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HomeMy WebLinkAboutCOW 2019-07-08 Item 3A - Contract - Health Care Broker with USI Insurance for $270,000COUNCILAGENDA SYNOPSIS Initials Meet* Date Prepared by Ma ori- review Council review 07/08/19 JP LI\ 07/15/19 JP ITEM INFORMATION ITEM No. 3.A. STAFF SPONSOR: JUAN PADILLA ORIGINAL AGIADA DATU: 07/08/19 AG1 ;ND\ Imm TITLF Healthcare Broker Services 07/08/19 Z Motion Alt,gDate 7/15/19 fl Resolution Mt,gDate 0 Ordinance Alt,gDate fl Bid Award Mg Date Public Hearing Mg Date [1] Other illtgDate C,vri,(;()RY Discussion AltgDate SPONSOR Council Mayor FIR ODCD 1.1-7inan 'e Fire E1S EIP&R EPolice LIPW COGili SP ONSOR' S Approve a contract with USI Insurance to become broker of record for healthcare benefit SUMMARY services. RRVIIAVUI) BY E C.O.W. Mtg. E CDN Comm Z Finance Comm. El Public Safety Comm. 0 Trans &Infrastructure Arts Comm. Parks Comm. E Planning Comm. DATE: 06/24/19 COMMITTEE CHAIR: MCLEOD RECOMMENDATIONS: SPoNsuR/ADmIN. CmtNirriEk Human Resouces Unanimous Approval; Forward to C.O.W. COST IMPACT / FUND SOURCE EXPKNDITURL RI,:QUIRK1) AMOUNT BUDGETED APPROPRIATION REQUIRED $90,000 annually for 3 years $90,000 $0 Fund Source: SELF INSURED HEALTHCARE PLAN FUND #502 Comments: MTG. DATE RECORD OF COUNCIL ACTION 07/08/19 MTG. DATE ATTACHMENTS 07/08/19 Informational Memorandum dated 6/19/19 Contract for services with Exhibit A & B 07/15/19 2 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Juan Padilla, Human Resources Director BY: Erika Eddins, Human Resources Analyst CC: Mayor Ekberg DATE: June 19, 2019 SUBJECT: Healthcare Broker Contract ISSUE The Council is being asked to allow the mayor to execute a contract with USI insurance for healthcare broker services in an annual amount of $90,000, not to exceed $7,500.00 per month, for a 36 month period beginning mid -July 2019. BACKGROUND The City of Tukwila has had the same insurance broker for our self -funded health insurance program for many years. The broker's role is to help the City to manage the costs of both the retiree and active employee health insurance plans, as well as negotiate prices on life, long- term disability, and stop -loss insurance. With new leadership in the Human Resources department and following best practice to periodically go to the market to ensure competitive service and pricing, the City submitted a request for proposals (RFP) for healthcare broker services. DISCUSSION The City received five responses to the RFP, which were reviewed through a vetting process involving HR and Finance staff, Administration representatives and members of our labor partners. There was consensus from the group that USI was the clear winner based upon their industry experience and depth of service resources they offer. Sufficient funding for this contract exists within the 502 medical plan fund. The existing contract with the City's current broker will be terminated in late July to ensure a consistent transition between brokers. RECOMMENDATION The Finance Committee is being asked to forward this item to the Committee of the Whole, July 8, 2019, and then to Regular Meeting on July 15, 2019, for approval. ATTACHMENT Draft contract with Exhibits A and B 3 4 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 USI Insurance Services Northwest, hereinafter referred to as "the Contractor," whose principal office is located at 601 Union Street, Suite 1000, Seattle, WA 98101. 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 $90,000 at a rate of $7,500 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 July 16, 2019, and ending July 15, 2022, 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 5 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 ROW 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. Professional Liability Insurance with a minimum coverage of $1,000,000 per claim and $3,000,000 aggregate. Contractor shall provide evidence of such coverage in a manner and form acceptable to the City in the City's sole discretion. Cancellation of the required insurance shall automatically result in termination of this Agreement. 4. 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 CA Revised December 2016 Page 2 of 7 6 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. 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. CA Revised December 2016 Page 3 of 7 7 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 USI Insurance Services Northwest Allan Ekberg, Mayor ATTEST/AUTHENTICATED: By: Todd McMahon, Chief Compliance Officer, SVP Northwest Region Address: 601 Union Street, Suite 1000 City Clerk, Christy O'Flaherty Seattle, WA 98101 APPROVED AS TO FORM: Office of the City Attorney CA Revised December 2016 Page 4 of 7 8 EXHIBIT A INSURANCE BROKERAGE SERVICES Section 1.0 Analytical Services and Plan Administration: 1.1 Design of health care plans, cost -containment and other plan design recommendations 1.1.1 Review benefit designs and compare to City's strategic objectives. Recommend modifications where appropriate and assist the City in strategic benefit planning. Annually 1.1.2 Evaluate the impact of plan modifications on employees and the potential savings to the City. As appropriate 1.1.3 Evaluate alternate carriers and product offerings. Annually 1.1.4 Provide benefit benchmarking. As appropriate 1.1.5 Act as an advocate of the participants and City in resolving difficult claims and administrative problems. 1.2 Preparation of bid specifications (RFP) (as needed) 1.2.1 Consult with the City to establish objectives for market review and identify potential carriers or vendors. Annually 1.2.2 Assemble benefit, rate and claim data for inclusion in RFP. Annually 1.2.3 Deliver RFP to selected vendors and provide any requested additional information. Annually 1.3 Analysis of proposals and presentation of findings 1.3.1 Compare costs, funding, benefits, contracts, negotiated provider discounts, employee network disruption issues, financial strength and anticipated service level for each carrier or vendor, as appropriate. Annually 1.3.2 Present USI's recommended carriers or vendors. Recommendation supported by detailed analysis. Annually 1.3.3 Organize finalist meetings with the City, if appropriate. Annually 1.4 Renewal analysis and negotiation 1.4.1 Evaluate carrier underwriting practices. Annually 1.4.2 Negotiate with carriers based on internal underwriting analysis and market trends. Annually 1.4.3 Actuarial services and certification of rates and retiree subsidy. Annually 1.4.5 Assist in providing detailed annual financial accounting. Annually 1.5 Reporting/Servicing Meetings 1.5.1 Claims and utilization reporting or summary. Monthly 1.5.2 Review of annual accounting (as appropriate). Annually 1.5.3 Benefit Resource Center Reports Quarterly 1.5.4 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. Quarterly CA Revised December 2016 Page 5 of 7 9 Section 2.0 Account Management Services: 2.1 Contract Review 2.1.1 Perform contract and Benefit Booklet review for each brokered plan Annually 2.1.2 Compliance review and support As appropriate 2.1.3 Assist the City (Plan Sponsor) to comply with Federal and State Laws impacting benefit Plans, i.e., COBRA, PPACA, TEFRA, HIPAA As Appropriate 2.1.4 Evaluate current/prospective TPAs Annually 2.1.5 Assist with billing and eligibility problems As appropriate 2.1.6 Monitor TPA for compliance with contract terms. As appropriate 2.2 Employee Meetings 2.2.1 Employee meetings and/or benefit fairs will be limited to a maximum of (1) one per fifty (50) employees 2.2.2 Benefit fairs may be selected in lieu of employee meetings and will be limited to (1) per 100 benefit eligible employees. 2.3 Employer/Employee Communications Support 2.3.1 Consolidated Benefit Summary and Mobile App Build and Updates 2.3.2 USI Insider and Health & Wellness articles 2.3.3 Service Calendar 2.3.4 Technical Bulletins 2.3.5 Wellness Consulting, Program Design and Support 2.3.6 USI Benefit Resource Center — Advocacy Unit available to all members 6am- 6pm Pacific Time 2.4 Tax Reporting 2.4.1 Provide signature ready 5500 filings, along with other plan compliance materials as required by the Employee Benefits Security Administration. Annually Annually Annually Monthly Annually As appropriate As appropriate As Appropriate Annually CA Revised December 2016 Page 6 of 7 10 1.1 EXHIBIT B BROKERAGE FEES & COMMISSION SCHEDULE USI fees will be in effect for thirty-six (36) months following the date this Contract for Services is signed by both parties. In consideration of the performance of the Services as described in Exhibit A, USI shall be compensated as outlined below: USI Fees: Not to exceed $7,500 per month except where an additional service fee of $50 per month will be charged to accounts more than thirty (30) days past due. Fees, net of commission income received by USI from the insurance carriers, will be billed by USI on a monthly basis and are due by the end of the month for which brokerage services are provided. 1.2 For specific services that are requested in writing by the Client, but not outlined in the description of services to be provided by USI as outlined on Exhibit A, and where USI has provided a not to be exceeded by cost estimate for the requested service agreed to by the City , the City will be billed for work performed. The cost for these services will be billed on a per hour or per project basis and included in the next available monthly invoice. No services will be performed without prior written approval from the Client. 1.3 USI reserves the right to change the fees outlined in this section after expiration of this 36 month term. The City will receive a minimum of thirty (30) days notice prior to any changes in fees. 1.4 Fees are fixed for a period of 3 years and subject to negotiation thereafter. CA Revised December 2016 Page 7 of 7 11