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Admin Committee Minutes 1998 05-06-98 Special Meeting Special Adir�inistration Meeting Minutes May 7, 1998 Time convened. 3 :33 p.m. Time adjourned: 6:17 p.m. Attendees: Kathy Jones Jerry Lynch Richard Sticka Jeff Spang Jim Nanninga Speakers: Mike Englehardt, R.L. Hayes & Associates Jack Magnuson, Zeiter- Dickson Insurance Butch Konicek, Caywood & Associates Mike Englehardt started off the presentations by stating the attributes he'd look for in a broker. Customer service, meaning a buffer between the insurance carrier and the group. The broker steps in and handles the problems and develops a relationship with the employees in the group. Professional dedication, must be in this business for the long haul He stated he's been in this business since being out of college, 5 year ago and is 28 years old. He and his wife are expecting their first baby in June. Market access, any broker should be able to get to any carrier but the broker needs to have a good relationship with the carrier so they can work together to handle any situation that may come up. With a group of our size there will only be a handful of carriers to consider and the relationship needs to be a good one. Why R.L. Hayes? He stated they research a group to determine which insurance carrier to go with because different carriers offer different things. He needs to know, where we've been, where we want to go, what we want in a group health plan, what our problems have been and what are our goals. He came up with a recommendation based on the research he has already done He understands we have had p with cu sto mer service b ecause we have been dealing with the insurance carri directly and the doctors and with a situation like that, he stated, there is room for more problems to happen He stated he would be there for the enrollment when employees or the carrier has problems he will handle them. Why Mike? He stated he grew up in Yorkville and his roots are here. He stated he has a vested interest here, his parents still live here. He stated some of the insurance market he has access to But only a handful of companies can provide the coverage we have been used to Nylcare has been sold to Aetna and Aetna is still having problems from buying the last company they bought. He stated there will be more mergers because they are losing money provide the coverage we have been used to. Nylcare has been sold to Aetna and Aetna is still having problems from buying the last company they bought. He stated there will be more mergers because they are losing money on the Point of Service type plans. He went over how to choose a company and plan. Stability is probably the most important point. Their claim processing, administration, customer service (entry level or years of service before getting to this level), this all leads back to the broker. He handles this everyday and has established relationships with the companies and has different avenues to travel to get something done. He researched and searched the market place and came up with BC/BS of Illinois. He stated he's worked with them for a long time and has a good relationship with them. He calls one person and that person handles it. Very stable, reliable company that will be around for a long time. Also, has a large network of providers including the Hatcher Medical Associates. 90 %v of all doctors in Illinois are in their network. They have plan flexibility. HMO, PPO and he reconunended the higher option HMO with a substantial savings, which will give us a wild card for the future, so we can offset our rate renewal by S or 6 %. He stated BC/BS just came up with HMO /PPO flexibility, He has a two -year rate guarantee available only for a limited time period. The beginning rate is a little higher than a one year rate but there would be no increase for two years. He showed us a benefit comparison between our current plan and a BC/BS HMO and PPO plan. 0 deductible, 100 %v co- insurance. it is a little bit higher co -pay when you see the doctor, no admission deductible for hospital, emergency room co -pay is a little bit lower, no out- patient co -pay and no co -pay for chemical rehab or mental health. Out of pocket limit is there, but no co -pay limit. With BC/BS you have to choose between an HMO or a PPO. With an HMO the only out of pocket expense will be an emergency room visit or a physician office call. Employees can choose. Out of network is a more costly co -pay than in network for the PPO. Deductibles and co- insurance apply to out of network. PPO is the most flexible, it doesn't require a primary care physician, you can call anyone in the book. Point of Service plans are next. A primary physician is required but the employee can choose to go to anyone in or out of network. HMO requires a primary care physician and no out of network payouts. He stated he didn't go in depth on out of network benefits because of the wide network base BC /BS provides, most physicians are in the network. Clarification was given to the current plans out of network comparison to BC/BS in network and out of network. Our current plan and the "in network" PPO plans are very similar. He explained that claims drive the renewal. if the payout on claims is higher than the premium then your premium goes up. He answered our standard four questions and explained that there are 4 departments, 4 producers, 10 total in their agency and usually 4 -5 people in the agency each day. Availability is not a problem. He gave some more verification on BC/BS of Illinois. Goals were 'stated: Cast control for long -term, and not taking away any of the current benefits. Availability of doctors, groups of doctors, and customer service. He stated, "We need someone who will stick around and help us, not just someone who will sell us now and tell us what we want to hear but not see it through." Jack Magnuson was next from Zeiter- Dickson Insurance. His interview started at 4:27 p.m. He started by explaining that he felt we need a broker who can access the market, service us constantly and well, and can narrow the market for our needs. He explained that Zeiter- Dickson is our Property Casualty broker and that service will carry through to our group health. He sunwaarized our needs: local providers, a good hospital (snore specialized than local, too), and a comparable price. There are variations on price but he felt Managed Care would be our best bet. He did not recommend a certain plan at this three. He wants to research our history and priorities and then search out the market and find what we want. BC /BS would be one of the final candidates. They are comprehensive and competitive. Wellmark may be another. (They are BC /BS of Iowa.) He answered our standard four questions. He felt that a broker should be the main conduit between the group and the carrier. When problems arise it is the responsibility of the broker's to handle them. He felt that he and his agency's past record should speak for itself, since they have been handling some of our insurance for quite a while. Follow -up will be "Johnny on the spot" and there are always people in the office if he is not. He said that he would maintain an open line of cotninunication with Kim (our employee representative) and deal with the carrier or handle our needs whatever way we were comfortable with. It does depend on the carrier and their procedure. Jack is a 1/3 partner in Zeiter- Dickson and has been there since October of 1989. His main thrust is Property Casualty, but does do group medical, individual medical and life underwriting. Z,eiter- Dickson will be celebrating their 25th anniversary next year but bought out Hartford's business and they are almost 100 years old. He felt it should be pyratnidial, major medical, catastrophic and then other benefits. He felt he would have better access to local providers than out of town agencies could provide. The next interview was that of Butch K.onicek from Caywood & Associates. He gave us a background. on Cay, wood & Associates. They will be 100 years old with 25 years as Caywood. He has been in group health insurance for 9 years and is an employee benefit specialist and has a strong customer base. He felt the broker and agency should be the ones called for a problem not some 1 -844 number. That would only be used for pre - certification. He would be there to hand out a business card to each employee. Butch grew up in Yorkville and looked at the diversity of our group two years ago. He felt that there would only be a few companies to look at for the type of coverage we want, considering the size of our group. If we want local providers we would be limiting ourselves. Hu stated he felt he would be the best choice as our broker because he knows the people and understands our needs. He would be our partner not just our broker. He would bring; the best companies to the table and show us why. He felt his relationship should be as liaison between the group and the carrier. He would set up one on one employee to broker meetings to service and implement any changes that may occur. Butch felt his availability was within 1 -2 hours but also mentioned that the agents at the office Could answer questions for us too. If there is a problem, it never leaves his desk until it is rectified. He keeps a diary to himself on the progress. He will keep a lute of corrununication with our contact. In reply to a question, he explained the compensation scale of a broker, stressing that longevity is the goal here not high rates. Butch stated he would bring two or three companies to us and point out the differences and let us chose. Client retention is what they strive fur. He felt we should only look at about half of a dozen companies for our size and type of group. He spoke of BOBS and Fortis. He has a close relationship with both. There is Central Benefits, too, but, BC /BS and Fortis are better. BOBS can network with other states for out of network providers. With pre - existing conditions any carrier will still insure us, just at what price. The candidates left and discussion was held. The 2 year rate plan with BC /BS was clarified. Premium would be slightly higher than a 1 year rate but it would be guaranteed for two years. Jeff was concerned about how we could know that a broker was giving us a good rate on a Certain plan. They felt that group health insurance was not Jack's main job and that was a concern. You must go through other agents with theirs. Relieving our administration staff of insurance handling was another concern voiced. Discussion then turned to whether we should interview the fourth candidate. Everyone agreed he should be interviewed but sooner than scheduled currently. The decision was made to ask Win to come in on May 14, 1998, at 6:00 p.m, and them they would meet again on May 20, 1998, at 3:30 p.m. to decide on their recommendation for the City Council. They stated they are deciding on a broker to service us not a specific; plan at this point. The meeting was adjourned. Minutes prepared by Holly Baker.