2009-27139 ResoRESOLUTION NO. 2009-27139
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE
CITY TO ENTER INTO AN AGREEMENT WITH HARTFORD
LIFE AND ACCIDENT INSURANCE COMPANY FOR A
STATUTORY ACCIDENTAL DEATH AND DISMEMBERMENT
POLICY FOR POLICE AND FIREFIGHTERS FOR A THREE
YEAR PERIOD, COMMENCING ON OCTOBER 1, 2009, AND
ENDING ON SEPTEMBER 30, 2012, FOR AN ANNUAL
PREMIUM OF $13,000, PURSUANT TO THE REQUEST FOR
PROPOSALS ISSUED BY GALLAGHER BENEFITS SERVICES,
THE CITY'S CONSULTANT OF RECORD.
WHEREAS, Sections 112.19 and 112.191, Florida Statutes, require
municipalities to provide at least $50,000 in Accidental Death & Dismemberment
Insurance (AD&D) to all law enforcement (police) officers and firefighters; and
WHEREAS, the City's current policy expires on September 30, 2009; and
WHEREAS, the Administration worked with Gallagher Benefit Services
(Gallagher), the City's consultant of record, to issue a Request for Proposals (RFP) for
accidental death and dismemberment coverage for (police) officers and firefighters; and
WHEREAS, two (2) carriers responded, with City's the current carrier, Hartford
Life and Accident Insurance Company, submitting the lowest bid, which included a
premium reduction of twenty percent (20%); and
WHEREAS, after thoroughly evaluating the respondents, Gallagher recommends
the renewal of the City's AD&D policy with Hartford Life and Accident Insurance
Company; and
WHEREAS, the City Manager has reviewed the recommendations of Gallagher
and recommends accepting the recommendation of Gallagher, renewing the City's AD&D
policy with Hartford Life and Accident Insurance Company.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby authorize the City to enter into an agreement with Hartford Life and
Accident Insurance Company for a Statutory Accidental Death and Dismemberment
policy for Police and Firefighters for a three year period, commencing on October 1,
2009, and ending on September 30, 2012, for an annual premium of $13,000, pursuant
to the Request for Proposals issued by Gallagher Benefits Services, the City's
consultant of record.
PASSED and ADOPTED this 15th day of July , 2009.
M O
Mattie Herrera Bower
TTEST:
CITY CLERK
Robert Parcher
T:WGENDA\2009Uu1y 15\Regular\Statutory AD&D Resolution.doc
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution authorizing the City to enter into an agreement with Hartford Life and Accident Insurance
', Company for a Statutory Accidental Death and Dismemberment Policy for Police Officers and Firefighters.
~ntenaea outcome
• Attract and maintain a quality workforce.
• Ensure ex enditure trends are sustainable over the Ion term.
Supporting Data (Surveys, Environmental Scan, etc.):
I. 2007 Internal Support Functions Survey
• Overall satisfaction of benefits administration was rated 75.6% as excellent or good combined
II. 2008 Environmental Scan
• Motivated and Skilled Workforce turnover rates = 13.86% for 2007 vs. 10.7% for 2006
Issue:
i Should the City renew its current Statutory Accidental Death and Dismemberment Policy for Police Officers and
~ Firefighters with Hartford Life and Accident Insurance?
item SummaryiRecommenaatlon:
Florida Statutes Sections 112.19 and 112.191 require municipalities to provide at least $50,000 in Accidental
Death & Dismemberment Insurance (AD&D) to all law enforcement officers and firefighters. The renewal of the
City's statutory plan for approximately 359 sworn Police Officers and approximately 190 Firefighters includes a
reduction from the current paid amount of approximately 20% in the annual premium. Hartford Life has provided
the City of Miami Beach a three (3) year renewal rate of $38,232 payable in three (3) annual installments of
$12,744 compared to the current three (3) year rate of $47,955 paid out in three (3) annual installments of
$15,985. The renewal of the Hartford Accidental Death & Dismemberment Insurance policy will allow the City to
continue providing mandatory statutory AD&D coverage through September 30, 2012.
Board Recommendation:
Financial Information:
Source of Amount Account
Funds: 1 FY09/10
$8,332 Police Department 011.1120.000162
$4,412 Fire De artment 011.1210.00162
2 FY10/11
$8,332 Police Department 011.1120.000162
$4,4.12 Fire De artment 011.1210.00162
3 FY11/12
$8,332 Police Department 011.1120.000162
$4,412 Fire De artment 011.1210.00162
OBPI Total $38,232
Financial Impact Summary:
The proposed renewal submitted by the incumbent and recommended insurance carrier, Hartford Life and
Accident Insurance Company, is 20% lower than the current premium charged to the City for this statutory life
and accident coverage for Police Officers and Firefighters. This reduction in premium results in an annual
savings of approximately $3,241 for a total of approximately $10,000 for the entire three (3) year term of the
olic .
City Clerk's Office Legislative Tracking:
~ Sue Radig, Human Resources Administrator I
Sign-Offs:
Department Director Assistant City Manager City Manager
Ramiro Inguanzo,
Human Resources Director
m MIAMIBEACH ""'~o~,~'~
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m MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachH.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: July 15, 2009
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, AUTHORIZING THE CITY TO ENTER INTO AN AGREEMENT WITH
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY FOR A STATUTORY
ACCIDENTAL DEATH AND DISMEMBERMENT POLICY FOR POLICE AND
FIREFIGHTERS FOR A THREE YEAR PERIOD, FOR AN ANNUAL PREMIUM OF
$13,000 FOR EACH YEAR, PURSUANT TO THE REQUEST FOR PROPOSALS ISSUED
BY GALLAGHER BENEFITS SERVICES, THE CITY'S CONSULTANT OF RECORD.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
BACKGROUND/ANALYSIS
Florida Statutes Sections 112.19 and 112.191 require municipalities to provide at least $50,000 in
Accidental Death & Dismemberment Insurance (AD&D) to all law enforcement (police) officers and
firefighters.
The City's current statutory accidental death and dismemberment policy through Hartford Life and
Accident Insurance Company expires September 30, 2009. On May 8, 2009, Gallagher Benefits
Services (Gallagher) issued RFP No 10-2589 on behalf of the City. In response, bids were received
from the following two (2) vendors:
• Ace USA
• Hartford Life and Accident Insurance Company
Both policies provide the following state mandated benefits:
Benefit Hazard Benefit Amount
Accidental Death or
Dismemberment
While in the Line of Duty
$59,694.46
Accidental Death While in Fresh Pursuit $59,694.46
Accidental Death Unlawful & Intentional Death $179,083.29
Each respondent provided their "best and final" proposal with a three (3) year rate guarantee as
follows:
Insurance Company
Annual Premium Total Annual Savings Percent Savings
from Current
From Current Policy Polio
Ace USA $14,965 $1,020 6%
Hartford Life and Accident $12
744 $3
241 20%
Insurance Com an , ,
July 15, 2009 City Commission Meeting
Statutory Accidental Death and Dismemberment Policy
Page 2 of 2
Both proposals provide a reduction in cost from the current annual premium of $15,985 with the best
and final bid from Hartford Life and Accident Insurance Company, the incumbent carrier, providing the
City with an annual premium reduction of 20%, a $3,241 savings from the current policy.
After thoroughly evaluating the respondents, Gallagher Benefit Services recommends the renewal of
the City's Statutory Accidental Death and Dismemberment policy with Hartford Life and Accident
Insurance Company for a period of three (3) years (Attachment A) based on the following supporting
factors:
• Hartford Life and Accident Insurance Company offered the lowest premium cost, including a
20% reduction in the annual renewal premium
• Hartford Life and Accident Insurance Company provided the City with a three (3) year rate
guarantee
FISCAL IMPACT
The proposed renewal submitted by Hartford Life and Accident Insurance Company, the current
insurance carrier, is 20% lower than the premium currently charged to the Cityfor this state mandated
benefit for the City's approximate 359 sworn Police and 190 Firefighters. The current City premium is
$15,985 annually and the proposed annual premium is $12,700. This reduction in premium results in
an annual premium cost savings to the City of approximately $3,241 and a total cost savings for the
three (3) year term of the policy of approximately $10,000.
CONCLUSION
The Administration has reviewed the recommendation provided and based on the cost savings to the
City, recommends awarding the City's Statutory Accidental Death and Dismemberment policy to the
incumbent Hartford Life and Accident Insurance Company.
Attachment A
Gallagher Benefits Services
Letter of Recommendation
~t~ Gallagher Benefit Services, Inc.-- - --------------------
June 30, 2009 A Subsidiary of Arthur J. Gallagher & Co.
Ramiro Inguanzo, Human Resources Director
City of Miami Beach
1700 Convention Center Drive
Miami Beach, Florida 33139
Re: Employee Benefits Recommendations
Dear Mr. Inguanzo,
At the City of Miami Beach's request, we released Request for Proposals (RFP's) for all
City employee benefits including Medical, Dental, Life, Accidental Death and
Dismemberment, Voluntary and Dependent Life, Statutory Accidental Death and
Dismemberment, Employee Assistance Program, Vision, Short and Long Term
Disability. A vendor list has been provided illustrating what carriers were supplied the
RFP's and those that responded by product (See exhibit A). Recommendations will be
discussed briefly below.
Medical proposals were requested for claims administration and network access. We
requested both duplication of existing benefits and alternate benefit schedules. Responses
were received from the incumbent carrier Humana, AvMed, Cigna Healthcare, Aetna
United and Blue Cross & Blue Shield of Florida. We recommend renewal with Humana
based on the following:
1) Humana offered the lowest administrative fee's to the City including a reduction
of current costs
2) Retaining Humana will cause no disruption to member provider relations
3) Physician and hospital reimbursement analysis revealed Humana's strong South
Florida discounts
Life and Accidental Death and Dismemberment Request for Proposal resulted in thirteen
responses including the incumbent carrier, Standard. Short listing and continued
negotiations results in the recommendation of Hartford Life for the Basic Life and
AD&D, Dependent Life, Retiree Life and Voluntary Life. Reasons are as follows:
1) Lowest Basic Life, AD&D and Retiree cost to City and employees
2) Thirty six month rate guarantee
Statutory Accidental Death and Dismemberment Benefit Request for Proposal resulted in
two responses, the incumbent Hartford Life and Ace USA. We recommend renewal with
Hartford.
1) Hartford offered lowest cost including a 25% reduction in current annual
premium
2) No change to current benefits
3) Three year rate guarantee
One Boca Place
2255 Glades Road, Suite 400 E
Boca Raton, FL 33431
561.995.6706
Fax 561.995.6708
www.ajg.com
5 ~W~3~
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Currently Dental coverage (Indemnity/PPO and DMO) are purchased by the City on a
fully insured basis for the DMO and self insured for the Indemnity and PPO. In addition
to the incumbent response from Comp Benefits, eight addition proposals were received.
We recommend awarding MetLife the fully insured DMO plan and self funding the
Indemnity/PPO dental coverage. Factors supporting this recommendation are as follows:
DMO
1) MetLife offered lowest DMO cost (16% reduction annually) while
improving benefits to members
2) Large network of general dentists, Periodontists, Endodontic and
Orthodontists.
3) Two year rate guarantee.
Indemnity/PPO
1) Lowest annual administrative fee's
2) Improved benefits to participating members
3) Thirty six month rate guarantee
The Employee Assistance Program is currently provided by Ceridian. Six additional
proposals were received and reviewed for cost, benefits provided and Medical Plan
integration opportunities resulting from the recent Federal Benefits Law changes
impacting Mental Health Parity. Humana is the recommended vendor for the following
reasons:
1) Improved benefits via increased face to face visits
2) Low cost relative to benefits provided
3) Medical plan savings opportunity as a result of common vendor coordination
The Vision benefits Request for Proposal resulted in eight responses. Similar to the
Dental benefits, both fully insured and self insured proposals were received. We are again
recommending this benefit be self funded based on the low claims risk and trend
predictability. EyeMed is the recommended vendor based upon:
1) Lowest administrative services fee
2) Comprehensive exam and hardware benefits
3) Large tri-county provider network
Short and Long Term Disability Benefits RFP's responses were evaluated by vendors
offering both coverage's. For continuity of coverage and a seamless transition from short
term to long term disability, the objective is to provide continuity of coverage and a
seamless transition from short to long term disability with no disruption due to
differences in disability definition, medical evaluation and benefits offered. Unum is the
recommended carrier.
1) Minimal participation requirement and no termination feature
2) Low overall cost
3) Family Medical Leave Act administration for all employees
4) Twenty four month rate guarantee for Long Term Disability and FMLA
Administration
9 ~~
We appreciate the opportunity to work with the City and staff and would be happy to
answer any questions you may have.
Sincerely,
Richard G. Schell
Area Vice Preside