00-0532R

RESOLUTION TO AMEND AGREEMENT NO. 18597 WITH INSURTEC TO PROVIDE HEALTH CLAIMS PROCESSING SERVICES, AT NO ADDITIONAL COST TO THE CITY.

BY COUNCILOR EDWARDS:

RESOLVED, that the proper city officers are hereby authorized to execute an amendment to the agreement with InsurTec, which agreement is Agreement No. 18597, and which agreement provides the city with health claims processing services, which amendment is on file in the office of the city clerk as Public Document No. ________________. There will be no additional cost to the city under the amendment to the agreement. Expenditures for this agreement to be paid from the group health fund.


STATEMENT OF PURPOSE: This resolution approves an amendment to an agreement with InsurTec, which agreement was originally approved by the city council on January 10, 2000. InsurTec is a subsidiary of Epic Insurance Company, which previously administered the city's group health insurance plans.

Beginning January 1, 2000, the city changed its group health insurance plan administrator from Epic to Blue Cross/Blue Shield.

The agreement with InsurTec was necessary because there was a need to determine who would administer the claims which arose during the period of Epic's plan administration, but are being paid during the period of Blue Cross/Blue Shield's plan administration. These claims are referred to as "run-out" claims.

The agreement which the city council previously approved provides that InsurTec will process the run-out claims during the year 2000 at an estimated cost to the city of $52,575.00.

Following the approval of the agreement with InsurTec by the city council, the administration entered in to negotiations with Epic regarding the run-out claims and was able to work out an arrangement whereby all claims filed before July 1, 2000, would be covered by Epic under its previous administrative services agreement at no cost to the city. Therefore, to date, the city has not been required to pay for the processing of run-out claims as anticipated by the agreement with InsurTec.

However, commencing July 1, 2000, the administration recommends that the original agreement with InsurTec be amended to allow claims to be processed with a proposed administrative fee of $50 per claim. It is estimated that there are claims outstanding which may require the expenditure of $10,000 for administrative services, instead of the $52,575 which was authorized by the agreement.

The agreement and amendment are for the year 2000.