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September 26, 2019, City Council Regular Meeting
22. Motion to Authorize the City Manager to Renew a Contract with Humana, Inc. for the 2020 Medicare Advantage Plan in the estimated amount of $1,900,000 (Event No. 4553)
Strategic Priority
Good Government

Recommend approval to authorize the City Manager to renew an annual contract with Humana, Inc. for group Medicare Advantage Plan with Part D coverage for the City of Savannah retirees and their spouses who are Medicare primary in the amount of $1,900,000.  Changes in governmental accounting standards require recognizing the cost of post-employment benefits over the working career of an employee.  In order to reduce this liability while maintaining retiree medical benefits, the best solution is a group sponsored fully insured Medicare Advantage Plan.  Based upon 100% enrollment, the estimated annual cost for the approximately 790 covered retirees and spouses equals $1,900,000 of which the City will pay on average 48% of the premium.  This premium is reflective of an increase of approximately 5% from the prior year.  The increase in premium is due to the mandatory inclusion of the Health Insurer Fee related to the Affordable Care Act for the 2020 year as well as a favorable claims experience.

This is a sole source because our current employee benefits consultant, USI Insurance Services, conducted a market assessment and determined that this is the most cost effective plan.

The contract term shall be from September 26, 2019 through December 31, 2020.



Jeff Grant, Director of Human Services
Financial Impact
Expenditure of an Estimated $1,900,000 from the Risk Management Fund
Review Comments
Exhibit 1: Purchasing Summary - Medicare Benefits Humana.pdf
Exhibit 2: Funding Verification - Medicare Benefits Humana.pdf
Agenda Plus