Risk committee favors Tokyo Marine for stop-loss renewal, asks board to weigh deductible choice
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Summary
The St. Charles Parish risk management committee heard firm stop-loss renewal quotes from UnitedHealthcare and Tokyo Marine and recommended forwarding the item to the full board, with staff to confirm whether Tokyo Marine will add certain reimbursement riders. The committee must still decide whether to keep the $275,000 specific deductible or move to $375,000.
The Risk Management & Insurance Committee on Tuesday reviewed competitive stop-loss renewal proposals and signaled a preference for Tokyo Marine’s lower premium and lower renewal rate cap while asking administration to verify whether Tokyo Marine will add a ‘‘center of excellence’’ rider that UnitedHealthcare already includes.
Miss Gray, the committee staff lead, said the district’s brokers will post a request for qualifications for student accident insurance and noted that the committee also received firm stop-loss proposals from UnitedHealthcare and Tokyo Marine. ‘‘If this is approved by the board on Wednesday, this will be posted twice in the Herald Guide,’’ she said.
David Babin of USI, the district’s broker, walked members through the market results and deductible options. He said Tokyo Marine’s quote at the district’s current $275,000 specific deductible came in about $44,000 lower in premium than UnitedHealthcare’s revised quote, and Tokyo Marine also proposes a slightly lower rate-cap at renewal (45% versus the district’s current 50%). ‘‘We focus on Tokyo Marine because it was the most competitive and it is an A‑rated carrier,’’ Babin said.
Babin and board members debated the tradeoffs of premium savings versus claims exposure if the board increases the specific deductible to $375,000. Babin gave an example: raising the specific deductible lowers premium by roughly $700,000 in fixed costs under one scenario but could leave the district exposed to a larger claims bill if several large claims occur. ‘‘So you have about $200,000 in expected premium savings if we move to $375,000 and run as expected, but you have more exposure if a few large claimants materialize,’’ Babin said.
Board members questioned whether the Tokyo Marine proposal could incorporate the UnitedHealthcare rider that reduces the stop-loss deductible by 15% when a participant uses an approved center of excellence for transplant care. Tom (introduced earlier to the committee as Tom Turner) said Tokyo Marine’s current quote did not include that rider but that USI could request Tokyo Marine to consider adding it. ‘‘It’s not included in the current quote, but we could request it and see if they respond,’’ Tom said.
Committee members agreed to forward the stop-loss renewal to the full board for a Wednesday agenda with two decisions for the board: carrier recommendation (USI recommended Tokyo Marine) and the specific deductible the board prefers ($275,000 or $375,000). Staff will return to the board with any update on riders and confirm final premium figures prior to the full-board vote.
Next steps: the item will be placed on the board agenda, with staff to report whether Tokyo Marine will accept the center-of-excellence rider and with a recommended deductible for board action.
