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.