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HomeMy WebLinkAboutFIN 2018-11-20 Item 2A - Agreement - 2019 Broker Services with RL EvansCity 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 2 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 CONTRACT FOR SERVICES Contract Number: This Agreement is entered into by and between the City of Tukwila, Washington, a non -charter optional municipal code city hereinafter referred to as "the City," and R.L. Evans Company, Inc. hereinafter referred to as "the Contractor," whose principal office is located at 3535 Factoria Blvd. SE Suite 120, Bellevue, WA 98006. WHEREAS, the City has determined the need to have certain services performed for its citizens but does not have the manpower or expertise to perform such services; and WHEREAS, the City desires to have the Contractor perform such services pursuant to certain terms and conditions; now, therefore, IN CONSIDERATION OF the mutual benefits and conditions hereinafter contained, the parties hereto agree as follows: 1. Scope and Schedule of Services to be Performed by Contractor. The Contractor shall perform those services described on Exhibit A attached hereto and incorporated herein by this reference as if fully set forth. In performing such services, the Contractor shall at all times comply with all Federal, State, and local statutes, rules and ordinances applicable to the performance of such services and the handling of any funds used in connection therewith. The Contractor shall request and obtain prior written approval from the City if the scope or schedule is to be modified in any way. 2. Compensation and Method of Payment. The City shall pay the Contractor for services rendered according to the rate and method set forth on Exhibit B attached hereto and incorporated herein by this reference. The total amount to be paid shall not exceed $52,750.00 per year at a rate of $4,395.83 per month. 3. Contractor Budget. The Contractor shall apply the funds received under this Agreement within the maximum limits set forth in this Agreement. The Contractor shall request prior approval from the City whenever the Contractor desires to amend its budget in any way. 4. Duration of Agreement. This Agreement shall be in full force and effect for a period commencing January 1, 2019, and ending December 31, 2019, unless sooner terminated under the provisions hereinafter specified. 5. Independent Contractor. Contractor and City agree that Contractor is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither Contractor nor any employee of Contractor shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or contributing to the State Industrial Insurance Program, or otherwise assuming the duties of an employer with respect to the Contractor, or any employee of the Contractor. CA Revised December 2016 Page 1 of 7 3 6. Indemnification. The Contractor shall defend, indemnify and hold the Public Entity, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or in connection with the performance of this Agreement, except for injuries and damages caused by the sole negligence of the Public Entity. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Contractor and the Public Entity, its officers, officials, employees, and volunteers, the Contractor's liability hereunder shall be only to the extent of the Contractor's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Contractor's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. 7. Insurance. The Contractor shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the Contractor, their agents, representatives, employees or subcontractors. Contractor's maintenance of insurance, its scope of coverage and limits as required herein shall not be construed to limit the liability of the Contractor to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. A. Minimum Scope of Insurance. Contractor shall obtain insurance of the types and with the limits described below: 1. Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. Automobile liability insurance shall cover all owned, non -owned, hired and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA 00 01 or a substitute form providing equivalent liability coverage. If necessary, the policy shall be endorsed to provide contractual liability coverage. 2. Commercial General Liability insurance with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate and $2,000,000 products -completed operations aggregate limit. Commercial General Liability insurance shall be as least at broad as ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors, products -completed operations, stop gap liability, personal injury and advertising injury, and liability assumed under an insured contract. The Commercial General Liability insurance shall be endorsed to provide a per project general aggregate limit using ISO form CG 25 03 05 09 or an equivalent endorsement. There shall be no exclusion for liability arising from explosion, collapse or underground property damage. The City shall be named as an additional insured under the Contractor's Commercial General Liability insurance policy with respect to the work performed for the City using ISO Additional Insured endorsement CG 20 10 10 01 and Additional Insured -Completed Operations endorsement CG 20 37 10 01 or substitute endorsements providing at least as broad coverage. 3. Workers' Compensation coverage as required by the Industrial Insurance laws of the State of Washington. B. Other Insurance Provision. The Contractor's Automobile Liability and Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance with respect to the City. Any insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the Contractor's insurance and shall not contribute with it. CA Revised December 2016 Page 2 of 7 4 C. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A: VII. D. Verification of Coverage. Contractor shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Contractor before commencement of the work. Upon request by the City, the Contractor shall furnish certified copies of all required insurance policies, including endorsements, required in this Agreement and evidence of all subcontractors' coverage. E. Subcontractors. The Contractor shall have sole responsibility for determining the insurance coverage and limits required, if any, to be obtained by subcontractors, which determination shall be made in accordance with reasonable and prudent business practices. F. Notice of Cancellation. The Contractor shall provide the City and all Additional Insureds for this work with written notice of any policy cancellation, within two business days of their receipt of such notice. G. Failure to Maintain Insurance. Failure on the part of the Contractor to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days notice to the Contractor to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the Contractor from the City. 8. Record Keeping and Reporting. A. The Contractor shall maintain accounts and records, including personnel, property, financial and programmatic records which sufficiently and properly reflect all direct and indirect costs of any nature expended and services performed in the performance of this Agreement and other such records as may be deemed necessary by the City to ensure the performance of this Agreement. B. These records shall be maintained for a period of seven (7) years after termination hereof unless permission to destroy them is granted by the office of the archivist in accordance with RCW Chapter 40.14 and by the City. 9. Audits and Inspections. The records and documents with respect to all matters covered by this Agreement shall be subject at all times to inspection, review or audit by law during the performance of this Agreement. 10. Termination. This Agreement may at any time be terminated by the City giving to the Contractor thirty (30) days written notice of the City's intention to terminate the same. Failure to provide products on schedule may result in contract termination. If the Contractor's insurance coverage is canceled for any reason, the City shall have the right to terminate this Agreement immediately. 11. Discrimination Prohibited. The Consultant, with regard to the work performed by it under this Agreement, will not discriminate on the grounds of race, religion, creed, color, national origin, age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation, the presence of any disability, or any other protected class status under state or federal law, in the selection and retention of employees or procurement of materials or supplies. 12. Assignment and Subcontract. The Contractor shall not assign or subcontract any portion of the services contemplated by this Agreement without the written consent of the City. "Provided, the City hereby grants consent to the Contractor to assign or subcontract some of the services provided under this Agreement to ALLIANT INSURANCE SERVICES." CA Revised December 2016 Page 3 of 7 5 13. Entire Agreement; Modification. This Agreement, together with attachments or addenda, represents the entire and integrated Agreement between the City and the Contractor and supersedes all prior negotiations, representations, or agreements written or oral. No amendment or modification of this Agreement shall be of any force or effect unless it is in writing and signed by the parties. 14. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. 15. Notices. Notices to the City of Tukwila shall be sent to the following address: City Clerk, City of Tukwila 6200 Southcenter Blvd. Tukwila, Washington 98188 Notices to the Contractor shall be sent to the address provided by the Contractor upon the signature line below. 16. Applicable Law; Venue; Attorney's Fees. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. In the event any suit, arbitration, or other proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. DATED this day of 20_ CITY OF TUKWILA CONTRACTOR Allan Ekberg, Mayor ATTEST/AUTHENTICATED: City Clerk, Christy O'Flaherty APPROVED AS TO FORM: Office of the City Attorney By: Douglas Evans, President, R.L. Evans Co., Inc. Address: 3535 Factoria Blvd., Suite 120 Bellevue, WA 98006 CA Revised December 2016 Page 4 of 7 6 EXHIBIT A. SCOPE OF SERVICES For Active and Retiree Plans The Scope of Services for this contract includes the following coverages or programs: Medical/Rx Individual/Aggregate Stop Loss Dental Third Party Administrative (TPA) Services Vision Group Life & AD&D and Dependent Life Long Term Disability (LTD) HMO (Kaiser Permanente) The following are representative of the basic services the BROKER will provide with respect to the CITY'S benefit plans: 1. Current Plan Review • Review in -force contracts, plans, benefit design • Review funding agreements • Review claims data and plan benefit design • Assist with renewal contract negotiations 2. Bidding the In -Force Lines of Coverage • Prepare bid specifications for underwriters • Research insurance markets on CITY'S (Plan Sponsor's) behalf • Analyze proposals and make recommendations 3. Plan Administration • Evaluate current/prospective TPA's • Assist with billing and eligibility problems • Assist with plan installation • Monitor TPA for compliance with contract terms 4. Benefit Communication • Plan and organize employee meetings • Develop benefit summaries • Assist with preparation of Summary Plan Descriptions 5. Assist the City (Plan Sponsor) to Comply with Federal Laws Impacting Benefit Plans • COBRA compliance • PPACA compliance • TEFRA compliance • HIPAA compliance CA Revised December 2016 Page 5 of 7 7 6. Other Services • Act as an advocate of the participants and CITY in resolving difficult claims and administrative problems • Meet, at least quarterly with Health Care Committee, and as desired, with City representatives to discuss claims experience, administration services, cost containment ideas, benefit design, new programs and other employee benefit plan issues and problems. • Assist in providing detailed annual financial accountings • Review and analyze claims data and make recommendations • Review industry trends and advise the City of Tukwila • Assist the CITY in strategic benefit planning • Other special projects agreed to between the CITY and BROKER CA Revised December 2016 Page 6 of 7 8 EXHIBIT B. METHOD OFPAYMENT ACTIVE (4024) and RETIREE (5024) PLANS The Broker Commission Fee payable to R.L. Evans is $4.305.83 per month. This contract is not to exceed $52.75O.00inoyear. The fee ioreduced bvany standard agent fees orcommissions tho1R.L Evans receives during the year and will provide a full accounting at year-end. CA Revised December 2016 Page 7of7