during a policy year will not preclude making an adjustment during any
subsequent policy year.
GR -88435
Page 5 - SAMPLE ONLY
If the total actual premium (determined at the financial accounting) is less than the amount of estimated premiums paid, the
difference will be paid to the Insured at the time the accounting is submitted. If the total actual premium exceeds the amount paid,
the difference will be paid to Aetna within 31 days of the date the accounting is furnished to the Insured.
Modification of Policy:
This policy and the application attached hereto constitute the entire contract. Changes in this policy may be made by written
mutual agreement between Aetna and the Insured.
Stop Loss Payments:
Aetna will make payment , not later than 120 days after the end of each policy year to or on behalf of the Insured of the Stop Loss
payment due under the terms of this policy. The amount of any premiums due but unpaid may be deducted from the Stop Loss
payment otherwise payable to the Insured.
Stop Loss Factor:
Aetna reserves the right to make adjustments in the Stop Loss Factor as of: (i) the date of any change in the Plan; or (ii) the date
of any other change in factors bearing on the risk assumed, including but not limited to a change in the census estimate used to
calculate the Stop Loss Factor.
Termination of Policy:
This policy shall terminate immediately upon the occurrence of any of the following:
(a) The date of termination agreed on by mutual consent of the Insured and Aetna.
(b) Termination of the Contract.
Aetna may terminate this Policy if the Insured fails to pay any premium or estimated premium by the date it is due under the
Policy. The date of termination shall not be earlier than 5 days after the date of written notice of such termination.
The Insured or Aetna may also terminate this policy by giving advance written notice of when it will terminate. The date of
termination shall not be earlier than 31 days after the date of the notice unless the Insured fails to pay any premium when due.
Reinstatement
If: (1) any premium payment is not made within the time specified in this policy; and (2) Aetna later accepts such premium
payment; the policy will be reinstated as of the date that premium payment was due.
Reports:
The Insured shall furnish Aetna with all information Aetna determines to be necessary to carry out the provisions of the policy.
Inspection and Audit:
Aetna shall be permitted to inspect the Insured's records pertaining to the Contract at any reasonable time during the effectiveness
of this policy and within three years after termination of this policy, to the extent that they relate to the premium basis or
Contractual Losses under this policy.
Assignment:
Assignment of interest under this policy shall not bind Aetna without its written consent.
GR -88435
Page 6 - SAMPLE ONLY
Individual Stop Loss Amounts:
Name Relationship.
of Participant to Employee
GR -88435
ATTACHMENT A
COMPANY NAME
Employee's Social
Security Number
Page 7 - SAMPLE ONLY
Individual Stop
Loss Amount
DATE: November 17, 2005
SUBJECT: City Council Meeting - November 22, 2005
ITEM: 9.C.2. Consider a resolution accepting the proposal of Aetna Life Insurance
Company for stop Toss insurance.
Department:
Staff Person:
Justification:
Human Resources
Teresa Bledsoe, Human Resources Director
The City's current stop loss coverage will expire on November 30, 3005. Aetna's Stop Loss
Insurance policy will be effective December 1, 2005 through November 30, 2006.
Funding:
Cost: General Fund, Water/Waster Utility Fund
The cost of this insurance is a function of the number of employees and dependent
units covered.
Source of funds: City contribution and employee paid premiums for dependent health care.
Outside Resources: N/A
Background Information:
For the past three years we have utilized AIG for our Stop Loss carrier for medical, Rx, and
dental services. The stop loss reinsurance provides coverage for the City's health benefit plan
claim payments, which exceed limits the City has chosen to self -insure.
This coverage protects the City's self-funded plan from catastrophic financial losses.
Public Comment: N/A