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I . - Brown ~rgrwn Brown & Brown of Florida, Inc. Spe"ard I lolland Bldg. Suite <100 8000 Govemor, Square Blvd. Miami La kl's, fL 330 Hi-15!!!! 30'i/:l64.7800' Toll free 800/4.12.88.14 FAX 303/R22.56S7 :l Ii' February 8, 2008 City of Sunny Isles Beach 18070 Collins Avenue Sunny Isles Beach, Florida 33160 Attn: Tom Acquaro Re: Benefit Insurance Program Dear Tom, The City of Sunny Isles Beach Medical and Dental policies are due for renewal on March 1, 2008. As you know, the medical market trend for increases are coming in between 12.5% to 14% annually and dental is 10%. This is based on the rising cost of medical services, dental services, prescription drugs and healthcare administration. Our office has approached the marketplace for both lines of coverage and with diligent effort, have been able to secure renewals below the annual trend on all policies. It is our intention to offer a benefit program, based on the City's direction, that does not reduce benefits nor take away the National Network Capability that some employees utilize as they live outside of the Tri-County area and, most importantly, one that offers as little disruption to employees as possible. It is our general practice to approach multiple carriers in the marketplace to ensure that we are able to offer the best product that suits our client's needs with the most competitive pricing. Health Insurance The initial United Healthcare (UHC) renewal quotation was received on January 9, 2008. At that time based on claims history the manual rates were calling for a 33% increase, but UHC offered a 19% increase. We approached Aetna, AvMed, BCBS, Cigna, Humana and alternates with the UHC company Neighborhood Health Partnership (NHP). All carriers provided proposals with the exception of AvMed who declined due to not being able to provide competitive rates. Competitive data from Humana and Aetna was forwarded to the underwriters at United. United responded with an 11 % increase and additional options with United Healthcare which would allow the group to keep the National Network and potentially reduce the renewal rate to as low as 9.8% with slight plan changes. This was after requesting that the RX be modified under the UHC 7DA plan to mirror the current plan's RX. The rate relief given was also passed onto the associated NHP plans. Two NHP plans were provided offering a reduction below the current rates. Although this plan is not national, it is able to partner with a UHC program and allow the employee to make a voluntary decision to take the NHP plan versus the offered UHC plan. The NHP plan is a local plan (Miami-Dade, Broward, and Palm Beach counties) which has a lower out-of-pocket premium for employees with families as compared to the offered UHC HMO plan. Employees would have the option to select the NHP plan which is still a rich HMO plan and realize a large cost savings for those insuring their families. It allows someone whom might previously have declined coverage for the family due to pricing to now afford it and have the protection. The Humana plans mirror the current United plans in benefits but do not have the same strength in Network. The Humana HMO is a local HMO with coverage only in Dade, Broward and Palm Beach County and also does not include a few Doctors that a large portion of the employees utilize. Although the cost was significantly less than the renewal offered with the same copay levels under United, the employee would stand to lose more in National Network capability, authorization ease for major diagnostic testing amount of physicians available. The Aetna plans were also similar in structure but do not have the same Network capabilities as United and the City has some concerns with past experience of claim and RX issues. Cigna and Blue Cross Blue Shield of Florida both also offered plans with reduced benefits and higher premiums than the current plan. Multiple options were given to the client and two meetings were held with myself and Samantha Alvarez from my office and CSIB employees, Tom Acquaro, Yael Londono and Douglas Haag.