AGENDA ITEM REPORT
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A RESOLUTION AUTHORIZING THE CITY MANAGER, OR DESIGNEE, TO EXECUTE AGREEMENTS WITH THE FOLLOWING TWO QUALIFIED FIRMS TO PROVIDE MEDICAL WITH PRESCRIPTION DRUG, DENTAL, VISION, LIFE AND AD&D, SHORT TERM DISABILITY, LONG TERM DISABILITY, AND EMPLOYEE ASSISTANCE PROGRAM INSURANCE SERVICES PURSUANT TO RFP NO. 03-28-18-10: (1) CIGNA FOR MEDICAL WITH PRESCRIPTION DRUG (INCLUDING VISION COVERAGE), DENTAL, AND EMPLOYEE ASSISTANCE, AND (2) LIFE INSURANCE COMPANY OF NORTH AMERICA FOR LIFE AND AD&D, SHORT TERM DISABILITY, AND LONG TERM DISABILITY.
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BACKGROUND:
The City issued a competitive solicitation for Medical with Prescription Drug, Dental, Vision, Life and AD&D, Short Term Disability, Long Term Disability, and Employee Assistance Program Insurance Services on March 4, 2018. Eligible employees, retirees, elected officials, eligible family members, and COBRA participants will be covered by these plans and services.
DISCUSSION:
Solicitations were sent to ninety-six (96) prospective vendors, and ten (10) responsive proposals were received from Aetna, Cigna, Humana, Life Insurance Company of North America, Mutual of Omaha, Ochs, Inc., The Hartford, The Standard, United Healthcare, and Unum Group. The Selection Committee consisted of Pam Kershaw, Human Resources Director; Robin Samotin, Benefits Program Manager; and Daniel Eberly, Police Sergeant, with consulting services provided by Gehring Group. The proposals were evaluated in accordance with the following criteria: (1) Conformity to Requested Benefit Structure, (2) Quality of Services Delivered, (3) Ease of Administration, (4) Qualifications, References, and Past Performance, and (5) Net Cost. Based on the evaluation, the Selection Committee recommends awarding the Medical with Prescription Drug (including Vision coverage), Dental, and Employee Assistance Program contracts to Cigna, and the Life and AD&D, Short Term Disability, and Long Term Disability contracts to Life Insurance Company of North America.
The Agreements represent an estimated cost of $4,575,800 in FY19, for an initial term of five (5) years, beginning October 1, 2018, with the option to renew for five (5) one-year periods.
RECOMMENDATION:
Staff recommends approval of this Resolution.
FISCAL IMPACT:
REVENUES: $ 0
EXPENDITURES: $ 4,575,800
BUDGETED? Yes
NOTES: The FY19 costs, which may vary by participant count and plan elections, are projected at $4,087,990 for Medical with Prescription Drug (including Vision) (4.4% increase over FY18), $181,810 for Dental (3.0% decrease from FY18), $10,220 for Employee Assistance Program (4.1% decrease from FY18), $143,450 for Life and AD&D (33.3% decrease from FY18 for basic benefits and no cost change for voluntary benefits), $85,950 for Short Term Disability (20.7% decrease from FY18), and $66,360 for Long Term Disability (37.0% decrease from FY18). These costs will be included in the FY19 budget, subject to City/Employee cost-sharing that varies by benefit type. The City's total FY19 share, approximately $3,244,600, represents a $62,140 (2.0%) increase over FY18.