96-22131 RESO
RESOLUTION NO.
96-22131
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, EXTENDING THE
EXISTING CONTRACT FOR GROUP MANAGED
CARE/INDEMNITY DENTAL PLANS WITH PRUDENTIAL
INSURANCE COMPANY OF AMERICA ON A MONTHLY BASIS,
COMMENCING ON OCTOBER 1,1996.
WHEREAS, Invitation to Bid No. 14 - 94/98 was awarded to Prudential Insurance Company
of America for the Group Managed Care/Indemnity Dental plans for a one-year period on July 12,
1995, with the option to renew for up to three additional one-year periods; and
WHEREAS, the Administration recommends approving the extension of the existing
contract for the Group Managed Care/Indemnity Dental plans, on a monthly basis, commencing
on October 1, 1996, with a 32.7% premium rate increase; and
WHEREAS, the extension will allow for a new bid to be issued and a recommendation to
be determined; and
WHEREAS, the City will need to provide a thirty (30) day cancellation notice to Prudential
upon terminating the contract.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission
hereby extend the present contract for the Group Managed Care/Indemnity Dental Insurance Plan with
Prudential Insurance Company of America on a monthly basis, commencing on October 1, 1996, allowing
sufficient time to bid the dental plan.
ADOPTED this 25th day of
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CITY CLERK
CITY OF
MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA33139
COMMISSION MEMORANDUM NO. ~e.U IscJ
TO:
Mayor Seymour Gelber and
Members of the City Commission
DATE: September 25, 1996
FROM:
Jose Garcia-Pedrosa .11/ ..
City Manager /
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RESOLUTION 'PROVING THE EXISTING CONTRACT OF GROUP MANAGED
CAREIINDEMNITY DENTAL INSURANCE PLAN WITH PRUDENTIAL
INSURANCE COMPANY OF AMERICA ON A MONTHLY BASIS
SUBJECT:
ADMINISTRATION RECOMMENDATION:
The Administration recommends that the Mayor and City Commission approve the resolution
authorizing the extension of the present contract on a monthly basis for the existing Invitation to
Bid No. 14-94/98 with Prudential Insurance Company of America, with a 32.7% rate increase for
the Group Managed Care/lndemnity Dental Insurance Plan.
BACKGROUND:
Invitation to Bid No. 14-94/98 was awarded to Prudential Insurance Company of America for a one-
year period on July 1?, 1995, with the option to renew for up to three additional one-year periods.
On June 10, 1996, Prudential proposed a 40.9% rate increase commencing October 1, 1996.
Prudential also offered several options which would reduce the proposed rate increases. There
was some discussion of reducing benefits; however, the Group Insurance Board voted against any
benefit reductions. After several meetings with the Group Insurance Board and Health Advisory
Committee, Prudential reduced their proposed rate increase to 32.7% from their initial 40.9%.
The Group Insurance Board is comprised of the presidents of the American Federation of State,
County and Municipal Employees (AFSCME), and the Communication Workers of America (CWA),
a retiree representative, and three Administrative representatives as well as the Human Resources
Director. The Health Advisory Committee is a 13 member City Board comprised of individuals from
the community who are involved with the health industry.
ANAL YSIS:
Prudential's proposed cost increases were evaluated by the City Administration, Health Advisory
Committee and Group Insurance Board and were found to be substantial. Therefore, due to the
time constraints, the City Administration is requesting that the existing contract be extended until
a new bid is issued and a recommendation can be reached. It is recommended that the extension
DATE
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AGENDA ITEM
be on a monthly basis, with a 32.7% premium increase for the Group Managed Carellndemnity
Dental Insurance Plans, commencing October 1, 1996. The City Administration will need to provide
a 3~ay cancellation notice to Prudential upon termination of the existing contract.
CONTRACT AMOUNT AND FUNDING:
$51,300
Monthly cost for Fiscal Year 1995/96 for the Group
Managed Care/lndemnity Dental Plan.
$26,200
Estimated monthly cost increase in Fiscal Year
1996/97, based on the 32.7% rate increase and an
increase in the number of members enrolled in the
group dental plan.
$77,500
Estimated monthly cost to be shared equally
between City and Employee/Retiree contributions
for the Group Managed Care/Indemnity Dental
Plan.
CONCLUSION:
The Administration recommends that the Mayor and City Commission approve the attached
resolution extending the existing contract between the City of Miami Beach and Prudential
Insurance Company of America, on a monthly basis commencing October 1, 1996.
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SUBJECT: PRUDENTIAL DENTAL REPORT
Pursuant to the last Commission meeting on September 11, 1996, there were several concerns.and
questions aSked by the Commission regarding the Prudential Dental Insurance Plan. The Health
Advisory Committee and Group Insurance Board had many meetings during the renewal rates
discussion. Three areas of great concern were the nwnber of participating dentists on the DMO list,
especially on Miami Beach; timely claims experience reporting; and the upcoming renewal premium
rates.
However, due to the time constraints of having the item approved prior to the August Commission
recess and the need for open enrollment in September, both boards recommended the new proposed
increase with the understanding that the City will resume discussion on self-insuring or going out
for bids in the Winter of 1996. The boards felt this will allow the City sufficient time to look at all ~
the options and choose the best plan for the employees, retirees, and the City of Miami Beach in
general.
The City administration will be examining the following three options: I) self-insuring; 2) direct
reimbursement; or 3) fully insuring the dental plan. The dental insurance will be scheduled to go
out for bidding in three months (after the Health Advisory Committee and Group Insurance Board
agree to the plan benefits design and plan options).
Please be advised that Prudential has agreed to provide dental coverage on a monthly basis at the
32.7% rate increase, effective October 1, 1996. The City will need to provide Prudential with a 30
day cancellation notice upon terminating the contract. This option will provide the City with
additional time to bid the dental plan without committing ourselves to an additional one-year
contract period.
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