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Title:
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Retiree Healthcare Coverage - Amendment (Ordinance S-50088)
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Title
Retiree Healthcare Coverage - Amendment (Ordinance S-50088)
Description
Request to authorize the City Manager, or his designee, to execute an amendment to Contract 155943 with United Healthcare (UHC) to extend the contract term for three (3) additional years. Split Payment and/or Bulk Payment Administrative Services are provided by United Healthcare for the City's retired employees and their spouses/qualified domestic partners who enroll in coverage under AARP Medicare Supplement Plans.
City Medicare-eligible retirees and their spouses/qualified domestic partners have the option to have their AARP/UHC Medicare supplemental plan coverage and Medicare Part D prescription drug plan coverage monthly insurance premiums deducted from their monthly pension checks with no additional cost to the City's Health Care Trust or General Fund.
Further request authorization for the City Controller to disburse all funds related to this item throughout the life of the contract, as necessary.
Report
Summary
The Human Resources Department recommends a three-year extension of the UHC contract because of several factors, including:
Retirees and their spouses/qualified domestic partners enrolled in individual Medicare supplemental plans would be subject to underwriting with no guarantee of coverage and/or increase in premium;
Underwriting requirements vary from state to state, so enrolled participants may encounter disruption with any changes to their plan; and
Changes to the retirees’ Medicare Part D (drug coverage) may be impacted by formularies, prior authorizations and step therapy requirements, which may be disruptive to the enrolled participants.
Procurement Information
In accordance with Administrative Regulation 3.10, normal competition was waived as a result of a Determination Memo citing Special Circumstances - Without Competition. United Healthcare has been providing administrative services for the City's eligible retirees and their spouses/qualified domestic partners.
Contract Term
Upon approval the contract will be extended through Dec. 31, 2026.
Financial Impact
Retirees pay the full cost of their Medicare supplemental healthcare premiums, and this approach will allow them to pay their monthly premiums via automatic deduction from pension checks. There are no additional costs to the City's Health Care Trust Fund and no General Fund dollars will be used.
Concurrence/Previous Council Action
The City Council previously reviewed this request:
Retiree Healthcare Coverage (Ordinance S-44737) on June 6, 2018.
Department
Responsible Department
This item is submitted by Assistant City Manager Lori Bays and the Human Resources Department.