Exhibit 1 - Agenda Information Sheet - Formal Amend 1City of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
ACM: Cassey Ogden
DATE: August 15, 2023
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the approval of a first amendment to a contract between the City of Denton and United
Healthcare Insurance Company, amending the contract approved by the City Council on December 18,
2018, in the not-to-exceed amount of $11,393,000.00; said first amendment to provide additional funding
for premiums through the contract term for stop loss coverage for the Risk Department and City of Denton;
providing for the expenditure of funds therefor; and providing an effective date (RFP 6922 – providing for
an additional first amendment expenditure amount not-to-exceed $2,000,000.00, with the total contract
amount not-to-exceed $13,393,000.00).
STRATEGIC ALIGNMENT
This action supports Key Focus Area: Pursue Organizational Excellence and Collaborative and Respectful
Leadership.
INFORMATION/BACKGROUND
As part of the City’s comprehensive benefits program, the City contracts with United Healthcare for stop
loss (reinsurance) insurance. Stop loss insurance helps to protect the City from catastrophic health claims
by providing a cap on medical care and pharmacy claims that exceed the City’s deductible on either an
individual or aggregate basis. The health plan’s employee enrollment count continues to increase at an
average of 7% per year, making stop loss insurance a critical component to controlling costs to the City.
Individual stop loss (ISL) insurance provides a cap on an individual member basis (employee, retiree,
dependent) at a pre-determined amount; the City’s current individual stop loss deductible is $185,000.
Therefore, after an individual plan member’s medical claims exceed $185,000 in a calendar year, the stop
loss insurance begins reimbursing the City for any expenses over the deductible.
Aggregate stop loss (ASL) provides a cap for the health plan in totality. If the total health care costs for all
members on the plan exceed the expected plan costs (as calculated by the stop loss insurance carrier) by
25%, then the stop loss insurance reimburses the City for those costs, up to a maximum of $1,000,000 in a
calendar year.
United Healthcare Insurance Company has been the stop loss administrator for the City of Denton since
January 1, 2014.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
The City’s contract with United Healthcare Insurance Company expires on December 31, 2023, and a
formal solicitation will be released in Summer 2023; however, the NTE amount was exhausted in June
2023. The additional funding requested by this amendment will help complete the remainder of the contract
and continue the stop loss insurance coverage through December 18, 2023.
PRIOR ACTION/REVIEW (Council, Boards, Commission)
On December 18, 2018, City Council approved a contract with United Healthcare Insurance Company, in
the not-to-exceed amount of $11,393,000 (Ordinance 18-2121).
RECOMMENDATION
Award Amendment No. 1 with United Healthcare Insurance Company, for additional funding for premiums
through the contract term for stop loss coverage for the Risk Department and City of Denton, in a not-to-
exceed amount of $2,000,000, for a total amended contract amount of $13,393,000.
PRINCIPAL PLACE OF BUSINESS
United Healthcare Insurance Company
Hartford, CT
ESTIMATED SCHEDULE OF PROJECT
This contract will expire on December 18, 2023.
FISCAL INFORMATION
The stop loss insurance is funded from the Health Insurance Fund account, 850500.6712. Requisitions will
be entered on an as-needed basis. The total amended amount of this contract is $13,393,000.The City will
only pay for services rendered and is not obligated to pay the full contract amount unless needed.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Original Ordinance and Contract
Exhibit 3: Ordinance and Contract
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Linda Kile, 940-349-8388.
Legal point of contact: Marcella Lunn at 940-349-8333.