AGENDA ITEM REPORT
TITLE:
title
A RESOLUTION AUTHORIZING THE CITY MANAGER, OR DESIGNEE, TO EXECUTE AGREEMENTS WITH CIGNA HEALTH AND LIFE INSURANCE COMPANY, CIGNA DENTAL HEALTH OF FLORIDA, INC., CIGNA DENTAL HEALTH PLAN OF ARIZONA, INC., AND CIGNA VISION (COLLECTIVELY “THE CIGNA GROUP”) TO PROVIDE MEDICAL (WITH PRESCRIPTION DRUG, LIMITED VISION, AND HEALTH SAVINGS ACCOUNT), DENTAL, AND VISION INSURANCE SERVICES, AND EVERNORTH CARE SOLUTIONS, INC. TO PROVIDE EMPLOYEE ASSISTANCE PROGRAM INSURANCE SERVICES PURSUANT TO RFP NO. 06-05-24-11.
body
BACKGROUND:
Due to the expiration of existing agreements, the City issued a Request for Proposal (RFP) No. 06-05-24-11 to contract for Medical, Dental, Vision, Employee Assistance Program (EAP), Basic Life and Accidental Death and Dismemberment (AD&D), Voluntary Life and AD&D, Short Term Disability (STD), Long Term Disability (LTD), Flexible Spending Account (FSA), Health Savings Account (HSA), Consolidated Omnibus Budget Reconciliation Act (COBRA), and Retiree Billing.
DISCUSSION:
The City issued a competitive solicitation for Medical, Dental, Vision, EAP, Basic Life and AD&D, Voluntary Life and AD&D, STD, LTD, FSA, HSA, COBRA, and Retiree Billing on May 5, 2024. Solicitations were sent to sixty-eight (68) prospective vendors, and six (6) responsive proposals were received from The Cigna Group, Humana, MetLife, National Vision Administrators, The Standard, and Total Administrative Service Corp. Vendors were invited to submit proposals for any or all of the requested services, and no vendor submitted a proposal for all services. The selection committee consisted of Tim McPherson, Human Resources Manager; Laeticia Larrieux, Benefits Program Manager; Daniel Nelson, Community Enhancement Manager; Mindy Lirette, Fire Inspector/Training Specialist; and Daniel Eberly, Police Sergeant. Human Resources Director Pam Kershaw and Risk Manager Sanjeev Bissessar served as advisors to the selection committee, and consulting services were provided by Gehring Group, the City’s Insurance Broker. The proposals were evaluated in accordance with the following criteria: (1) Qualifications and Experience, (2) Resources and Availability, (3) References, and (4) Price. Based on the evaluation, the selection committee recommends awarding Medical, Dental, Vision, and HSA services to The Cigna Group, and EAP services to Evernorth Care Solutions, Inc., a subsidiary of The Cigna Group.
The selection committee has decided to reject the bids for Life and AD&D, STD, LTD, FSA, COBRA Administration, and Retiree Billing in favor of using renewals available on existing contracts. For Life and AD&D, STD, and LTD, the committee determined that, in totality, the existing contracts under one (1) vendor offer richer benefits, a smoother transition for continuation of coverage from short-term to long-term disability, and administrative ease for both the City and its employees. For the Flexible Spending Account, COBRA Administration, and Retiree Billing bids, none of the vendors offered all three (3) administrative services, and did not provide sufficient justification to warrant a switch from the City’s current streamlined contracts with Chard Snyder.
The agreements represent an estimated total cost of $7,074,814.80 in Fiscal Year 25 (FY25), for an initial one (1) year term for Medical and HSA services, and two (2) year term for Dental, Vision Buy-up, and EAP services, beginning October 1, 2024, with the option to renew for additional one (1) year periods, following the respective initial term for each insurance line, for no more than a total of ten (10) years. The renewal of the current contracts for Life and AD&D, STD, and LTD represent an estimated cost of $249,340.69 for FY25, bringing the total estimated cost for insurance benefits to $7,324,155.49.
RECOMMENDATION:
Staff recommends approval of this resolution.
FISCAL IMPACT:
REVENUES: $ 0
EXPENDITURES: $ 7,324,155.49
BUDGETED? Yes
NOTES: The FY25 costs, which may vary by participant count and plan elections, are projected at $6,765,165.84 for Medical (including Prescription Drug, Limited Vision and HSA services) (5.0% increase from FY24), $14,160.00 for EAP (6.8% increase from FY24), and $295,488.96 for Dental and the newly added Vision Buy-up for FY25 (0% increase from FY24). The renewals of Life and AD&D, STD, and LTD are projected at an estimated $249,340.69 (0% increase from FY24). These costs will be included in the FY25 budget, subject to City/Employee cost-sharing that varies by benefit type.