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HomeMy WebLinkAboutReg 2019-07-15 Item 4A - Contract - 2019-2021 Health Care Broker with USI Insurance for $90,000 AnnuallyCOUNCIL AGENDA SYNOPSIS ------------- ----- ---------- Meeting Date Prepared by Ma ,ors review Council review 07/08/19 JP LJi 07/15/19 JP xy AV_ ii i-J-- ITEM INFORMATION ITEM No. 4.A. STAFF SPONSOR: JUAN PADILLA ORIGINAL A(;kN1)1\ DATI.;: 07/08/19 AGrNDA Palm TITLK Healthcare Broker Services 07/08/19 Motion Date 7/15/19 E Resolution Mtg Dale El Ordinance Mg Date 11 Bid Award Mt g Date Public Hearing MtsDate Other AI/spate CAmGoRy , Discus/on Fli Mtg Dale AN SPONSOR Council EMciyor -IR IMDCD LFinance Ljiire DTS . P c'7-R Police LIIPIV Llcouri SPONSOR'S Approve a contract with USI Insurance to become broker of record for healthcare benefit SummARy services. RINIEWIM BY E C.O.W. Mtg. E CDN Comm E Trans &Infrastructure Arts Comm. DATE: 06/24/19 Finance Comm. E3 Public Safety Comm. Comm. Planning Comm. CHAIR: MCLEOD 111 Parks COMMITTEE RECOMMENDATIONS: SPONSOR/ADMIN. CommyriEr, Human Resouces Unanimous Approval; Forward to C.O.W. COST IMPACT / FUND SOURCE ExiTNDITuRk RNQuiRi A) 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 Forward to Regular Meeting MTG. DATE ATTACHMENTS 07/08/19 Informational Memorandum dated 6/19/19 Contract for services with Exhibit A & B 07/15/19 Info memo dated 7/10/19 (updated aiter 7/8/19 C.0.14. w/ attachments Minutes from the Finance Committee Mtg on 6/24/19 21 22 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: July 10, 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. Update from July 8, 2019 COW Meeting: Council requested the following additional information at the July 8th COW meeting: 23 INFORMATIONAL MEMO Page 2 TOP 3 PROPOSALS PROPOSED ANNUAL CONTRACT COST FOR PROFESSIONAL SERVICES Alliant $52,750 Gallagher $85,200 USI $90,000 CURRENT BROKER ANNUAL CONTRACT COST FOR PROFESSIONAL SERVICES RL Evans $68,750 Vendor Scope of Services The following services for each vendor are inclusive of their proposed annual contract cost. Alliant • Strategic Benefit Consulting • Health & Productivity Consulting • Annual Renewal Report and Financial Analysis • Plan Implementation and Administrative Support • Compliance • Benefit Administration Outsourcing Gallagher • Strategy & Design • Financials & Analytics • Plan Management and Administration • Compliance USI • Underwriting & Data Analytics • Human Resources Services • Population Health Management • Regulatory Compliance/Healthcare Reform • Care Intervention • Pharmacy Solutions • Ancillary Benefits Summary USI is the vendor recommended by staff and our labor partners. Value added is in expectation of future benefit cost savings to off -set the increase in professional service costs, as well as immediate increase in customer service support to employees and their dependents. There was consensus to go with USI for the following reasons and staff believes the additional cost is acceptable to cover this enhanced level of service: 24 INFORMATIONAL MEMO Page 3 • Cost containment and medical benefit plan design recommendations based on actual plan utilization data using strong data analytic tools to focus on lowering fixed costs and increasing plan flexibility to find cost savings. • Access to USI's Benefit Resource Center where advocates will assist employees in claims resolution and benefit coverage questions and support Human Resources staff with benefit plan administration. • Access to a national network and comprehensive range of insurance products and services. • Will negotiate provider contracts for most competitive rates on stop -loss coverage, third -party claims administration services, and pharmacy benefit services. • Account managers assigned to Tukwila include a service team with a combined 65 years of experience in the industry. • In-house actuary and compliance team. • Wellness program support. RECOMMENDATION The Finance Committee is being asked to forward this item to the COW, July 8, 2019, and then to Regular Meeting on July 15, 2019, for approval. Council is being asked to approve this contract with USI to become our broker of record at the July 15, 2019, Regular Meeting. ATTACHMENT Draft contract with Exhibits A and B 25 26 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 27 6. Indemnification. The Contractor shall dafend, indemnify and hold the Public Enthv, its offioara, offido|o, employees and volunteers harmless from any and all claims, injuries, donnages.|oaseaorouitainc|uding attorney fees, arising out of or in connection with the performance of this Agreement, except for injuries and damages caused bythe sole negligence ofthe Public Entity. Should a court of cornnehart jurisdiction determine that this Agreement is subject to RCVV 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons ordamages to property caused byorresulting from the concurrent negligence of the Contractor and the Public Entity, its officers, officia|e, ennp|nyeeo, and volunteers, the Contractor's liability hereunder shall be only tVthe extent of the Contractor's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Contractor's waiver Vfimmunity under Industrial Insurance, Title 51 RCVV, solely for the pU[pOSeS of this indemnification. This waiver has been mutually negotiated by the parties. The provisions ofthis section shall survive the expiration ortermination Qfthis Agreement. 7' Insurance. The Contractor shall procure and maintain for the duration ofthe Agreement, insurance against claims for injuries topanaonaurdennogetopnJpertyvvhiohrnoyoriaefnonnVrinconnectionvvith the performance of the work hereunder by the {}ontnactor, their agents, nepreoentetimsa, 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 O[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 @ nOininnuno combined single limit for bodily injury and property damage of $1.000.000 per accident. Automobile liability insurance ohoU cover all oxvned, non-Ovvned, hired and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) hJrn CA OO 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 prod u cts-co m pleted operations aggregate limit. Commercial General Liability insurance shall be as least at broad as ISO occurrence form CG 0001 and shall cover liability arising from pnannioeo, operations' independent contractors, products -completed operations, stopgap |iabi|ity, personal injury and advertising injury, and liability assumed under aninsured contract. The Commercial General Liability insurance shall be endorsed toprovide aper project Qeneno|agQragate|innituaing|G[)hzrnnCG25O3O5OSor onequivalent endorsement. There shall benoexclusion for liability arising from explosion, collapse orunderground property damage. The City shall benamed aaanadditional 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 30 37 10 01 or substitute endorsements providing atleast oobroad 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 intermination 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 pO|iCi8S are to cont8in. or be endorsed to contain that they Sh8U be primary CA Revised December 2016 Page 2 of 7 28 insurance with respect to the City. Any inouranca, aelf-inaunance, 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 o currentA.K4. Best rating of not less than A: VII. O. 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 endoroenlert, 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 po|iciea, including endonaennento, required in this Agreement and evidence of all subcontractors' coverage. E. Subcontractors. The Contractor shall have ao|m responsibility for determining the insurance coverage and limits required, if any, to be obtained by subcontractors, which determination shall be made inaccordance 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 cgnceUmhOO. within two business days of their receipt of such G. Failure tmMaintain Insurance. Failure onthe part nfthe Contractor tomaintain the insurance as required ahnU constitute o nnotehm| breach of contract, upon which the City may, after giving five business days notice tothe Contractor tocorrect the breach, immediately terminate the contract or, at its discretion, procure Orrenew 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 ofthe City, offset against funds due the Contractor from the City. 0. Record Keeping and ReporUnq. A. The Contractor shall maintain accounts and necordo, including personnel, ppopertv, financial and programmatic records which sufficiently and properly reflect all direct and indirect costs of any nsduns expended and services performed in the performance of this Agreement and other such records as may bedeemed necessary bythe City toensure the performance of this Agreement. B. These records shall be maintained for @ period of seven (7) years after termination hereof UD|eSS permission tDdestroy them iSgranted bythe office Dfthe archivist iDaccordance with RCVVChapter 40.14 and by the City. 5. Audits and Inspections. The records and documents with respect to all matters covered by this Agreement shall be subject at all times to inspeudon, 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'n intention to terminate the same. Failure to provide products on schedule may result incontract termination. If the Contractor's insurance coverage iacanceled for any reason, the City shall have the right toterminate this Agreement immediately. 11. Discrimination Prohibited. The Coneu|tant, with regard to the work performed by it under this Agreement, will not discriminate on the grounds of race, religion, creed, CO|O[' national origin, age, veteran status, sex, sexual orientadon, gender identity, marital ototuo, political mffi|iedon, the presence of any diaabi|ity, or any other protected class statue under state or federal |ovv, in the selection and retention ofemployees orprocurement nfmaterials orsupplies. 12.Assignrnent 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. CARevised December 2O1G Page 3of7 29 13. Entire Aqremmnmnt; Modification. This Aoreemert, together with attachments or oddenda, represents the entire and integrated Agreement between the City and the Contractor and supersedes all prior negotiaUona, nypnsaentodona, 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. Sovenmbi|itVond Survival. |fany term, condition orprovision ofthis Agreement isdeclared void ur 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 /\oreernent, 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 ofTukwila G2O08outhcenterBlvd. Tukwila, Washington 98188 Notices to the Contractor shall be sent to the address provided by the Contractor upon the signature line below. 16.App|icab|e Law; Venue; Attornay'm Fees. This Agreement shall be governed by and construed in accordance with the |ovva of the State of Washington. In the event any uuit, orbitradion, 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 ottorney'afeae and costs of suit. DATED this day of 120CITY OF TUKWILA USI Insurance Services Northwest Allan Ekberg, Mayor ATTESTAAUTHENTCATED: APPROVED AS TO FORM: Office of the City Attorney By: Todd K8cMahon, Chief Compliance Officer, SVPNorthwest Region Address: 601 Union Sine8|, Suite 1000 CA Revised December 2016 Page 4 of 7 30 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 oonnpana to Qty'a strategic objectives. Recommend modifications where appropriate and assist the City instrategic benefit planning. Annually 1.1.2 Evaluate the impact of plan modifications on employees and the potential savings LOthe City. As appropriate 1.1.3Evaluate alternate carriers and product offerings. Annually 1.14Provide benefit beOchnUa[hiOg. As appropriate 1.1.5Act as an advocate of the participants and City in resolving difficult claims and administrative problems. 1.2 Preparation 0fbid specifications (RFp) (as needed) 12 1 Consult with the City to establish objectives for market review and identify potential carriers O[vendors. Annually 1.22Assemble benefit, rate and claim data for inclusion iDRFP. Annually 1.2.3Deliver RFPtOselected vendors and provide any requested additional information. AOOU@Uy 1.3 Analysis of proposals and presentation of findings 1�3.1 Compare cnstS, funding, benefits, COntractS. negotiated provider discounts, employee network disruption issues, financial strength and anticipated service level for each carrier orvendor, as appropriate. Annually 1.3.2Present US|'orecommended carriers orvendors. Recommendation supported by detailed analysis. Annually 1.3.3Organize finalist meetings with the City, ifappropriate. 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 /\ctU@Fi@| services and certification of rates and [ed[8e subsidy. Annually 1.4.5Assist iOproviding detailed annual financial accounting. Annually 1.5 RepVrdOg/SenviciDgMeetngS 1.5.1 Claims and utilization reporting or summary. Monthly 1.5.2Review Ofannual accounting (as @ppFophate). AOOU8Uy 1.5.3Benefit Resource Center Reports Quarterly 1.5.4 Meet' at least quarterly, with H83|ih [|gFe [|D[DOlittee' and as desired, with City representatives LOdiscuss claims experience, administration Services' cost containment ideas, benefit design, new pR)g[@OOs and other employee benefit plan iSSUeS and pPDb|eDlg. Quarterly CARevised December 2016 Page 5of7 31 Section 2.0 Account Management Services: 2.1 CODt[8Ct Review 2.1.1 Perform contract and Benefit Booklet review for each brokered plan AOOu8||y 2.12Compliance review and support As appropriate 2.1.3 Assist the City (Plan Sponsor) to comply with Federal and State Laws impacting benefit Plans, ie,COBRA, PPACA.TEFRA.H|P/A 2.1.4 Evaluate curnsnt/oroapoctiveTPAa 21.5 Assist with billing and eligibility pn)b|enlS 2.1.6 Monitor TPA for compliance with contract terms. 2.3 Employee Meetings 2.2.1 Employee meetings and/or benefit fairs will be limited to a maximum of (1) one per fifty /5O\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 EOlp|oyer/EDl[d0yeeCOnO[DUnicatiOOs Support 2.3.1 Consolidated Benefit Summary and Mobile AppBuild and Updates 2.3.2 U8| Insider and Health &VV8UneSS articles 2.3.3 Service {}@|eDda[ 2.3.4TechOiC@| Bulletins 2.3.5Wellness Consulting, Program Design 8DdSuppnrt 2.3.8 US| Benefit Resource CeDter—AdvVcacy Unit available to all Ole[DbenS OaDl- 6pOlPacific Time 3.4Tax Reporting 24.1 Provide signature ready 5500 filings, along with other plan compliance materials as required by the Employee Benefits Security Administration. As Appropriate /\OOu@Uy As appropriate As appropriate /\nnU8Uy Annually Annually Monthly Annually Aaappropriate As appropriate As Appropriate Annually CA Revised December 2016 Page 6 of 7 32 11 EXHIBIT BROKERAGE FEES &C[3K4K0|S@|ON SCHEDULE U8| fees will be in effect for thirty-six (30) months following the date this Contract for Services is signed by both parties. In COOSide[8don of the performance of the Services as described in Exhibit A' US| shall be compensated asoutlined below: US[ Fees: Not tOexceed $7'500 per month except where GO additional service fee Of$5O per DlOrdh will be charged to accounts more than thirty (30) days past due. Fees. net of commission income received byUS|from the insurance carriers, will bebilled byUS|OOgmonthly basis and are due bythe end ofthe month for which brokerage services are provided. 12 For specific services that are requested in vv[bng by the Client, but not outlined in the description of services to be provided by US| as outlined on Exhibit A, and where UG| has provided a not to be exceeded by oust eadnnob* 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 o per hour or per project basis and included in the next available monthly invoice. N0services will be performed without prior written approval from the Client. 1.3 U8| 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 33 34 Finance Committee Minutes June 24, 2019 B. Public Safety Plan: UTGO & LTGO Bond Ordinances Staff is seeking Council approval of an ordinance to authorize the issuance of not to exceed $40.885 million in Unlimited Tax General Obligation (UTGO) bonds and not to exceed $25 million in Limited Tax General Obligation (LTGO) bonds for the Public Safety Plan. This bond issuance is provided for in the 2019-2020 biennial budget and costs will be reduced by timing LTGO with UTGO bonds. Mr. Brown provided an overview of the financings including background, timing considerations, and milestones. Committee members asked clarifying questions and asked for an updated debt service chart. UNANIMOUS APPROVAL. FORWARD TO JULY 8, 2019 COMMITTEE OF THE WHOLE. C. Contract: Health Care Broker Services Staff is seeking Council approval of 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 term of 36 months. The City received five responses to its Request For Proposals, and USI was determined to be the most qualified based upon experience and service. Funding for this contract exists within the 502 medical plan fund. Councilmember Hougardy asked if service providers would change. Staff replied that minor adjustments may be made but it is into the intent to change providers. Chair McLeod asked if there is a cost savings associated with the change in brokers. Staff said that there may be savings associated with benefit changes but the immediate benefit is the customer service to employees. Councilmember Quinn stated appreciation for the City engaging in a competitive bidding process for this service. UNANIMOUS APPROVAL. FORWARD TO JULY 8, 2019 COMMITTEE OF THE WHOLE. D. April 2019 Department Budget-to-Actuals Report Staff presented the Committee with the April 2019 Financial Report, which describes the general state of departmental expenditures and highlights significant trends. General Fund expenditures totaled $22.4 million as compared to the allocated budget of $22.8 million. The allocated budget reflects year-to-date spending patterns of the previous year. Significant unbudgeted events include the East Marginal Way power pole accident on April 5 and the February snowstorms. A claim totaling $245K has been initiated with the Washington Cities Insurance Authority for reimbursement of the expenses associated with the power pole incident. Unbudgeted costs associated with the snowstorms total $81,497. 11 of 14 General Fund departments were under their allocated budget. Fire, Street Maintenance & Operations, and Community Development have overages due to pipeline positions and overtime costs, snow and power pole events, professional services and structural code compliance review respectively. DISCUSSION ONLY. III. MISCELLANEOUS Adjourped at 6:29 p.m. Committee Chair Approval Minutes by LH 35