FIN 2018-11-20 Item 2A - Agreement - 2019 Broker Services with RL Evans

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City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM; Rachel Bianchi, Deputy City Administrator BY: Erika Eddins, Human Resources Analyst CC: Mayor Ekberg DATE: November 14, 2018 SUBJECT: Healthcare Broker Services Contract for R.L. Evans, Broker of Record ISSUE Execute a contract with R.L. Evans in the amount of $52,750 for healthcare brokerage services regarding the active employee and LEOFF 1 retiree health plans in 2019. BACKGROUND The City of Tukwila's self -funded health insurance program was started in 1990. R.L. Evans has been the City's broker since that time, helping the City to understand and manage the costs of both the retiree and active employee health insurance plans. R.L. Evans also assist the City in negotiating competitive prices on Life, Long-term Disability, and Stop -Loss Insurance and providing customer service with complex plan administration and compliance. DISCUSSION The past four contracts with the broker have offered one-year terms with an annual $1,250 increase. The proposal provided for this renewal offers two options, a one-year agreement at $52,750 (an increase of $1,500); or a three-year agreement with a $250 a year discount as follows: annual fee of $52,500 in 2019, $53,750 in 2020, and $55,000 in 2021. The small increase for the one-year term reflects a service change from the broker for taking on a new partnership with a third -party benefit provider. That relationship allows for the broker to pass on potential insurance discounts to the City, as well as increased customer service to us in plan administration and compliance. With the transition occurring in the Human Resources department and time needed to evaluate the service provided by the broker, renewing the contract at the one-year proposal allows for future flexibility. FINANCIAL IMPACT A one-year guarantee for 2019 provides for a $1,500 increase over the 2018 fee for an overall contract expense of $52,750. It is expected that any fees and commissions collected in 2018 will offset against the fees that occur in 2019. The contract expense is within 2019 budgeted amounts. RECOMMENDATION The Committee is being asked to approve a one-year contract with R.L. Evans for Healthcare Broker Services and forward this item to the subsequent December 3, 2018 Regular meeting Consent agenda. ATTACHMENTS R.L. Evans Contract with Exhibits A and B: Scope of Services and Method of Payment 1