TO:                  Mayor William F. Martin, Jr.

                        And

                        Members of the Lowell City Council

FROM:            Bernard F. Lynch, City Manager

DATE:             April 26, 2007

RE:                   Council Motion of 4/17/07 by Councillor Elliott

“Request the City Manager report on the consultant/broker fees for Health Insurance.”

________________________________________________________________________

I have been in contact with Kathy Tierney, Human Relations Manager, regarding the motion mentioned above and she gave the following information. 

Cook & Company Contract:  Services include monitoring and tracking medical claims paid under the City’s health program and to provide professional consulting services to the City relative to budget preparation, contract renewal with BCS, and the continuing review and analysis of existing employee benefit programs and alternatives.  Flat annual fee paid of $35,000, which is paid through the Employer and Employee Health and Welfare Trust Funds at the contribution rate of 75% and 25% respectively.

Blue Cross/Shield Administrative Service Fee:  A monthly administrative fee is charged to the City based on the number of subscriber contracts.  For FY07, a fee of $45.18 per contract per month is charged for Master Medical, HMO Blue and Blue Care Elect Preferred members, and $20.31 for Medex.  Attached is a list of the services provided under this agreement.   During FY07, the City paid BCBS a total of: $213,644.95 for approximately 415 HMO contracts; $1,932,377 for approximately 3677 Master Medical contracts which includes the Medicare Supplements, $23,772.54 for approximately 103 Medex contracts, and $9,985.18 for 21 PPO Contracts.   The administrative charges are paid from the Employer and Employee Health and Welfare Trust Funds at 75% and 25% respectively.

Representatives from BCS and Cook attend the monthly Insurance Advisory Committee meetings to educate members regarding current and projected cost, plan design, current trends in health care locally and nationally, and alternative products.

If you have any further questions regarding this, please let me know.  Thank you.