2001-24536 RESO
RESOLUTION NO. 2001-24536
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA,
AUTHORIZING THE ADMINISTRATION TO ENTER INTO
NEGOTIATIONS AND, IF SUCCESSFUL, FURTHER
AUTHORIZING RENEWAL WITH HUMANA TO PROVIDE
GROUP MEDICAL INSURANCE FOR EMPLOYEES AND
RETIREES FOR A ONE-YEAR PERIOD EFFECTIVE ON
OCTOBER 1, 2001.
WHEREAS, on July 7,2000, the Mayor and Commission authorized the renewal of the
contract with Humana, effective on October I, 2000 to provide Group Medical Insurance for
Employees and Retirees for a one-year period; and
WHEREAS, Humana has offered renewal rates, effective on October I, 200] for a one-year
period, which are comparable to rates experienced by other governmental entities and private
corporations; and
WHEREAS, the Administration has determined that it is in the best interest of the City, its
employees, and retirees, to enter into negotiations with Humana, and if successful, renew the current
Group Medical Insurance; and
WHEREAS, the Administration recommends that the Mayor and City Commission authorize
the Administration to enter into negotiations with Humana and, if successful, authorize renewal with
Humana, to provide Group Medical Insurance for Employees and Retirees, for a one-year period,
effective on October I, 2001.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, the Mayor and City
Commission hereby authorize the Administration to enter into negotiations and, if successful, further
authorize renewal with Humana to provide Group Medical Insurance for employees and retirees, for
a one-year period, effective on October I, 200 I.
PASSED AND ADOPTED this 18th day of
July
,2001
Attest:
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City Clerk
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Mayor
APPROVED AS TO
FORM & LANGUAGE
& FOR exECUTION
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~ITY OF MIAMI BEACH
.ITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
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L.T.C. No. ld~-atjfJ I
LETTER TO COMMISSION
June 4, 2001
TO:
Mayor Neisen O. Kasdin and
Members of the City Commission
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FROM:
Jorge M, Gonzalez J ~
City Manager I" - U
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SUBJECT:
CITIZEN/STAFF GROUP HEALTH INSURAi"lCE TASK FORCE
For some time the City has struggled with the issue of how best to provide Group Health Insurance
to its employees. Rising costs combined with lower levels of available benefits has challenged the
traditional methods of procuring health care services for the City of Miami Beach. Additior:ally, the
City has unique City Charter, City Code, and bargaining unit requirements that add complexity to
the issue. In recent years, the City has been through a few separate processes to procure Group
Health Insurance, but has not been satisfied with the outcomes.
T.'1e City continues to be challenged by this important issue. As a result, the Finance and Citywide
P7oje~ts CClnmittee, at tIle request of Commissioner Simon Cmz, recommended that a Citizen/Staff
Task Force be formed to examine the issue.
Attached, please fmd a Charter for the Miami Beach Group Health Insurance Task Force, Theintent
of the Charter is to define the issue and provide direction to the Task Force, I intend to move
forward with the Task Force as soon as possible and would like the group to begin meeting this
month,
I am available to discuss the issue as questions, comments, or concerns arise.
attachment
JMGrm
c: Assistant City Managers
Department and Division Directors
Task Force Members
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Miami Beach Group Health Insurance Task Force
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.. - - On~arch-1; 2<iOi~ Commissioner Simon CrUi'wrote~amemorandiiID to CitY .
Manager Jorge M. Gonzalez asking that the establishment of a Citizen/Staff Task Force
on Group Health Insurance be referred to the Finance and Citywide Projects Committee.
The matter was referred to the Finance and Citywide Projects Committee by the City
Commission at their March ]4,2001 meeting. The Finance and Citywide Projects
Committee met on March 20, 2001, and approved the establishment of a Citizen/Staff
Task Force on Group Health Insurance, The Finance and Citywide Projects Committee
recommended their approval in a report to the City Commission on April 18, 2001.
This document serves as the initial Charter for this Task Force,
Puruose:
Work Product:
Scope of Work:
Authoritv:
The purpose of the Task Force is to develop a comprehensive
solution that addresses the City's continuing and growing
challenges in the area of group health insurance, This includes the
examination of benefit levels, plan design, cost, coverage, and a
measure of the impact to any adopted changes to the affected
employee and retiree groups.
The Task Force is expected to develop a series of written, viable
alternatives for the design of the City's Group Health Insurance
Program(s) for consideration by the City Manager and the City
Commission. Included with each alternative should be an
explanation of the design, cost, impact to employees and retirees,
advantages, and disadvantages. The Task Force should make and
justify their recommendation of the best available solution.
Recommendations may be split into short-term and long-term
objectives,
The Task Force is limited to an examination of how Group Health
Insurance is provided and to making recommendations for
improving the provision of Group Health Insurance to all City
employees and retirees at a reasonable cost, The Task Force
should take the perspective that the end goal is intended to be in -
the best interest of the City - albeit, providing full attention to the
benefits derived from a workforce that is receiving quality health
insurance, The Task Force should be mindful of the Scope of
Work and make every effort to maintain a focus on this important
and complex issue,
The Task Force has the authority to collect information needed to
examine the Scope of Work. City Staff members should make a
concerted effort to attend Task Force meetings and to complete
follow-up and related work between meetings as this is a priority
of the City, Department Directors are requested to provide
employees who are Task Force members a reasonable amount of
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Miami Beach Group Health Insurance Task Force
time and latitude to redirect their efrorts towards the completion of
the Scope of Work.
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The Task Force is an advisory body and does not have the ability
to make binding decisions.
Lel!:al Mandates:
The Task Force must consider and incorporate the legal obligations
contained within the State Statutes, City Charter, City Code,
Collective Bargaining Agreements, Group Insurance Board
regulations, and any other legally binding authority that affects the
City's Group Health Insurance prograrn(s), Alternatives may be
developed and considered for the modification of some or all of the
respective sources of legal requirements, but processes, including
timelines and an estimate of viability should accompany such
alternatives, Task Force representatives from the City's Risk
Management Division will make available copies of the various
legal obligations and will provide the City's interpretation of the
obligations,
Members:
The recommended composition of the Task Force is as follows:
Clifton Leonard, Risk Manager
Mary Greenwood, Labor Relations
Tim Hemstreet, Special Assistant to City Manager
ManagerlProfessional Operating Department
ManagerlProfessional Operating Department
FOP Representative
IAFF Representative
GSAF Representative
CWA Representative
AFSME Representative
Jerry (Dee Dee) Weithom, Budget Advisory Committee
Marc Jacobson, Budget Advisory Committee
Bruce Davidson, Budget Advisory Committee
Buddy Dresner, Group Insurance Board (Retiree)
Roberto Sanchez, Health Care Consultant
Phyllis Miller, Citizen
The membership of the Task Force represents a cross section of
employees and residents, Although each member could be
construed to represent a particular constituency, it is expected that
each member will act in the best interest of the City, Members are
also charged with keeping their individual constituencies up-to-
date with the activities of the Task Force and are encouraged to
pass on the perspectives of those they represent,
2
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Miami Beach Group Health Insurance Task Force
Currently, all General Employees, classified and unclassified, are
covered by one of the three Humana plans unless they waive health
insurance altogether.
Since October I, ] 986, approximately 200 employees (all members
of the fire fighters bargaining unit and some unclassified fire
management employees), have had medical insurance coverage
provided by the Florida Fire Fighters Health Insurance Trust Plan.
Since January], 1991, approximately 300 employees (all members
of the police officers bargaining unit and some unclassified police
management employees) have had medical insurance coverage
provided by the Miami Beach Fraternal Order of Police Health
Trust, In both situations, the health insurance construct is pursuant
to the respective collective bargaining agreement. The City pays
to the respective health trust 90% of its per employee or family
PPO payment,
The City has experienced considerable increases with its Group
Health Insurance rates over the past few years, In response to this
situation, the City has gone out for Bid and for RFP in an effort to
procure more competitive rates for Group Health Insurance. The
City has been unsuccessful in securing a Group Health Insurance
provider that is able to meet the City's needs and cost containment
goals. As a result, the City hired a Broker to assist with plan
design and other activities to identify the best Group Heaith
Insurance alternatives,
Duration:
The Task Force is expected to conclude its work within six months
of its inception.
4
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\ci.miami-beach.fI.u5
COMMISSION MEMORANDUM NO. It[ff,()j
TO:
Mayor Neisen O. Kasdin and
Members ofthe City Commission
Jorge M. Gonzalez ,~
City Manager 0 . 0
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE
ADMINISTRATION TO ENTER INTO NEGOTIATIONS, AND IF
SUCCESSFUL, AUTHORIZING RENEWAL WITH HUMANA, TO
PROVIDE GROUP MEDICAL INSURANCE FOR EMPLOYEES AND
RETIREES, FOR A ONE-YEAR PERIOD EFFECTIVE OCTOBER 1, 2001.
DATE: July 18,2001
FROM:
SUBJECT:
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
FUNDING
The estimated annual premium is $10,393,000.00. Premium contributions will be split 50/50 between
employee/retiree deductions and City contributions. City contribution funding is available from
Budget Accounts of various departments, subject to OMB approval. This estimate is based on the
existing number of employees and retirees enrolled in each of the plans. The estimated premium
represents an annual increase of$843,500.00 for the City and a like amount for plan members.
ANALYSIS
The City currently contracts with Humana to provide Group Medical Insurance for employees and
retirees. As a result of premium increases and the City's inability to obtain acceptable replacement
coverage for the current Humana plan, the Mayor and City Commission, on April 18, 2001,
authorized the City Manager and City Clerk to execute an agreement with Arthur J. Gallagher and
Co., to provide assistance in determining the City's Group Medical Insurance needs and the issuance
of an RFP for Group Medical Insurance. Negotiations with Arthur J. Gallagher and Co. were
successful and they have assumed the role as Broker of Record.
Agenda Item R7 L.
Date /-IY-O/
On March 2, 2001, Commissioner Simon Cruz wrote a memorandum to City Manager Jorge M.
Gonzalez asking that the establishment of a Citizen/Staff Task Force on Group Health Insurance be
referred to the Finance and Citywide Projects Committee. The Finance and Citywide Projects
Committee met on March 202001, and approved the establishment of the Citizen/Staff Task Force
on Group Health Insurance. The Finance and Citywide projects Committee recommended their
approval in a report to the City Commission on April 18, 2001.
The purpose of the Task Force is to develop a comprehensive solution that addresses the City's
continuing and growing challenges in the area of group health insurance. *Please see the attached
LTC regarding the responsibilities of the Group Health Insurance Task Force.
The Administration, with the assistance of the City's Broker and the Group Health Insurance Task
Force is proceeding with the following in order to obtain acceptable Group Medical Insurance:
1. The City's Broker has obtained renewal quotes from Humana for the current Group Medical
Insurance plan and recommending renewal effective October 1, 2001, to avoid any disruption
in medical coverage.
2. The City's Broker has prepared and will issue an RFP for Group Medical Insurance.
3. The City's Broker, the Group Insurance Board, and the Administration will review the
responses to the RFP with specific emphasis on benefit levels, plan design, cost, coverage and
the impact of any adopted changes to the affected employee and retiree groups.
4. The City's Broker and the Group Health Insurance Task Force will review viable alternatives
for the design of the City's Group Medical Insurance plan for consideration by the City
Manager and the City Commission.
Humana has proposed renewal rates with increases of 14.1% for the HMO, 16.39% for the POS, and
28% for the PPO effective plan year October 1,2001. Arthur 1. Gallagher and Co. reviewed the
proposed increases and has advised that they are comparable to rate increases being experienced by
other governmental entities and private corporations. The current biweekly rates and proposed
increases for each plan for employees/retirees are as follows (the City contributes the same amount):
EMPLOYEE BIWEEKLY RATES
Plan Current Rate New Rate Increase
HMO Single $52.40 $59.68 $7.28
HMO Family $129.88 $148.27 $18.39
POS Single $62.00 $72. 17 $10.] 7
POS Family $153.83 $179.06 $25.23
PPO Single $98.96 $126.69 $27.73
PPO Family $242.98 $310.83 $67.85
In addition to the above renewal rates (the above rates are based on a two-tier single/family), we have
requested that Humana provide renewal rates based on a multi-tier plan. The multi-tier rates would
provide for employee, employee plus one, employee plus two, and employee plus three or more. We
believe that the multi-tier rates may prove to be more equitable for both employees and retirees
currently participating in the Group Medical Plan.
The Administration believes that it is in the best interest of the City, its employees, and retirees to
negotiate and if successful, renew the current Humana Group Medical Plan effective October], 2001
and concurrently continue with the RFP process and analysis ofthe Group Medical plan. By moving
forward with the Humana renewal, the City will insure that there is no disruption in health coverage
and will also allow adequate time for all plan participants to make changes during open enrollment
(September 1, 2001 to September 30,2001). In the event the Administration receives a favorable
response to the RFP, the plan with Humana may be terminated upon written notice prior to any
premium due date (the premium due date is the first of every month).
The Administration recommends that the Mayor and Commission adopt the attached Resolution,
authorizing the Administration to enter into negotiations, and if successful, authorize the renewal
with Humana, to provide Group Medical Insurance for Employees and Retirees, for a one-year period
effective October I, 200 I.
MG
JMG:PDW:MG:c~
Attachments
flRISK\$ALLIClifl\Health\rlj>-com\med-rOO
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