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Sanford Health Plan Renewal

Posted 10/28/16 (Fri)

The PERS Board reviewed the Sanford Health Plan Renewal proposal for the PERS health plan as directed by North Dakota Century Code 54-52.1-05 at its August 25, September 8 and September 22 meetings.  The Board's statutory obligations required it to consider the carrier's performance and the reasonableness of the proposed renewal amount.  The PERS Board renewed its contract with Sanford for the 2017-19 biennium after:


  1. Reviewing information from its consultant indicating the proposed renewal amount was reasonable. Specifically, the consultant found:

    "Sanford's quoted renewal rates equate to a 16.7% increase overall which falls between the estimated increases calculated by Deloitte under the separate projection methodologies.  Sanford's proposed rates fall below our estimated premium increase utilizing Sanford claims experience.  Additionally, Sanford's final renewal proposal removes all risk from NDPERS.  Based on the final proposal terms and our analysis, we consider Sanford's renewal rates to be reasonable."

  2. Reviewing a survey of over 7,000 of its membership, and observing the surveys showed sound levels of satisfaction for the transition year to a new health carrier. Survey results found:

    Sanford Topline Results - Member Services Call Ceenter Survey
  3. Considering the results of a claims processing and performance standards review by Deloitte Consulting for the first year of the contract. Review results found:

    Deloitte Performance Standards Table
  4. Noting that as a cost savings measure Sanford offered to assume all risk for losses for the health plan for the 2017-19 biennium while continuing to offer NDPERS the same return of premium provisions if premiums exceed expenses.
  5. Noting that Sanford agreed to increase its reserve requirement by $32 million for 2017-19 biennium.
  6. Noting that Sanford agreed to limit any increase in administrative expenses to growth in CPI if the plan is renewed for the 2019-21 biennium
  7. Noting that Sanford's efforts relating to wellness and prevention met or exceeded Board expectations.
  8. Noting that the review undertaken and factors considered by the Board is consistent with its past practice in considering renewals for the group insurance program.

View the Health Insurance Plan Renewal document.