Explanation
BACKGROUND: To maintain the insurance programs in accordance with the negotiated labor contracts, it is necessary to modify the existing contract with Aetna Life Insurance, and to provide additional appropriation for the continuation of the dental insurance program. Additional appropriation is needed due to higher than projected dental insurance claims during the run-out period with Aetna Life Insurance.
In February 2007, $5 million was appropriated to Aetna Life Insurance and in December 2007, an additional $950,000.000 was appropriated to meet anticipated annual expenses of $5.95 million. However, additional appropriations are needed to fund run-out claims (with a date of service on or before January 31, 2008) with Aetna Life Insurance, estimated to be an additional $650,000. Per the contract with Aetna Life Insurance, the run-out period in which dentists are required to submit claims (with a date of service on or before January 31, 2008), expires January 31, 2009. The additional appropriation and modification does not require additional cash funding. Cash funding is available in the total Employee Benefits Fund from all insurance subfunds.
Contract compliance number: 06-6033492, Expires 3/7/2010
FISCAL IMPACT: No fiscal impact; funding is available to modify a contract with Aetna Life Insurance, to authorize the expenditure of $650,000.00 for Aetna Life Insurance through January 31, 2009, and to provide additional appropriations for dental claims expenses. Funding is available for this modification in the Employee Benefits Fund. This ordinance is an emergency measure to ensure insurance coverage as negotiated by union contracts.
To authorize the City Auditor to appropriate $650,000.00 from within the unappropriated balance of the Employee Benefits Fund; to authorize the Human Resources Director to modify the contract with Aetna Life Insurance to pay runoff claims through January 31, 2009, and to authorize the expenditure of $...
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