City of Nashua
Human Resources Department
229 Main Street - Nashua, NH 03060
603 589-3230
To: Dan Kooken, Purchasing Manager
From: Larry Budreau, Human Resources Director
Subject: Anthem BlueCross BlueShield Administrative Services Contract Renewal
Harvard Pilgrim HealthCare Administrative Services Contract Renewal
The Hartford - Life Insurance, Supplemental Life, and AD&D Contract Renewal
Date: May 10, 2016
The Human Resources Department seeks Finance Committee approval to renew the City’s Health
and Life insurance contracts, effective July 1, 2016.
Anthem BlueCross Blue Shield
Anthem is one of two health insurance carriers that administer the City’s self-funded health plans.
1900 employees participate in one of the three plan options — Point of Service (POS), Health
Maintenance Organization (HMO), or High Deductible Health Plan with Health Savings Account
(HDHP w/ HSA).
The Anthem contract is for Administrative Services Only. Briefly, unlike a fully insured plan,
Anthem provides access to their provider network, processes health insurance claims, and seeks
2x weekly claims cost reimbursement from the City. The City bears the claims cost risk (which it
mitigates with Stop Loss Insurance), and pays Anthem a monthly fee for each covered employee.
That fee is increasing 2.4%, from $48.25 per month to $49.40 per month. Total annual fees are
estimated to be $1,140,000. The 2.4% increase is contingent upon the City agreeing to a 3-year
contract, from July 2016 through June 2019, during which time Anthem guarantees that 2"" and
3" year fee increases will not exceed 2.5% per year. The 1-year renewal rate increase is 4.8%.
For your information, total plan costs, (fees + claims + stop loss insurance), are estimated to be
$32,500,000. Administrative service fees represent 3.5% of the total plan cost.
Harvard Pilgrim HealthCare
300 employees participate in a self-funded HMO administered by Harvard Pilgrim. Harvard’s
Administrative Services Only fee is increasing 2.9%, from $65.66 to $67.56. Total annual fees are
estimated to be $255,000.
