Title:
Consider and take action on a resolution authorizing a one-year agreement with Optum for medical stop loss reinsurance, including optional Gene Therapy Solutions coverage, for a total estimated annual cost of $1,958,862 (Director of Human Resources)
Background:
Approval of this item will authorize the execution of a one-year contract with Optum for the City’s stop loss reinsurance for the health plan year beginning October 1, 2025. This coverage mitigates the City’s financial liability for large medical claims under the self-funded health plan. The contract is the result of a competitive Request for Proposals (RFP 25-023), conducted with HUB International as the City’s consultant and in coordination with Purchasing and Human Resources.
The evaluation considered ten qualifying proposals. After analysis, the most competitive response was submitted by Optum, which quoted a $150,000 specific deductible and no new lasers at renewal. The quoted rates are:
• Annual Stop Loss Premium (Specific + Aggregate): $1,938,468
• Gene Therapy Solutions Program (GTS-15) Cost @ $4.75 PEPM for 618 employees: $35,226
• Premium Credit from Optum @ $2.00 PEPM: ($14,832)
• Net Additional Cost for GTS-15: $20,394
• Total Annual Premium with GTS-15 Included: $1,958,862
GTS-15 provides reimbursement for 15 high-cost gene therapy drugs and includes a $2.00 per employee per month discount against the stop loss premium. The additional net cost to the City for adding this optional benefit is $20,394 annually, which is expected to mitigate financial risk associated with catastrophic gene therapy claims.
CONTRACT ORIGINATION: Agreement has been reviewed by the City Attorney’s Office.
Attachments:
1. Proposed Resolution
2. RFP 25-023 Final Recommendation Presentation
3. Optum Proposal Summary
4. Gene Therapy Solutions Program Overview
FUNDING
{X} Funds are available from Employee Benefit Fund, Health Insurance expense account 40301650-54650
STRATEGIC PLANNING
{X} NOT APPLICABLE