Insurance Committee 1999-2000 Minutes
March 9, 2000
February 24, 2000
November 11, 1999
Page 2
IMPERIAL VALLEY COLLEGE
INSURANCE COMMITTEE
March 9, 2000
PRESENT:
Carlos Fletes, Chair
Raul Aragon
Carol Hann
Janell Hodgkin
Tom Lopez
Jan Magno
Gail Parish
Rosie Pechtl
Dr. Jon Tyler
ABSENT:
Mary Bell (consultant)
Sue Strain (consultant)
VISITORS: Cynthia Stribling, Keenan
Lisa Parenti, Keenan
Julie Revoir, Keenan
The meeting of the Insurance Committee was called to order by Carlos Fletes at 11:00
a.m. on
Thursday, March 9, 2000 in the Transfer Center meeting room.
Carlos Fletes introduced Cynthia Stribling of Keenan & Associates, which will become
the
broker of record for the District effective April 1, 2000.
Presentation by Keenan & Associates
Cynthia Stribling introduced her associates Lisa Parenti and Julie Revoir, and
presented
information to the committee on the recommendations for the various pieces of the
District’s
health and welfare package and the cost of the claims run out with AH&L.
With the Keenan & Associates proposal, the fixed cost for medical claims
administration will be
reduced by 23.4% and the College will be able to maintain the $70,000 stop loss.
Keenan is able
to obtain stop loss more cheaply because it pools its clients and purchases stop loss
for the entire
pool. Annual savings for medical insurance, based on 333 covered employees, will be
about
$123,000. Keenan & Associates is also proposing funding for expected claims at about
6% less
than AH&L.
Broker compensation will be on a per head basis with Keenan--$9.00 per head for
medical and
$1.00 per head on dental. AH&L based broker compensation on number of claims.
According to Keenan, there is no justification for aggregate stop loss on dental claims.
The
recommended carrier will be Delta Dental. Delta is the largest and most commonly
used plan for
educational institutions in California. Approximately 90%+ of dentists are associated
with Delta.
The cost of claims administration will be 40% less, and funding will be 24% less. The
overall
savings will be 58.7%. Keenan is recommending eliminating the $50 lifetime dental
deductible
because it does not create any savings for the District and it is an administrative
hassle. Keenan
pools its clients for dental coverage, and is able to obtain the lowest rate in the State
of California
from Delta Dental.
Page 3
Keenan is recommending that the College continue with VSP for vision coverage.
There
will be a .24 per head savings because Keenan pools its clients, and is able to obtain a
discount from VSP because of the size of the pool.
The cost of income protection will be reduced from .45% to .37% of payroll.
The
recommended carrier is U.S. Life; benefits will be the same as with Provident. Voluntary
coverage purchased by faculty would remain with Provident because those are
considered
individual policies.
Ms. Stribling informed the committee that Keenan was able to generate significant
savings for the District by shopping each piece of the benefit package to different
carriers. AH&L was given the opportunity to bid on the claims administration
component, but was unable or unwilling to handle only one component of the plan.
Blue Cross of California is the recommended carrier for claims administration.
Prudent Buyer is recommended as the PPO network, it is nationwide and a bigger
system
than CappCare (AH&L was not going to remain with CappCare either).
Advance RX will be the prescription carrier, and will provide the same benefits. Keenan
will look into merging the drug and medical cards into one card.
The recommended carrier for life insurance is Fortis.
Insurance cards may not be ready by April 1. Enrollment information may have to be
input manually, either by going through current enrollment forms or having employees
fill out new forms.
Run Out
Ms. Stribling explained that there is a cost to changing carriers due to the lag in
processing claims. AH&L will charge approximately $24,000 for paying claims during
run out. Due to the contract, the College is also paying for stop loss during run out. At
some point Keenan can take over the rest of outstanding claims, usually after two to
three
months when claims volume deceases substantially. The Alternative would be to take
over the processing of all outstanding claims, but Ms. Stribling recommended waiting
two to three months, and then looking at the run out. There is also a dental run out cost
of $2,269.80 per month.
Carlos Fletes thanked Keenan & Associates for the information and informed the
committee that the Business Office and Human Resources staff would be meeting with
Keenan & Associates to work out the details of the transition. A memo will be sent out
to all staff advising them of the changes, and asking for patience during the change
over.
Page 4
IMPERIAL VALLEY COLLEGE
INSURANCE COMMITTEE
February 24, 2000
(Reconvened on February 28, 2000)
PRESENT:
Carlos Fletes, Chair
Richard Hann (alternate)
Mary Bell (consultant)
Janell Hodgkin
Jan Magno
Gail Parish
Rosie Pechtl
ABSENT:
Raul Aragon
Carol Hann
Tom Lopez
Sue Strain (consultant)
Dr. Jon Tyler
VISITORS: Pete Cobo
Susan Church
Tom Walsh
Scott Bonham, AH&L
Lana Fitzgerald, AH&L
The meeting of the Insurance Committee was called to order by Carlos Fletes at 3:30 p.
m. on
Thursday, February 24, 2000 in the Transfer Center meeting room.
Renewal
Pete Cobo addressed the committee regarding the status of the Insurance Fund and its
performance over the past seven years. He noted that there have been no changes in
premium
since the plan began, the benefits have remained the same even though medical
inflation is
running 12% per year. Last year was a bad claim year and that is reflected in the
renewal
proposal. No alternatives were suggested in the past because his instructions were not
to change
the plan.
Scott Bonham reviewed the AH&L renewal proposal, offered some suggestions for cost
savings,
and provided background on the renewal calculations. He noted that drug costs have
increased
25% per head. Drug costs are going up faster than medical costs (approximately 29%
trend vs.
11-12% for medical inflation). The College did not have any big increases in its dental
claims.
One Health Plan
Scott Bonham informed the committee that switching from CappCare to One Health P.
O. will
give the College a 5% discount at renewal. The providers are very similar, the network
is owned
by AH&L and fully integrated into its claims system. One Health has a website with the
most
up-to-date provider information.
Stop Loss
Scott Bonham informed the committee that the purchase of stop loss insurance is
pooled, the
increased cost of stop loss is a reflection of the market (fewer carriers, pool
experience, cost of
leveraging) rather than the College’s experience. He recommended increasing stop
loss to
$100,000 per year.
AH&L was asked if they shop for outside stop loss underwriting, the
Page 5
answer was no; AH&L is the stop loss underwriter. When asked if they would shop for
and
outside underwriting, the answer was also no.
Other Cost Containment Options
Other cost savings measures were discussed, these included: changing from a PCS
MAC B to
MAC A contract (generic drugs dispensed if available), increase cost of mail order
pharmacy
from $1.00 to $5.00, increase drug co-pay from $6/$4 to $10/$5, change deductible to
$250,
apply deductible to P.O. and non-PPO, put $1,000 cap on chiropractic care, change to
a Point-of-
service plan with “gatekeeper” physicians. Scott Bonham and Pete Cobo emphasized
that
options can be customized to the College’s needs, and there is a lot of flexibility.
Medicare
The committee asked for a written statement from AH&L regarding the Medicare being
considered the primary insurance for retirees over age 65.
Meeting adjourned at 5:45 p.m.
The Insurance Committee reconvened on Monday, February 28, 2000 at 3:30 p.m. in
the
Board Room with the following members present: Carlos Fletes, Raul Aragon, Mary
Bell, Carol
Hann, Janell Hodgkin, Gail Parish, Rosie Pechtl, and Dr. Jon Tyler. Sue Strain and
Tom Lopez
were absent.
M/S/C Magno/Tyler to retain Keenan & Associates as broker of record for the District,
effective
April 1, 2000.
The committee recommended retaining AH&L on a month-to-month basis until the
College can
switch to another insurance carrier, and to increase the stop loss from $70,000 to
$100,000 as a
cost savings measure.
Page 6
IMPERIAL VALLEY COLLEGE
INSURANCE COMMITTEE
November 11, 1999
(Reconvened on November 15, 1999)
PRESENT:
Carlos Fletes, Chair
Raul Aragon
Olga Artechi (alternate)
Mary Bell (consultant)
Janell Hodgkin
Jan Magno
Gail Parish
Rosie Pechtl
Dr. Jon Tyler
ABSENT:
Carol Hann
Tom Lopez
Sue Strain (consultant)
VISITORS:
Dr. Gilbert Dominguez
PRESENTERS:
Keenan & Associates: Steve Gedestad, Cynthia Stribling, Lisa Parenti, and Eloy Oakley
Wilcox Life & Health Insurance Agency: Gene Wilcox
Peter H. Cobo Insurance Agency: Pete Cobo and Susan Church
The meeting of the Insurance Committee was called to order by Carlos Fletes at 1:00 p.
m. on Thursday, November
11, 1999 in the Board Room.
Approval of Minutes
M/S/C Parish/Pechtl to approve the minutes of the October 6, 1999 meeting.
Presentations by Insurance Brokers
The committee heard presentations from Keenan & Associates, Gene Wilcox and Pete
Cobo regarding providing
insurance broker services to the College.
Keenan & Associates: Cynthia Stribling and Steve Gedestad informed the committee
that Keenan & Associates has
25 years of experience in insurance consulting and brokerage, specializing in schools.
They represent 700 schools
and community colleges in California. Keenan & Associates provides monthly
monitoring and reporting on claims,
has a technical department of underwriters and analysts, has a service department to
resolve claim and billing
problems, provides free training and workshops for college staff and provides
information to clients on legislative
compliance. The renewal process is usually started six months in advance.
A copy of a “Broker’s Report Card” was distributed to the committee. References for
Keenan & Associates include
Southwestern Community College District, Calexico Unified School District, and Brawley
Elementary School
District. Calexico Unified has been a client for over 20 years for health benefits and
Brawley Elementary has been a
client for 15 years. The company is headquartered in Torrance, California, but the San
Diego office would handle
the IVC account. Representatives from Keenan are in the Imperial Valley at least once
a week.
Keenan’s
commission would be paid by the insurance carrier.
Wilcox Life and Health Insurance Agency: Gene Wilcox made a presentation on his
insurance agency which is
based in Holtville. He has a staff of two. Claims service is the biggest function of his
office. He handles a lot of
business with Principal Financial Group which is the carrier for the IID, County of
Imperial, and City of Brawley,
although he is not the agent for those organizations. He does not have any school
districts as clients or self-funded
groups. He usually provides renewal information 60 days in advance. References
include: Keithly Williams Seed,
Brooks Anderholt, and Vic’s Air Conditioning.
Peter H. Cobo Insurance Agency: Pete Cobo and Susan Church made a presentation
on their agency, which is the
College’s present broker. There is a staff of four, with six retired agents who assist on
a part-time basis. As a
broker, the Cobo Agency does not represent any particular company, but looks for the
best coverage for the client.
Mr. Cobo stated that medical costs are increasing rapidly, and even HMO costs are
increasing at double digit rates.
The College’s contribution to the insurance fund must be increased or benefits must
be adjusted in order to keep
Page 7
pace with increasing medical costs. Susan Church made a presentation on the agency’
s service department. She is a
licensed life and disability agent with 15 years of experience. She agreed with the
committee that the recent move
of the AH&L claims office to Torrance from Duluth, Georgia has caused some
problems but the claims adjusters are
being reeducated and problems are being addressed.
In response to questions from the committee, Mr. Cobo stated that he would be glad to
get quotes from other carriers
if so instructed by the committee. Jan Magno asked for advice on what can be pared
down to make the plan more
cost effective; Mr. Cobo stated that the plan has room for changes, and that he can do
an analysis and report back to
the committee.
Meeting adjourned at 2:50 p.m. due to time constraints.
The Insurance Committee reconvened on Monday, November 15, 1999 at 2:00 p.m. in
the Board Room with the
following members present: Carlos Fletes (chair), Jan Magno, Rosie Pechtl, Dr. Jon
Tyler, Mary Bell (consultant),
Olga Artechi (alternate), Gail Parish, and Raul Aragon. Carol Hann, Tom Lopez, and
Janell Hodgkin were absent.
Recommendation Regarding Insurance Broker
After further discussion on November 15, 1999 and later via telephone consultation
with the committee, it was the
final recommendation of the committee that Keenan & Associates be given
“authorization to obtain quotes.” In the
event that Keenan & Associates is able to obtain a more favorable insurance package,
then Keenan & Associates
would be recognized at that time as the broker for the District for medical benefits.
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