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EMPLOYEI; BENEFITS <br />BROKERS AND CONSULTANTS <br /> <br />February 9, 2004 <br /> <br />Mr. Don Cummings <br />Director of Personnel <br />Cabarrus County <br />65 Church Street <br />Concord, NC 28026 <br /> <br />Re: 2004 - 2005 Health Insurance Plan Renewal Recommendation <br /> <br />Dear Mr. Cummings: <br /> <br />Enclosed is our recommendation for the 2004 - 2005 Health Insurance plan. To begin <br />with, below is our renewal calculation based on updated claims information for the <br />current contract: <br /> <br /> 7/04-6/05 <br />Current Plan Design Mature <br />Incurred Claims HMO and POS <br />hacurred Claims 10/02 thru 9/03 $2,949,931.89 <br />Trended Claims 14% <br />21 Months of trend- (24~.5%) $3,672,665.20 <br />Needed Premium $4,478,860.00 <br />Current Premium $3,724,790.44 <br />Change 120.24% <br /> <br />Based on the latest claims information, the renewal for the current contract indicates that <br />there should be a 20.24% increase. The CIGNA renewal for the current plan design is <br />23.5%. CIGNA's renewal of 23.5% was based on claims data thru June 30, 2003. <br />However, it basically holds up. <br /> <br />When looking forward, it is important to remember that the total cost for the Cabarms <br />County health plan equal claims incurred by the group, plus administrative costs to nm <br />the plan. <br /> <br />Over the long haul, if the discounts and claims management of the health plan vendor is <br />competitive, then the next most logical opportunity to save money in the plan (outside of <br />plan design changes), is via administrative costs. <br /> <br />211 Greenwich Road P.O. Box1220828 Charlotte, N.C. 28222 <br /> 704.365-4280 * FAX 704,.365-1529 <br /> <br /> <br />