To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Matt Gohl, Assistant Town Manager
Amy Jacob, HR Manager
Title
Resolution Accepting the Offer from Sun Life Assurance Company to the Town of Castle Rock for Stop Loss Insurance Coverage for Calendar Year 2027
Body
________________________________________________________________________________
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 2027. 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 2027 individual stop loss deductible is set at $120,000 per covered individual, the same as in 2026. Any medical claims exceeding that amount are covered by the stop loss insurance. Our 2027 quote for stop loss coverage with Sun Life totals $2,940,549, an amount requiring Town Council approval. This represents coverage for an estimated total maximum cost of $15,456,469 for the Town’s 2026 medical/Rx plan, a 4.5% overall increase from 2026.
Discussion
In 2026, Apta Benefits, who is the benefits consultant for the Town of Castle Rock, conducted a bidding process on behalf of the Town related to the Town’s stop loss coverage. Apta Benefits reviewed historical dollars spent on claims and Symetra, the Town’s incumbent carrier, offered a renewal of 8.5% increase from 2026. Comparing Symetra’s Renewal offer vs. Sun Life’s alternative proposal, Sun Life provided the most competitive quote to earn the Town’s business.
The 2026 contract rate for stop loss coverage with Symetra was $2,841,349. The contract amount for stop loss coverage with Sun Life for 2027 will not exceed $2,940,549, an increase of 3.5%.
Moving forward with stop loss coverage with Sun Life for 2027 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 2027 plan year, which protects the Town and its employees from large catastrophic claims costs.
Budget Impact
The expenditure is budgeted and is funded through the Employee Benefits Fund in an amount not to exceed $2,940,549 for stop loss (reinsurance) coverage for the 2027 benefits plan year.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Sun Life Stop Loss Quote
Exhibit 2: Sun Life Stop Loss Application