RESOLUTION 90-20204 RESOLUTION NO. 90-20204
RESOLUTION APPROVING THE REDUCTION OF BENEFITS AND 3%
RATE DECREASE OF THE MANAGED CARE (PPO) MEDICAL PLAN WITH
HUMANA HEALTH CARE PLANS EFFECTIVE JANUARY 1, 1991 FOR
THE BALANCE OF FISCAL YEAR 1990/91
WHEREAS, Invitation to Bid No. 127-89/93 , awarded to Humana
Health Care Plans for a one year period on July 26, 1989 , and was
extended for a second one year period on July 25, 1990 ; and
WHEREAS, included was the caveat that a withdrawal by any of
the three participating bargaining units from the City-sponsored
Humana medical plans to a self-insured medical trust would result
in Humana ' s revaluation of the remaining members ' demographic
composition at the time of withdrawal ; Humana would then request
changes in premium rates for the remaining group members for the
balance of the Fiscal Year; and
WHEREAS, on December 5, 1990, the City Commission approved
Resolution No. 90-20187 which authorized the Fraternal Order of
Police to establish a self-insured life and medical benefit trust
for all police officer trainees, police officers, detention
officers, sergeants and lieutenants to be insured by this trust (to
be effective January 1, 1991) ; and
WHEREAS, Humana Health Care Plans has evaluated the
demographic composition of the remaining members, requiring no rate
change for the HMO Plan, but requiring an 8% increase in rates for
the PPO Plan for the balance of the Plan Year; also, in lieu of an
8% increase, benefits for the PPO Plan can be reduced from the
current schedule ("Plan 400") to one of the other schedules (Plan
"660") marketed by Humana, with a 3% rate decrease for the balance
of the Plan Year; and
WHEREAS, City Attorney Opinion No. 90-31 has indicated that
the City of Miami Beach can change the benefit schedule during the
Plan Year as an alternative to a rate increase; and
WHEREAS, the City' s benefit consulting firm, TPF & C, has
indicated that both the 8% rate increase required by Humana and the
alternative reduction in benefits with a 3% rate decrease appear
reasonable; and
WHEREAS, the two remaining bargaining units, American
Federation of State, County and Municipal Employees (AFSCME) and
Miami Beach Employees Benevolent Association (MBEBA) , have held
membership meetings and voted on the options; AFSCME voting to
accept the reduced benefits/ 3% rate decrease option and MBEBA
voting to accept the 8% rate increase option; and
WHEREAS, the Group Insurance Board met December 14 , 1990, and
voted to recommend acceptance of the reduced benefits/ 3% rate
decrease option.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSION OF
THE CITY OF MIAMI BEACH THAT THE CITY COMMISSION HEREBY APPROVES
THE REDUCTION OF BENEFITS AND 3% RATE DECREASE OF THE MANAGED CARE
(PPO) MEDICAL PLAN WITH HUMANA HEALTH CARE PLANS EFFECTIVE JANUARY
1, 1991 FOR THE BALANCE OF FISCAL YEAR 1990/91.
ADOPTED this 19th day of December, 1990.
/ ?2,4(
YOR
ATTEST:
Ejto.A.,12_\Nk' I 1,,t-TC, Approved as to form by the
CITY CLERK City Attorney's Office
BY:��:v�+..�620c-4"---'
DATE: (-2//2/96
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26,__
OFFICE OF THE CITY MANAGER CITY HALL
ROB W.PARKINS 1700 CONVENTION CENTER DRIVE
CITY MANAGER TELEPHONE: 673-7010
COMMISSION MEMORANDUM NO. e:DS'7--fu
DATE: December 19 , 1990
TO: Mayor Alex Das• • and
Members of e City Comm'.sio
i/%I4
FROM: Rob W. Park'•�s (a
City Manager /
SUBJECT:
REQUEST FOR RESOLUTION APPROVING THE REDUCTION OF
BENEFITS AND 3% RATE DECREASE OF THE MANAGED CARE (PPO)
MEDICAL PLAN WITH HUMANA HEALTH CARE PLANS EFFECTIVE
JANUARY 1, 1991 FOR THE BALANCE OF FISCAL YEAR 1990/91
Invitation to Bid No. 127-89/93 , awarded to Humana Health Care
Plans for a one year period on July 26, 1989 , was extended for a
second one year period on July 25, 1990. Included was the caveat
that a withdrawal by any of the three participating bargaining
units from the City-sponsored Humana medical plans to a self-
insured medical trust would result in Humana ' s revaluation of the
remaining members ' demographic composition at the time of
withdrawal . Humana would then request changes in premium rates for
the remaining group members for the balance of the Fiscal Year.
On December 5, 1990, the City Commission approved Resolution No.
90-20187 which authorized the Fraternal Order of Police to
establish a self-insured life and medical benefit trust. All
police officer trainees, police officers, detention officers,
sergeants and lieutenants will be insured by this trust effective
January 1, 1991.
Humana Health Care Plans has evaluated the demographic composition
of the remaining members in the City-sponsored medical plans.
There is no rate change required for the HMO Plan, but the PPO Plan
would require an 8% increase in rates for the balance of the Plan
Year. In lieu of an 8% increase, benefits for the PPO Plan can be
reduced from the current schedule ("Plan 400") to one of the other
schedules (Plan "660") offered by Humana: The hospital benefit
would change from 100% participating/80% non-participating to 90%
participating/70% non-participating, with new per occurrence
deductibles and out-of-pocket maximum for participating hospital
utilization. There would also be a 3% rate decrease for the
balance of the Plan Year.
City Attorney Opinion No. 90-31 has indicated that the City of
Miami Beach can change the benefit schedule during the Plan Year as
an alternative to a rate increase.
The City' s benefit consulting firm, TPF & C, has indicated that
both the 8% rate increase required by Humana and the alternative
reduction in benefits with a 3% rate decrease appear reasonable.
The two remaining bargaining units, American Federation of State,
County and Municipal Employees (AFSCME) and Miami Beach Employees
Benevolent Association (MBEBA) , have held membership meetings and
voted on the options. AFSCME voted to accept the reduced benefits/
3% rate decrease option. MBEBA voted to accept the 8% rate 1
increase option. AGENDA
0
ITEM -
DATE l��
The Group Insurance Board met on December 10, 1990 and again on
December 14 , 1990. The Board voted to recommend acceptance of the
reduced benefits/ 3% rate decrease option.
TOTAL COST CHANGE: BALANCE OF FY 1990/91 (JAN.- SEPT. , 19 91)
$ 2 , 436, 246 Humana PPO Plan Cost at current rates.
$ 2 , 631, 146 Humana PPO Plan Cost with 8% rate
increase and no change in benefit
schedule.
$ 2, 363 , 159 Humana PPO Plan Cost with 3% rate
decrease and reduction in benefit
schedule.
FUNDING:
City contributions are budgeted in the appropriate departments to
provide funding for the anticipated Plan Year costs.
ADMINISTRATION RECOMMENDATION:
That the City Commission approve the resolution approving the
reduction in benefits for the PPO Plan from the current schedule
("Plan 400") to another schedule (Plan "660") with a 3% rate
decrease, in lieu of an 8% increase with no benefit schedule
change, to be effective January 1, 1991 for the balance of the Plan
Year.
ti
ORIGINAL
RESOLUTION NO. 90-20204
Approving the reductionof benefits
eoeiita and
3% rate decrease of themanaged
care (PPO)
medical plan with Humana Health Card Plans
effective January 1, 1191 for the balance
of fiscal year 1390/91.
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