Background:
The City maintains Specific Excess Stop Loss Reinsurance coverage with a current attachment point of $450,000.00. This coverage limits the City’s financial exposure by capping the amount it must pay for each individual large claim in a calendar year to $450,000.00. Once an individual’s claim exceeds the attachment point, the reinsurer reimburses 100% of the costs to the City. In 2019, the City completed a formal solicitation process and awarded the Stop Loss reinsurance contract to the incumbent reinsurer, Voya Financial Company. Since that time, the City has continued to have a positive experience with Voya, noting their timely reimbursement of large claims, reliable advance funding, and favorable renewal terms with individual gapless coverage for ongoing large claims spanning multiple years.
The City, through its Benefits Consultant, Acentria Public Risk, negotiated the final renewal with Voya based on current medical and prescription drug trends, ongoing high-cost claims, and the City’s historical large claim experience. Voya proposed renewal premium of $1,198,345.00, which is a $97,866.00 increase over the current premium of $1,100,479.00, or a 8.9% increase based upon the latest census figures. This increase aligns with current industry medical trends and is below the budgeted forecast by staff.
Pursuant to Section 5-173(c)(8) of the City Code, competitive procurement is not required for Stop Loss reinsurance services when the City is self-funded for medical insurance and uses a third-party administrator that has no financial interest in the Stop Loss reinsurer. City staff and our Benefits Consultant recommend that the City Commission approve the renewal of Stop Loss coverage through Voya at the current $450,000.00 attachment point, for an approximate annual cost of $1,198,345.00, effective January 1, 2026, through December 31, 2026.