To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Sheryl Coffey, Human Resources Manager
Title
Resolution Accepting the Offer from Symetra Life Insurance Company to the Town of Castle Rock for Stop Loss Insurance Coverage for Calendar Year 2025
Body
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Executive Summary
As part of the Town’s total compensation package, Castle Rock provides a health care plan for Town staff. The Town has successfully utilized a self-insured business model to provide health coverage and is continuing this practice for 2025. Being self-insured has many benefits, two of which are having greater flexibility and control over our health plan and having the ability to manage plan dollars when we are having both good claims years and challenging claims experience.
As part of its self-insured plan, the Town purchases “stop loss” coverage, also referred to as “reinsurance,” to protect the organization from large-dollar claims. This provides the Town a guarantee, or “safety net,” from bad years, which happen from time to time.
The Town’s 2025 individual stop loss deductible is set at $120,000 per covered individual. Any medical claims exceeding that amount are covered by the stop loss insurance. Our 2025 quote for stop loss coverage with Symetra totals $1,715,653, an amount requiring Town Council approval. This represents coverage for an expected total maximum cost of $11,404,362 under Symetra for 2025, a 2.1% overall increase from 2024. .
Discussion
In 2024, in collaboration with Novo Benefits, who is the benefits consultant for the Town of Castle Rock, conducted a RFP related to the Town’s historical dollars spent on claims and Symetra came back with a -10.4 decrease in premium which was lower than the other five (5) entities that responded with a 14.5% increase at the highest quote. Symetra provided the most competitive quote to earn the Town’s business.
The 2024 contract rate for stop loss coverage with Symetra was $1,641,564. The contract amount for stop loss coverage with Symetra for 2025 will not exceed $1,815,692.
Conclusion
Moving forward with stop loss coverage with Symetra for 2025 allows the Town to continue to manage its health care plan in a manner that realizes the best overall stop loss renewal rate for the 2025 plan year, which protects the Town and its employees from large catastrophic claims costs.
Budget Impact
The expenditure will come from the Employee Benefit Trust Fund in an amount not to exceed $1,815,692 for stop loss (reinsurance) coverage for the 2025 benefits plan year.
Staff Recommendation
It is recommended that Council authorize staff to enter into an agreement with Symetra Life Insurance Company for its stop loss coverage for the Town’s 2025 self-insured health care plan.
Proposed Motion
“I move to approve a Resolution authorizing Town staff to execute a contract with Symetra Life Insurance Company for stop loss insurance services.”
Attachments
Attachment A: Resolution
Exhibit 1: Proposal for Stop Loss Coverage from Symetra Life Insurance Company