The City of Allen became partially self-funded in January 2000. As a result of being partially self-funded the city generates a Request for Proposal every three years with an option to renew for two additional years to ensure we maintain the best cost for services.
The City received three competitive quotes for stop-loss insurance from the following: United Healthcare, American Fidelity, and Berkshire Hathaway. United Healthcare was the lowest bid from all three with an overall increase to stop-loss insurance of 1.7%. American Fidelity and Berkshire Hathaway proposed a 1.9% and 3.9% increase respectively from the current overall cost for stop-loss insurance.
The city's stop-loss insurance policy protects the city from large medical claims. The stop-loss policy provides the City protection by reimbursing the city for catastrophic claims that exceed $125,000.
The stop loss policy does reflect an increase to the aggregate reimbursement from one million to two million in coverage. The aggregate reimbursement maximum protects the city against higher than expected claims costs overall.
The proposed contract has an overall premium reduction of $50,000 for renewal. The overall maximum annual funding is increasing by 1.7% or $207,991.