R-21-02 03/25/02RESOLUTION NO.
A RESOLUTION EXTENDING THE PERIOD OF PARTICPATION IN THE
SOUTHWEST AGENCY FOR HEALTH MANAGEMENT FOR A PERIOD
OF THREE ADDITIONAL YEARS
WHEREAS, the Village of Lemont did previously through the passage of Ordinance
No. #736, become a member of the Southwest Agency for Health Management (SWAHM),
which is an intergovernmental entity providing employee benefits to the officers and employees
of this municipality; and
WHEREAS, the Village of Lemont did adopt Resolution #R -22 -99 extending its
participation in SWAHM for an additional three (3) year term.
WHEREAS, through its membership in SWARM, this intergovernmental entity gains
the ability to achieve economics of scale in the administration of the benefit claims of its
requisite Members and the other benefits of membership provided for in the Contract and By-
Laws between SWAHM and Intergovernmental Personnel Benefit Cooperative ( "Cooperative ");
and
WHEREAS, the Contract and By -Laws of SWAHM provide that SWAHM shall
operate in three (3) year cycles with the governing board of each Member being required to pass
an ordinance or resolution agreeing to continue as a Member for the new three -year cycle; and
WHEREAS, failure to pass a timely ordinance or resolution, at least ninety (90) days
before the commencement date of a new three -year cycle shall constitute a withdrawal from
SWAHM; and
WHEREAS, the next three -year cycle of SWARM and the Cooperative commences on
July 1, 2002; and
WHEREAS, this municipality desires to express, through the passage of this
Resolution, its desire to continue as a Member of SWARM for the three -year cycle
commencing on July 1, 2002, provided that an adequate number of other Members of the
SWAHM, as is set forth within the Contract and By -Laws document, also agree to continue as
Members for the next three -year cycle;
NOW, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD
OF TRUSTEES, as follows:
SECTION 1: The Village of Lemont shall continue as a member of the Southwest
Agency for Health Management for a three -year term commencing on July 1, 2002, in
accordance with the Contract and By -Laws of that entity as they currently exist or as they may
be validly amended in the future.
SECTION 2: The obligation of the Village of Lemont to be a Member of the Southwest
Agency for Health Management shall obligate the Village of Lemont to make financial
contributions to the Southwest Agency for Health Management only to the extent required from
time -to -time by the Contract and By -Laws of the SWARM.
SECTION 3: This Resolution shall take effect immediately upon its passage and
approval as provided by law.
2
PASSED AND APPROVED by the President and Board of Trustees of the Village of
Lemont, Counties of Cook, Will, and DuPage, Illinois, this 25TH day of March , 2002.
AYES NAYS PASSED ABSENT
John Benik
Debby Blatzer
Peter Coules
Connie Markiewicz
Steven Rosendahl
Jeanette Virgilio
v
v
1/
1
APPROVED this 25th day of March , 2002.
CHARLENE SMOLLEN, Village Clerk
APPROVED AS TO FORM:
/5/
Villa • orney (/
Date:
3
Gallagher Benefit Services, Inc.
March 13. 2002
Village of Lemont
Mr. Gary Holmes
418 Main Street
Lemont, IL 60439 -3788
Re: IPBC Renewal
Dear Gary,
A Subsidiary of Arthur J. Gallagher & Co.
NPR 6
As you are aware, the SWAHM subpool of the IPBC is approaching the three year renewal cycle
for July 1. 2002. The individual SWAHM members need to have a resolution approved by their
Board before April 1 in order to continue to participate for health insurance. The SWAHM
composite estimated increase for medical coverage is 15% for July 1.
Ir► anticipation of the renewal. Gallagher Benefit Services (GBS) has requested medical insurance
proposals from commercial carriers for SWAHM. GBS requested proposals from BlueCross
BlueShield. UniCare. United HealthCare and Humana. They are the four major insurance carriers
in the Chicago area.
Only UniCare was willing to quote on the SWAHM subpool as a whole. The other carriers are
unwilling to write "association' business on a fully insured basis. The UniCare rates proposed
were higher than the IPBC rates with the 15% renewal increase and did not match the current
PPO plan design. In addition. the UniCare quote assumes that only approximately 10 months of
claims experience xy it I be paid in the first ye - .r of the plan. This is to the fact that at claims
incurred but not paid in the current plan year will be paid on a self insured basis by SWAHM.
This also means that the first year renewal will include a trend increase. experience increase and
increase to go from an immature claim year to a mature claim year. Also to consider is the fact
that the HMO and PPO networks for UniCare is significantly smaller than the current BCBS
HMO Illinois network or the PHCS PPO network. This could cause disruption to employees that
need to change providers. The UniCare proposal does not appear to be an attractive option.
The IPBC SWAHM medical plans are self funded within the cooperative. If a member
terminates the IPBC plan and moves to a fully insured coverage. there are several issues that
need to be addressed and analyzed. A summary of the major financial issues include:
The Gallagher Centre
Two Pierce Place
Itasca, IL 60143 -3141
630.773.3800
Fax 630.285.3685
www.ajg.com
SWAHM
Plan Parameters
Total
Plan Parameters
RATE COMPARISON OF RENEWAL
MEDICAL,, No. of
EEs
HMO
Single
Family
Medicare Single
Medicare Family
PPO
Single
Family
Medicare Single
Medicare Family
Total
54
101
0
0
155
66
173
0
0
239
Current
BCIBS
510 - RX$5/10/25
HMO Illinois
$203 85
$605.08
$173.28
$346.53
572,120.98
90%170%
itt 5250/500
$1K12K
out 5375/150
$3K /9K
rx$5/10/25
$256.23
$697.45
50.00
$000
5137,570.03
COMBINED MONTHLY PREMIUM 394 5209,691.01
ESTIMATED ANNUAL PREMIUM $2,516,292.12
RATE COMPARISON OF OPTIONS
MEDICAL No. of Option 1
HMO
Plan Parameters
Unicare vs. % of
EEs Estimated Renewal Change
Single 54
Single + Spouse 0
Single + Child(ren) 0
Family 101
Total j 155
PPO
Plan Parameters Note:
Does not match existing PPO Plan.
Single 66
Single + Spouse 0
Single + Child(ren) 0
Family 173
Total 239
Combined Monthly Premium - Medical 394
$10 - rx$5/10/25
$231.70 -1%
$0.00 0%
$0 00 0%
$687.76 -1%
$81,975.56 -1%
90%/70%
M-
5250/750(515)
$1K/3K
out -
$500/1500
$3K /9K
rx$5110125
$296 42 1%
$0.00 0%
$0.00 0%
$790.29 -1 %
$156,283.89 -1%
$238,259.45 -1%
Renewal
BC /BS
$10 - RX$5110125
HMO Illinois
$234.43
$695.84
$199.27
$398.51
$82,939.13
90 %170%
In $250/500
$1K /2K
out $375/750
$3K /9K
rx$5/10/25
$294.66
$802.07
$0.00
$0.00
$158,205.53
$241,144.66
52,893,735.94
of
Change
15%
15%
15%
15%
15%
15%
15%
0%
0%
15%
15%
15%
ESTIMATED ANNUAL PREMIUM $2,859,113.40 -1%
ESTIMATED CLAIMS RUN OUT COSTS' $302,130.08
TOTAL ESTIMATED ANNUAL COSTS 1, $3,161,243.48 9% I ! I
The Option rates are subject to fluidization based on review of your group medical disclosure of medical conditions submitted to Underwriting upon submission of the case.
"The estimated terminal liability shown above are for illustrative purposes only. These are based on vour past claims history and what administrative fees might be from BCBS.