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Admin Committee Minutes 1998 05-14-98 Special Meeting Special Administration Meeting Minutes May 14, 1998 Time Convened: 6:07 p.m. Time adjourned: 6:42 p.m. Attendees: Jim Nanninga Richard Sticky Art Prochaska Bob Johnson Speakers: Denny DeJesu, Gallagher & Associates Denny passed out a presentation packet which contained material about Gallagher & Associates and his outline for his presentation. Gallagher is on the New York Stock Exchange. They specialize in medium to small size groups. They've built their business on the "Yorkville's of the world ". Because of Gallagher's large revenue and many premiums, they have leverage with carriers. They offer a unique 'pool' program for small groups. They 'pool' together to get a better large group rate allowing for them to receive self insured benefits. He explained that it is a sellers market, not a buyers. The choices of carriers are few and they are getting fewer because of consolidating and larger carriers buying smaller ones. He presented a choice of carriers and features of the different plans. Managed care is restricted and they'll have a standard product. BURS has flexible features and Gallagher has leverage with them. Groups can pick PPO or Blue Advantage (PPO -HMO). HMO's are cost effective but are a restricted, controlled environment. if HMO is a problem, PPO could be a good choice. He explained that individually underwritten policies require a proof of health statement. In 1975 the State of Illinois passes legislation giving municipalities the option of banning together for insurance purposes. IPBC (Interpersonal Benefit Commnission) is the largest benefit pool of municipalities in the State. This provides advantages like true group insurance, stable rates, and the freedom to design your own plan. True group insurance just automatically covers you, individually underwritten policies ask for a statement of health and evaluate whether to cover you (or certain Conditions) or not. Gallagher administrates the plan. They have a special arrangement called SWARM. (Their pool.) The same four questions were asked of hire as with the other brokers. He stated that Gallagher has more leverage with the carriers than your typical broker because of the nationwide area they cover, however, they have grown up on the "Yorkville's of this world ". He stated that as the broker they would arrange the best financial situation and initially monitor the service and performance standard of the carrier. They don't pay the claims, but if service became an issue they would step in and get involved. They are located in Itasca at Rt. 53 and Thorndale. He didn't feel that it should matter where he was located because of the technology of this era. He stated that all they do is benefit services and the whole team services the groups they broker. A traditional plan would be handled by Fenny and Vicki. A SWARM plan would be handled by Jim R.alay and Tina. They would set up an initial employee benefit meeting to explain what the plan is, how it works and who to call with questions. Because they don't pay 3 the claims, first the employee should call the claim department, If not resolved, the employee representative in administration should call the claim department supervisor. If still not resolved, then the broker would get involved through their contact at the carrier. They know they route to take to get the job done. Jim asked if they shopped around for the groups at the end of the fiscal year for rates`? Yes, they shop around and negotiate. Denny stated he knows the margins. Rich asked why Kendall County wasn't in SWARM and why we wouldn't want it? Some people don't like the three year commitment requirement to SWARM. Groups that are young and healthy may not need to utilize it, even though rates are stable. Denny left and discussion was held. Each attendee agreed that one main goal was to have a broker who would achuinistrate and handle the carrier. They didn't feel that Gallagher would do that with their flaw of follow up given. The meeting was adjourned. The next meeting is May 20, 1998 at 3:30 p.m. to decide on a recomnendation to bring before the City Council. Minutes prepared by Holly Baker. I I I I