6.2 Delta Dental Policy Endorse
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION
DATE
01/23/06
TIME
4:00 P.M.
AGENDA SECTION
NO:
ORIGINATING DEPARTMENT:
APPROVED FOR
AGENDA:
6
CITY MANAGER
ITEM
NO.
2
BY: Deborah K. Demel
BY: 9tIff
ITEM:
Authorize City Manager to sign Policy Endorsement No.4 with Delta Dental of Kansas, Inc. for
dental care benefits.
BACKGROUND:
As part of the City of Salina health insurance benefit, employees electing to participate including
sub-groups are enrolled in a group dental plan with administration provlided by Delta Dental of
Kansas, Inc. Fees paid to Delta Dental of Kansas, Inc. include a monthly administrative fee per
contract. The fee compensates Delta Dental of Kansas, Inc. for administration, reporting, claims
handling and network access.
Following is the monthly administration fee per contract history with Delta Dental of Kansas, Inc.
2005 $3.00
2004 $3.00
2003 $2.75
2002 $2.50
2001 $2.25
Delta Dental of Kansas, Inc. has
upcoming three (3) plan years.
2006 $3.00
2007 $3.00
2008 $3.25
proposed the following administration fee schedule for the
Insurance consultant, Bob Charlesworth with Charlesworth & Associates, LC. was asked to
review the administrative fee structure proposed by Delta Dental of Kansas, Inc. and reported that
the $3.00 is in line with the market for dental administration where fees historically have been as
high as 12% of claims paid. The $3.00 fee is about 6% of claims paid in the City's plan. Mr.
Charlesworth also commented that Delta Dental of Kansas, Inc. passes the provider discounts to
the plan verses some insurance plans that retain discounts, further benefiting the plan.
FISCAL NOTE:
Our current census includes 603 contracts. At this level, annual dental administrative fees would
amount to $21,708 for 2006 and 2007 and would increase to $23,517 in 2008 which is an 8.3%
increase in the third year. Funds for related health insurance plan expenses, including the
administrative services provided by Delta Dental of Kansas, Inc. are budgeted in the Employee
Benefit Fund which is funded by monthly "premiums" shared by employer, employee, and sub-
groups.
RECOMMENDED ACTION:
Authorize City Manager to sign Policy Endorsement No.4 with Delta Dental of Kansas, Inc. for
dental care benefits.