Resolution No. 70881
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RESOLUTION NO. 7088
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF VERNON APPROVING AND AUTHORIZING THE
EXECUTION OF AMENDMENT NO. 9 TO THE
ADMINISTRATIVE SERVICES AGREEMENT (GUSI-2R04,
GUSI-2R05 AND GUSI-9V57) BY AND BETWEEN THE
CITY OF VERNON AND UNITED OF OMAHA LIFE
INSURANCE COMPANY
WHEREAS, the City Council of the City of Vernon has
agreements with United of Omaha Life Insurance Company ("Omaha") -
for administering the City's employee health care plan; and
WHEREAS, Omaha has submitted Amendment No. 9 to the
Administrative Services Agreement (GUSI-2R04, GUSI-2R05 AND GUSI-
9V57), last amended by Resolution No. 7038 on October 21, 1997,
adding Provision 5.2.4 to establish a Mutually Preferred PPO
Access Fee of $1.00 per employee medical exposure per month,
effective July 1, 1997 through December 31, 1997; and
WHEREAS, the City Administrator has recommended approval
lof said Amendment.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon
hereby finds and determines_ that the recitals contained
1hereinabove are true and correct.
SECTION 2: The City Council of the City of Vernon
hereby approves Amendment No. 9 to Administrative Services (GUSI
2R04, GUSI-2R05 AND GUSI-9V57), effective July 1, 1997 through
December 31, 1997, a copy of which Amendment has been presented to
the City Council concurrently with this resolution, and the City
Council hereby orders said Amendment to be received and filed by
the City Clerk.
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SECTION 3: The City Council of the City of Vernon
hereby authorizes the Mayor and the City Clerk to execute said
Amendment for, and on behalf of, the City of Vernon.
SECTION 4: The City Clerk of the City of Vernon shall.
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 17th day of February, 1998.
LEONIS C. MA BURG, Mayor
ATTE T :
BRUCE V. MALKENHORST, City Clerk
-2-
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�W
281
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of
Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 7088, was duly adopted by the City Council of the
City of Vernon at a regular meeting of the City Council duly held
on Tuesday, February 17, 1998, and thereafter was duly signed by
the Mayor of the City of Vernon.
BRUCE V. MALKENHORST, City Clerk
(SEAL)
-3-
SUPPORTING
DOCUMENTS
9
626,330 5818
14: 58 FAX 626 330 5816, - . DAVID $ RREARLEY pia CITY 'C �
CITY' A r" ORNETS OFFICE
CI'J6 'Y OF VERNON
2440 S . Hacienda Blvd., Suite No 223 Telephone: 626/336-3408
Hacienda Heights, CA 91745-4770 Facsimile: 626/330-581`8
Facsimile Transmittal Cover Sheet
DELIV= TO:, Joan Francone FAX st;
D .EnR TO: Gloria oroaco Fax #:
DATE: February 11, 1999
TIME: 2:58 p.m.
FAoM: David B. 8rearley PAGES.* 7, including this
Eduardo olivo cover sheet
SUB9ECT: Draft Resolution Nos. 7088 and 7089 Omaha Life
=nsurat:ce Company amendments
If you do not receive all of the lease call Jun
or Xary a pages, P Y or
COMMMS t
For your review.
This facsimile transmission may contain CONMENTIAL IIVFORMATION, which also may
be LEGALLY PRIVILEGED and which is intended only for the use of the addressee(s)'
named above. If you are not the intended recipient of this facsimile, or the employee or
agent responsible for delivering it to the intended recipient, you are hereby notified that
any dissemination or copying of this facsimile may be strictly prohibited. If you have
received this facsimile in error, please immediately notify us by telephone and return the
Original facsimile to us at the above address via the postal service. Thank you.
AMENDMENT NO. 9
TO
ADMINISTRATIVE SERVICES AGREEMENT
(GUSI - 2R04, GUSI - 2R05 and GUSI - 9V57)
Effective July 1, 1997, this Amendment No. 9 to the Administrative Services Agreement of September 1, 1989
between City of Vernon (Employer) and United of Omaha Life Insurance Company (the "Company")] is made
a part of such Agreement and is subject to the provisions of the Agreement not in conflict with the provisions
of this Amendment.
City of Vernon and the Company mutually agree that the following provision statement is added as Provision
5.2.4 of the Agreement:
5.2.4 Mutually Preferred PPO Access Fee of $1.00 per employee medical exposure per month.
F AITROVED AS TO FORM
Milk> ;
CITY OF VERNON
I�eonis C. Mal urg, M yor
City,of V-eYnon
UNITED OF OMAHA LIFE
U CE MP NY
By
First Vice President
Title Title
Date � � � � Date ^ 2. 8
AMENDMENT NO. 9
Ittte]
ADMINISTRATIVE SERVICES AGREEMENT
(GUST - 2R04, GUSI - 2R05 and GUSI - 9V57)
Effective July 1, 1997, this Amendment No. 9 to the Administrative Services Agreement of September 1, 1989
between City of Vernon (Employer) and United of Omaha Life Insurance Company (the "Company")] is made
a part of such Agreement and is subject to the provisions of the Agreement not in conflict with the provisions
of this Amendment.
City of Vernon and the Company mutually agree that the following provision statement is added as Provision
5.2.4 of the Agreement:
5.2.4 Mutually Preferred PPO Access Fee of $1.00 per employee medical exposure per month.
AITROM AS TO FORD+!
V $
CdA,
Y;
CITY OF VERNON
LEeon.is C. Malbu g, Mayo
City of Vernon
UNITED OF OMAHA LIFE
CE OM ANY
By
First Vice President
Title Title
Date :q,09 8' Date - ? Iq
Information to be entered when assigning new
agreement# to system.
CATEGORY (circle one only) : L & P, GAS, GENERAL, LICENSE
AGREEMENTS OR
REDEVELOPMENT AGENCY
# 1. Approval date: �Z)1-7r y g # 1 a. Agreement # W 0 ° 7
#2. Title of Agreement:
/lA // O ..ten O merit
0. Effective Date: (if different from approval date)
#4. Expiration Date: (if applicable)
#5. Expiration Dat(-:.NONE
:AgrmntData
no
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AMENDMENT NO. 9
ADMINISTRATIVE SERVICES AGREEMENT
(GUST - 2R04, GUST - 2R05 and GUSI - 9V57)
Effective July 1, 1997, this Amendment No. 9 to the Administrative Services Agreement of September 1, 1989
between City of Vernon (Employer) and United of Omaha Life Insurance Company (the "Company")] is made
a part of such Agreement and is subject to the provisions of the Agreement not in conflict with the provisions
of this Amendment.
City of Vernon and the Company mutually agree that the following provision statement Is added as Provision
5.2.4 of the Agreement:
5.2.4 Mutually Preferred PPO Access Fee of $1.00 per employee medical exposure per month.
F ~IVED AS TO FORM
CITY OF VERNON
By
Leonis C. Malburg, Mayor
City -of -Vernon
UNITED OF OMAHA LIFE
I
MP NY
By
First Vice President
Title Title
Date Date l r Z 7,—� 9
CITY COUNCIL
LEONIS C. MALBURG
Mayor
THOMAS A. YBARRA
Mayor Pro -Tern
Wm. 'BILL" DAVIS
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL McCORMICK
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX: (213) 581-7924
` �F2.(818)330-5818
B. BREARLEY
ity Attorney
KEVIN WILSON
Director of Community Services & Water
FAX: (213) 588-2761
KENNETH J. DeDARIO
Director of Light & Power
FAX: (213) 583-1983
4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (213) 583-8811
February 9, 1998
City Council
City of Vernon
Honorable Members:
DAVE TELFORD
Fire Chief
FAX: (213) 581-1385
LOUIS ROSENKRANTZ
Police Chief
FAX: (213) 581-1178
Effective December 1, 1997, Mutual of Omaha changed its PPO
medical network to Community Care Network (CCN). In doing so,
Mutual added more than 6,500 physicians and 22 hospitals to the
network while also obtaining better discounts from these
providers. As a result, Mutual intended to increase the
preferred provider (PPO) access fee from $1.00 per employee per
month to $1.50 per employee per month.
In, researching the original $1.00 per employee per month fee, it
was learned that the only reference was a letter dated June 29,
1992. The PPO Access Fee information was detailed in the
original proposal sometime in 1989 and was subsequently misplaced
in an office transfer.
This has been reviewed by the City Attorney's office, and it
hereby recommended that we amend the Administrative Services
Agreement, effective July 1, 1997, by including the $1.00 fee
Amendment No. 9.
Very truly yours,
Bruce V. Malkenhorst
City Clerk
BVM/mm
enclosures
is
as
MEMQRANDUM
TO: Bruce V. Malkenhorst, City Administrator
FROM: Joan Francone, Risk Manager
DATE: February 5, 1998
SUBJECT: AMENDMENT NO. 9 TO ADMINISTRATIVE SERVICES AGREEMENT
WITH MUTUAL OF OMAHA INSURANCE COMPANY
As you may recall, effective December 1, 1997 Mutual of Omaha changed its PPO
medical network to Community Care Network (CCN). In doing so, Mutual added
more than 6,500 physicians and 22 hospitals to the network while also obtaining
better discounts from these providers. As a result, Mutual intended to increase the
preferred provider (PPO) access fee from $1.00 per employee per month to $1.50
per employee per month.
In researching the original $1.00 per employee per month fee it was learned that
the only reference was a letter dated June 29, 1992. The PPO Access Fee
information was detailed in the original proposal sometime in 1989 and was
subsequently misplaced in an office transfer.
Rick Morillo, City Attorney's Office, suggested we amend the Administrative
Services Agreement effective July 1, 1997 by including the $1.00 fee as
Amendment No. 9. Amendment No. 10 will include an increase from $1.00 to
$1.50 effective January 1, 1998.
Please contact me if you need further explanation.
JF/ca
Enclosures
c: City Attorney
MUTUdUfOWIld
Companies
December 17, 1997
Joan Francone
Risk Manager
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Re: PPO Access Fee
Dear Joan:
Address all correspondence to
SOUTHERN CALIFORNIA GROUP OFFICE
Suite 1000
500 N. Brand Blvd.
Glendale, CA 91203
Phone (818) 502-6561
Fax (818) 502-6562
CHARLES F. RUSSELL
Regional Manager
3 pages via fax: 213-585-4661 & US Mail
I have had conversations with Peter Cobo about the PPO Access Fee and where this can be found
in prior agreements. This is .not part of our agreements because we do not consider it a service
Mutual of Omaha provides directly to our clients, such as utilization management. We use an
outside contractor to provide the services. We merely collect the fee and forward it to the
vendor.
The PPO Access Fee information was detailed in the original proposal prepared by what was the
Orange County Group Office. Subsequent to the sale and initial service, your plan was
transferred to the Los Angeles Group Office. During the movement the file containing the
original proposal, among other files, was misplaced and has never been recovered. No other
copy of the proposal exists. The PPO Access Fee of $1.00 per covered employee per month has
not changed since plan inception. I have attached a copy of a prior renewal letter referencing the
original and still current fee.
Joan, if there is any other information you require or if you have any questions, please feel free
to call.
Sincerely,
Stephen Salinas
Group Service Representative
License # OB68580
enclosure
cc Peter Cobo, Peter H. Cobo Insurance Agency
MuNdUtOmaNa InsuRance Company ■ MUTUAL OF OMAHA PLAZA ■ OMAHA, NE 68175 ■ 402-342-7600
United of Omaha Life Insurance Company ■ Home Office\%' ual of Omaha Plaza, Omaha, Nebraska 68175 ■ (402) 342-7600 ■ ThoT ,kutt, Chairman of the hoard N John W. Weekly, President
United
!3,Dmaha6@
A Mutual of Omaha Company
June 29, 1992
Address all correspondence to
Mr. Peter Cobo
Peter H. Cobo Insurance Agency, Inc.
P.O. Box 2577
Covina, CA 917722-0577
LOS ANGELES GROUP OFFICE
Suite 1920
10 Universal City Plaza
Universal City, CA 91608
Phone (818) 761-9717
Fax (818) 761-9602
Re: City Of Vernon
Group Policies GLUG-2R02, GUG-2R03, GUSI-2R04,
GUSI-2R05 & EPSI-41-115
Dear Pete:
CHARLES F RIISSELL
Regional Manager
As you know, the anniversary date for the above referenced account is September 1, 1992. This letter
will serve as 60 days advance notice of our renewal conditions.
Although the AD&D rate will remain unchanged, the Life rate calculates a substantial rate increase.
Rather than require the entire increase, the Renewal Underwriting Committee has requested only a 15%
adjustment, bringing the rate to $0.45 per $1,000.
Projected claims for the coming policy year are as follows:
PPO Medical $1,262,400
EPO Medical $415,570
Dental $223,764
The resultant Specific Stop Loss fees at a $50,000 level for the PPO and ExcluisCare plans will increase
45.3% and 21 % respectively. Please note that we are estimating a $250,000 loss under the PPO
Specific Stop Loss policy in the current plan year. Most of this loss results from large claims incurred
by Ms. Mary King for multiple disorders. Ms. King's lifetime accumulated claims with United of Omaha
total $161,406 to date, which does not include her most recent admission. Because of the .catastrophlc
nature of her claims. Ms. King's pooling level will be set at $100,000 rather than $50,000 in the next plan
year.
The Aggregate Stop Loss fee will renew at $1.67 per employee per month. Note that this fee applies
both to PPO and EPO enrolles. This represents a 5% increase from the current fee.
The Aggregate Attachment Point for the next plan year will be the greater of $2,097,462 or $5,054.72
multiplied by PPO exposures and $3,395.18 multiplied by EPO exposures,
A.S.O. fees will also require an adjustment. For the indemnity plans (eg: PPO Medical and Dental) the
new fee will be 10.7% of paid claims. The EPO program fee will increase to $52.03 per employee per
month.
1I
c
Finally, the following fees will apply for the current cost containment program and PPO access.
Cost Containment $1.68/EE/Month
PPO Fee $1.00/EE/Month
Note that theso fees apply only to those employees electing the PPO program.
Pete, should you have any questions regarding any of this information, please do not hesitate to contact
our office. we look forward to a successful renewal, and to continuing our relationship with your office
and the city.
Best regards,
Brett R. Young
Senior Group Service
Representative
BRY:ms
cc: Craig Currier
Terry Nesbitt
Charles F. Russell