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2011-27632 Reso RESOLUTION No.1 2011 -27632 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF GALLAGHER BENEFIT SERVICES, INC., THE CITY'S CONSULTANT OF RECORD, PURSUANT TO THAT CERTAIN REQUEST FOR PROPOSALS ISSUED BY GALLAGHER ON BEHALF OF THE CITY FOR A VOLUNTARY BENEFITS PROGRAM FOR FULL -TIME AND PART -TIME EMPLOYEEES, AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND, IF SUCCESSFUL, EXECUTE AGREEMENTS FOR THE CITY'S VOLUNTARY BENEFITS PROGRAM WITH THE FOLLOWING COMPANIES; 1.) PREFERRED LEGAL AND U.S. LEGAL; FOR DISCOUNT LEGAL SERVICE PROGRAMS; 2.) TRUSTMARK, FOR ACCIDENT, CRITICAL ILLNESS AND UNIVERSAL LIFE PLANS; AND 3.) COLONIAL LIFE & ACCIDENT INSURANCE COMPANY, FOR A HOSPITAL INDEMNITY PLAN; FURTHER AUTHORIZING THE ADMINISTRATION TO WORK DIRECTLY WITH THE SELECTED INDIVIDUAL PLAN CARRIERS TO SELECT ONE (1) ENROLLMENT FIRM TO PROVIDE ANNUAL ENROLLMENT SUPPORT AND BENEFIT MATERIALS FOR ALL OF THE CITY'S BENEFIT PROGRAMS, AT NO COST TO THE CITY; AND FURTHER REFERRING THE DISCUSSION OF A POTENTIAL NEW VOLUNTARY BENEFIT OFFERING FOR ACTIVE CITY' EMPLOYEES; PROVIDING FOR AN UNSECURED LOAN PROGRAM REPAID THROUGH PAYROLL DEDUCTIONS,. TO THE CITY'S FINANCE AND CITYWIDE PROJECTS COMMITTEE. WHEREAS, the City currently provides its full -time employees access to a voluntary benefits program administered by a broker, Comprehensive Companies, which has been providing these benefits since 1991; and WHEREAS, these options are provided at no cost to the City and are fully- funded by employee contributions; and WHEREAS, the employees are provided voluntary benefit options which include universal life, disability, critical life insurance, a cancer .policy, and discount legal services; and WHEREAS, at the direction of the City Administration, the City's Consultant, Gallagher Benefits Services, Inc. (Gallagher), issued a Request for Proposals (RFP) for a voluntary benefits program for both the City's full -time and part -time employees, including a request for enrollment support to be provided by one (1) independent enrollment firm selected among the carrier(s), at no cost to the City; and WHEREAS, as a result of the RFP,.the City received responses from eight (8) individual voluntary benefit plan carriers, and two (2) brokers (the brokers submitted a joint response); and WHEREAS, the proposed voluntary benefits plans included discount legal services, accident and critical illness plans, a hospital indemnity plan, and universal life plans; and: WHEREAS, as the proposals submitted for critical illness coverage include coverage for cancer, Gallagher recommended the City not provide duplicate coverage for just one (1) condition, resulting in the elimination of an offering of an individual cancer policy; and WH'E'REAS, based on the proposals received pursuant to the RFP, Gallagher recommends that the City enter into agreements for a voluntary benefits program, fully- funded by employee contributions with the following firms: 1.) Preferred Legal Plan and U.S. Legal (the ,2 3, incumbent), for a choice of discount iegal.plans; 2.) Trustmark, for Accident, Critical Illness and Universal Life Plans; and 3.) Colonial Life & Accident Insurance Company (through brokers Citrin Financial and Pearl Benefit Group), for a Hospital Indemnity Plan; and WHEREAS, the Administration has reviewed the recommendations made by Gallagher and recommends accepting its recommendations; and - WHEREAS, the Administration will also work directly with the selected individual plan carriers to select one (1) enrollment firm to provide annual enrollment support and customized, printed benefit communication materials for all of the City's benefit programs, at no cost to the City; and- WHEREAS, the Administration has also been made aware of a new additional voluntary benefit, providing for an unsecured loan program for active employees repaid through payroll deductions and would recommend that this be referred to the City's Finance and Citywide Projects Committee for further discussion. 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 accept the recommendation of Gallagher Benefit Services, Inc., the City's Consultant of Record, pursuant to that certain request for proposals issued by Gallagher on behalf of the City for a voluntary benefits program for full -time and part -time employees, and authorizes the City Manager to negotiate and, if successful, execute agreements for the City's voluntary benefits program with the following companies; 1.) Preferred Legal and U.S. Legal, for discount legal service programs; 2.) Trustmark, for Accident, Critical Illness and Universal Life Plans; and 3.) Colonial Life & Accident Insurance Company for a Hospital Indemnity Plan; further authorizing the Administration to work directly with the selected individual plan carriers to select one (1) enrollment firm to provide annual enrollment support and benefit materials for all of the City's benefit programs, at no cost to the City; and further referring the discussion of a potential new voluntary benefit offering for active City employees, providing for an unsecured loan program repaid through payroll deductions, to the City's Finance and Citywide Projects Committee. PASSED and ADOPTED this 134 day of r, , 2011. m OR Mattie Herrera Bower ATTEST: APPROVED AS TO 'CITY CLERK FORM & LANGUAGE i Robert Parcher & FOR EXECUTION ity Attorney tt-- Date -Jose Smith i ` COMMISSION ITEM SUMMARY Condensed Title: A Resolution authorizing the City to enter into agreements for the City's voluntary benefits program pursuant to the RFP issued by Gallagher Benefit Services, the City's consultant of record, and referring the discussion of a possible new voluntary benefit to be offered to employees to the Finance and Citywide. Projects Committee. Key Intended Outcome Supported: Control costs of payroll .including salary and fringe benefits 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: Should the City enter into individual agreements to provide employee fully funded voluntary benefit programs with Preferred r x Legal Plan and U.S. Legal, Trustmark and Colonia Life & Accident (through brokers Citrin Financial and Pearl Benefit Group) and work with voluntary benefit carriers to select one (1) independent enrollment firm to provide annual enrollment support and customized printed enrollment communication materials, all at no cost to the City as all the voluntary benefit programs are fully funded by employees. - In addition, referring the discussion of a possible new voluntary benefit to be offered to employees to the Finance and Ci ide Projects Committee. Item Summa /Recommendation: The City currently provides employees access to a voluntary benefit program administered by a broker (Comprehensive Companies), who has been providing these benefits since 1991. At the City's direction, Gallagher Benefits Services issued RFP No. 11 -003 which included a request for enrollment support to be provided by an independent enrollment firm at no cost to the City. The RFP was sent to individual voluntary benefit carriers and benefit brokers as the Administration wanted to consider all options available. The City received responses from eight (8) individual voluntary plan providers and two (2) brokers, (the brokers submitted a joint response). As a result of this RFP, Gallagher Benefits Services recommended the City enter into agreements for a voluntary benefit program, fully funded by employee contributions, with Preferred Legal Plan and U.S. Legal for a discount legal plan; Trustmark for. accident, critical illness and universal life plans; and Colonial Life & Accident Insurance Company (through Citrin Financial and. Pearl Benefit Group) for a hospital indemnity plan; with the Administration working directly with the selected vendors to provide annual enrollment support and customized, printed benefit communication materials for all of the City's benefit programs at no cost to the City. In addition, ;referring the discussion of a possible new voluntary benefit to be offered to employees to the Finance and Citywide Projects Committee for review and discussion. Advisory Board Recommendation: N/A Financial Information: Source of Amount . Account Funds: 1 N/A 2, 3 OBPI Total Financial Impact Summary: No Fiscal Impact. The voluntary benefit programs are fully funded through employee contributions. City Clerk's Office Legislative Trackin Sue Radig, Human Resources Benefits Administrator I Sign-Offs: Dep ent Director Ass nt City Manager City Manager. AGENDA, ITEM C7'& W.JhdM I/ ' DATE M] AM IB EAC H ; City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Mayor Matti Herrera Bower and Members of the City Commission FROM: Jorge M. Gonzalez, City Manager DATE: April 13, 2011 SUBJECT. A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE CITY ADMINISTRATION TO ENTER INTO AGREEMENTS FOR THE CITY'S VOLUNTARY BENEFITS PROGRAM PURSUANT TO THE REQUEST FOR PROPOSALS ISSUED BY GALLAGHER BENEFIT SERVICES, , INC., THE CITY'S CONSULTANT OF RECORD, AND REFERRING THE DISCUSSION OF A NEW VOLUNTARY BENEFIT TO THE FINANCE AND CITYWIDE PROJECTS COMMITTEE. ADMINISTRATION RECOMMENDATION Adopt the Resolution and refer the discussion of a new voluntary benefit to the finance and Citywide Projects Committee. BACKGROUND The City currently provides employees access to a voluntary benefit program. These voluntary benefits include: universal life insurance, disability income insurance, critical life insurance, lump sum cancer insurance and a legal services plan. As these voluntary benefits are fully- funded b employee contributions, the City does not incur any costs related to these plans. The voluntary benefit plan is "administered by a broker, Comprehensive Companies, who has been providing these services to the City since 1991.. The City provides the broker with the pertinent employee information to facilitate the enrollment, processes the employee deductions, provides monthly premium payment and billing audits for the carrier, processes the employee's requests to terminate coverage and facilitates problem resolution between the employee and the plan through the broker. These voluntary benefits are currently only available to all full -time employees working at least thirty (30) hours a week. In order to provide employees with the most current voluntary benefit programs and to review all options available, the Administration worked with Gallagher Benefits Services (Gallagher), the City's consultant of record, to issue their Request for Proposals (RFP) No. 10 -2591 on May 8, 2009. In addition, since the City changed from fully- insured to self- insured medical and dental plans on January 1, 2009, and the agreements for both the medical and dental plans were to expire on December 31, 2009, Gallagher also issued their.:Group Employee Benefits RFP No.10 -2589 'at the same time for the City's self- funded medical and dental plans and its fully -. insured life insurance plan. These Voluntary Benefits and the Group Employee Benefits RFPs provided the Administration the opportunity to review all of the benefit options available for all the plan offerings and determine the plans that provided the best coverage at the lowest or most competitive premium rates. April 13, 2011 City Commission Meeting Selection of Voluntary Benefits Program Page 2 of 10 The Administration presented certain recommendations on voluntary benefits in the past. Given the questions raised and the fact that the City was converting its carriers and plan options for the City .'s - medical, dental and life insurance plans, it was necessary to require, all benefit eligible employees and retirees to complete the appropriate enrollment forms for the plan year that would begin on January 1, .2010 during the annual, open enrollment that began in early .November 2009. In order to prepare for the annual open enrollment and include all ,relevant information, it was impractical and untimely to make similar changes -to the voluntary benefits program at. that time. As such, the City remained with the current voluntary benefits program given that there would not be sufficient time to select the possible new providers before the open enrollment period for the 2010 plan year. Given that the voluntary benefits RFP responses were outdated after the 2010- plan year began, Gallagher reissued a. new RFP (No. 11 -003) on June 23, 2010 for the City's voluntary benefit program.. This RFP was issued due to the possibility that premiums or.the plan benefits had changed. Regardless of any changes that may occur with the current voluntary benefits, employees with coverage in, one or more of Ahe voluntary benefit plans options currently provided . by Comprehensive Companies may continue their coverage under that plan. In .,addition, these employees will be provided the o ortunit to elect additional voluntary benefit programs. from p pP Y rY P 9 the -new carriers and /or brokers. 'Their coverage under the current voluntary benefit plans provided .by Comprehensive Companies will, continue until such time the employee. notifies the Human Resources Department of their intent to .cancel their coverage. ANALYSIS As referenced before, the Administration's decision to .request an RFP. for its voluntary benefits program _was facilitated by-the changes in the City's core group health benefit plans that include health, dental, vision, life and - the new short -term disability, - long-term, disability, employee supplemental and dependent -life insurance plans, all of which became effective with the plan. year that began January 1, 2010. In addition, the Administration was looking at ways to provide its part -time work affordable healthcare options. The current process with Comprehensive Companies does not provide the.City with the ability to enroll an employee, determine .plan. costs, or explain the coverage with the employee as this information is not provided to the City. The City provides .a monthly file to the broker indicating eligibility information of all . newly: hired employees, those newly eligible and those employees requesting coverage information or changes to their current` coverage. Enrollment is conducted on a- time schedule determined by :the broker. -Plan offerings are determined by the broker and - presented to the City for approval. Information regarding new Ian offerings or enhancements .. pr Y Pp 9 9 P 9 -'to current plan offers from. the voluntary benefits carriers utilized by the broker is not shared with the City: Should the City discover a discrepancy in the billing or plan coverage, the broker must be contacted to resolve the issue -with the plan. - This .requires the City to explain" the issue to the broker, or the broker's representative, who in turn will, contact the plan representative, to relay the issue ao the plan for resolution. This resolution is then shared with the broker, or broker representative, who then 'shares. the information with .the City. In, some cases, .the City has had issues that take weeks to resolve and may impact an employee's, pay, should - a contribution amount be .incorrect.. In addition, should the City receive numerous employee: complaints that remain unresolved, the City has no . recourse with, the plan. The extra " layer of plan management by a broker provides no real value to the employees or the City. ; April. 13, 2011 City Commission. Meeting Selection of Voluntary Benefits Program Page 3 of 10 Additionally,, the broker is provided a commission by the individual voluntary benefit plan carriers to sell their plans to the City employees. The City does not have any.input as to the voluntary benefit plan carrier, the benefit provided by the plan or the cost of the plan. In addition the City receives no remuneration for providing access to City employees during business hours, or the City's collection of the premium contributions from the employee's payroll check and the monthly payment to the voluntary benefit plan carriers for the employee premiums collected. An option in lieu of having a broker provide these voluntary benefit plans is to have direct agreements with the voluntary benefit carriers themselves, which, when : possible, is the recommendation being made by Gallagher. Direct agreements with the various voluntary benefit carriers would provide City employees with the opportunity to consider,all the benefits available to them during their initial enrollment period, during the plan year should a lifestyle change occur and 'at annual enrollment. As an added benefit in having direct agreements with the various voluntary benefit carriers, the City will no longer need to share the employee's personal information, such as social security numbers, salary, and birthdates with a third party, 'as information will be sent through secure processes directly to the carrier. In addition, direct agreements afford the City a notice by the carriers of any plan enhancements or new plans complementing its existing offerings; direct :contact with the plan's billing : representative should there be an issue with the billing process, and contact with plan representatives addressing. discrepancies in coverage or issues with employee claims. This direct contact eliminates an additional layer of plan management through a broker, providing timely, accurate resolutions of discrepancies and employee issues. Also, should the plan not provide the services indicated in their agreement with the City, the City can terminate the agreement at anytime, which is not the case if a broker is involved.. Included in the RFP was a request indicating that the proposed. premiums should exclude all commission fees as the City nor .Gallagher can accept commission payments from the .carrier for any employee enrollment. Gallagher received eight (8) responses to the voluntary 'benefits :RFP. These responses included eight (8) individual carriers and two (2) insurance brokers, - Citrin Financial and Pearl Benefit Group, who collaborated and submitted one joint proposal. The, incumbent broker, Comprehensive Companies, did not submit a response. Attachment A includes A copy of the letter submitted by Gallagher listing their recommendations. The voluntary benefit plans being .considered are all fully - insured and, as required by the state, are filed with the Florida Insurance Commission. When a benefit plan is filed for approval by the Florida Insurance Commission by an , insurance carrier, the filing must include detailed information regarding the benefit coverage the- plan will provide, cost of providing the indicated coverage, any commission fees to be paid to a broker or ,consultant and the premium cost. Once a plan is approved by the Insurance Commission, the carrier cannot make any changes to _the coverage, commission fees or premiums without filing the change with the Insurance Commission for their review and subsequent approval or denial. All of the voluntary benefit carriers responding to Gallagher's RFP are for fully- insured plans filed in the state of Florida and therefore,. the premiums associated with each plan include commission fees. These commission fees which are. included in the premium costs proposed cannot be removed. Given that the City nor Gallagher can accept these commission payments, Gallagher has recommended that the City consider utilizing these commission payments to help offset the cost of the City's management of the plan, including their enrollment, communication to employees, payroll processing, premium billing and the 'payment of the. premiums collected from the employees payroll check to the individual plans. April 13, 2011 City Commission Meeting Selection of voluntary Benefits Program Page 4 of 10 The chart below provides a summary of the. types of voluntary benefit plans and the carriers or brokers who responded to Gallagher's voluntary benefit RFP: Plan Individual Carrier Broker (Citrin Financial and Pearl Benefit Grou Discount Legal + ARAG • Fringe Benefit Management (FBMC) • Hyatt Legal Plan No proposal submitted • Preferred Legal Plan • U.S. Legal Services incumbent Accident Plan • fringe Benefit Management (FBMC) • Colonial Life & Accident Insurance • Humana Company Trustmark • Unum 1 Critical Illness • Fringe Benefit Management (FBMC) • Colonial Life & ,Accident Insurance • Humana Company . • Trustmark • Unum Hospital • Colonial Life & Accident Insurance Indemnity No proposal submitted Corn pany Universal Life • Fringe Benefit Management (FBMC) • Colonial Life &' Accident Insurance • Humana Company • Trustmark Unum The respondents' were asked to provide proposals for the City's voluntary benefits plan, available to full -time and part-time employees, that would include accident .insurance, critical illness. insurance, cancer insurance, universal life and discount legal services. In. addition, a new offering of a hospital indemnity plan was .included. As the proposals for critical illness coverage include coverage for cancer, Gallagher recommended the City not provide duplicate coverage for just one (1).condition, eliminating a current offering of a cancer policy to the City's employees. However, the employees currently enrolled in the current cancer policy - may continue their coverage until such time as they notify the Human Resources Department, in writing, of their intent to terminate the coverage. The following are summaries. of each of the voluntary benefits. along with Gallagher's recommendation: . Legal Services Group legal plans provide employees with access to discounted personal legal services, including, but not limited to, divorce, traffic tickets, real estate, wills, bankruptcy, unlimited free legal advice by telephone, free review of legal documents and free face -to -face initial consultations with attorneys, who will answer both general and specific questions regarding all legal issues. The plan comparison below identifies the legal service proposals received and Gallagher's recommendation: April 13, 2011 City Commission Meeting Selection of Voluntary Benefits Program Page 5 of 10 L egal Pl Cov Com Highlighted plans `are those recommended. by Gallagher ARAG and Hyatt Legal Plans U.S. Legal Services Preferred Legal fBMC (incumbent) Plan • 24 hours a day • 24 hours a day • 'Monday- Friday 24 hours a day Customer • 7 days a week • 7 days a week 4�9 00am to, 5 •'' 7 days a week . Service . s a y ear • 365 days a y ear 365"A, Y Y Y Y ys: 365 days a . year , Pre- existing • Covered at • Covered unless an Covered unless an Matters reduced rates attorney has been • Not Covered attorney has been retained retained < r a Waiting - for some,services None . Period i.e .Divorce, • Links to reports Full credit review Credit Report Analysis • Included plan attorneys can • Not covered and at no review and advise Identity Theft Services • Covered • Covered Not covered; Covered -Plan]imits.and Coverage exclusions apply; .w Limits • None • None i.e Family, law : None ,limited to-12 hours, ,- per year •Attorney-operated •Attorney-operated �.Mernber must Attorney- operated home office home office � -' contact h6 "me office administers administers provider (attorney) administers unlimited advice, unlimited advice, � for all services. U'nlimited.advice, Use of document review, document review, Assigned provider document. review, Services correspondences, correspondences, (attorney) provides co rrespon'dences, legal forms, legal forms, all services, under legal forms, consultation and consultation and the plan consultation and guidance through guidance through guidance through, entire legal process entire legal process entire legal process Employee • Any time through • Any time through • Any time through. •Any time through . Cancellation employer employer employer n. employer, Enrollment • ARAG - No No No Not indicated Assistance • FBMC — Yes Provided _ Monthly • Employee $17.95 • Employee $18.00 Employee $17.60 ''.Employee $9:95 Premium Family $17.95 . Family $18.00 •` Farnily$19.76�� Farni,ly`$9.95' No disruption to 4 Cost -savings.to Gallagher's Recornmeridation and Justification: currently enrolled em °ployees �- .- Enhanced , services employees . r ; *The ARAG plan was proposed both individually and through FBMC. As both proposals provided identical' benefits and premium- costs, they are represented in the same column in this comparison. April 13, 2011 City Commission Meeting Selection of Voluntary Benefits Program Page . 6 of 10 Accident Insurance Accident Insurance provides benefits in the event of covered injuries that occur either at work or outside the work place. Benefits are paid directly to the participant to help offset their unexpected medical costs and lost wages. The plan also includes a daily benefit for hospitalization because of illness. The plan is portable, meaning the employee may continue coverage after leaving the City by paying their premiums directly to the carrier. The following identifies the proposals for an accident insurance policy that were received and Gallagher's recommendation: Accid Ins urance C C Hi hlighted plan is that - recommended.'b Gallagher, Colonial Life FBMC Humana Unum Trustmark (Citrin Financial (Benefit through (Benefit through and Pearl Allstate) Unum) Grou Hospital • $150 per • $200 per • $200 per day, • $200 per ° •.$400 per day, ` .. Confinement day, max day, max max 90 days day, .max 90 ' ma 365 days 365 days 90 days each accident days each 'each -accident,:' each each accident accident accident Intensive Care • $300 per • $400 per • $800 per day, • $800 per $80'0 per Confinement day max 15 day, max max 15 days day, max 15 day max 15 : days 90 days each accident days each w days each each accident accident accident Emergency Room • $200 each • Not • $150 each • $150 each $150 each accident indicated accident accident accident Physical Therapy • $50 per visit • Not $50 per visit • $50 per visit • '$50 per visit max 6 visits indicated max 6 visits max 6 visits max 6 .visits ., Ambulance $500 per trip • $200 per $200 per trip $200 per trip $300 per trip ",,• tri Wellness • None • None None None $50 per visit ':1,.`; _max 2 visitsw -% per: year Accidental • $750 to • $120 to • Up to $40,000 • U to Up $1.;500 to a Dismemberment $15,000 $60,000 dependent on $40,000 $30,000` Loss of finger, toe, dependent dependent loss dependent on , .deoendE,nt,on,u hand, foot sight on loss on loss loss loss Accidental Death Employee • $75,000 • $40,000 • $75,000 • $75,000 • .$75;000 Spouse • $75,000 • $20,000 • $40,000 • $40,000 • „000. Child(ren) • $15,000 • $10,000 $10,000 $10,000 $20 Participation None • 51 enrolled 10 enrolled • 10 enrolled 20 , enrolled Requirement employees employees employees emplo ees Enrollment • Yes • Yes, through • Yes Yes o Yes Assistance FBMC Monthly Premium Employee $18.00 • $14.52 $16.38 • $16.38 •.:$16.38, Family • $36.00 $36.96 • $38.22 • $38.22 $52.87 Co Galla' her's Recommendation an m .; d Justification: prehensive benefit sch edule r. 9. � . • ` Provides a wellness °benefit;.. , . April 13, 2011 City Commission Meeting Selection of Voluntary Benefits Program Page 7 of 10 Critical Illness Critical Illness coverage offers financial assistance in the event of a serious illness, such as a heart attack or stroke. The plan also includes coverage for cancer. Benefits are paid directly to the participant to help offset the unexpected medical costs and lost wages. The :plan is' portable, meaning the employee may continue coverage after leaving the City by paying their premiums directly to the carrier. The following identifies the proposals for a critical illness policy that were received and Gallagher's recommendation: Critica Illness Covera C omparison Hi hli hted plan is that recommended by Galla her Colonial Life FBMC Humana Unum , Trustmark Citrin Financial (Benefit through (Benefit through and Pearl Grou Allstate) Unum None .. None 'Pre-existing * Proof of • 12 months • 12 months • 12 months :.Proof of insurability Exclusion insurability required required Waiting . 30 days • 30 days • 30 days • 30 days 30.,days Period Maximum Benefit ' $10,000 $10,000 • $100,00.0 • $50,000 $50,000 • Heart Attack Heart Attack Cancer • 'Cancer . • . C r-. anger • Bypass Stroke • . Heart Attack , . • Heart Attack • Heart Attack • Stroke Renal Failure Stroke Stroke • ;:Stroke • -Coma Major Organ • Renal Failure • Coma `.Renal Failure Covered . Renal Failure Transplant Major Organ Renal Failure Major. Organ Conditions Major Organ Paralysis Transplant Major Organ Transplant Transplant • Alzheimer's • Paralysis (2 or Transplant, �; Paralysis (2 ors more limbs) • Paralysis (2 or rriore,limbs) • Blindness more limbs) 3 Blindness'` . ALS .. ALS • HIV ; IV Premium • Employee (age Employee (age • Employee( age • Employee (age { age banded 49, rates from 49, rates from 49, rates from 49, rates from Employee:,(age 49,;<<. rates-from' $7.4,1 tobacco /non $18.50 to $18.70 to $12.92 to $12.92 to to , tobacco user $34.90 ) $49.92 ) $14.22 $14.22 $26.00) _:Participation • 50 employees • 51 employees • 10 employees • 25 employees • 1.0 employees Requirement Enrollment , Yes • Yes • Yes • Yes ,•: Yes Assistance Gallagher's Recommendation and Justification coverage . Lowest premium­­.`:. April 13, 2011 City Commission Meeting Selection of Voluntary Benefits Program Page 8 of 10 i Universal Life - Universal � Life coverage offers - flexible. -premiums and the ab,ility to increase or decrease the benefit as needs change. The level of coverage is selected by the employee.. In addition, the policy earns cash value that may be withdrawn. at a future date. The premium cost is based on the amount of coverage elected The plan is portable, meaning the :employee may continue coverage after, leaving the City by paying their premiums directly to the carrier. The following identifies - the , proposals for a, universal 'life policy that were received and Gallagher's recommendation: ' Un iversal Life C ;Highlighted planAs. at `recommende e b: Gallagher Colonial Life Humana FBMC Unum Trti, a'rk (Citrin Financial' . (Benefit through (Benefit through Allstate and Pearl Group) Unum ) Guaranteed - Issue - Amount 'Up to • Up to • Up to Up to U0�to (Maximum- benefit $100,000 $200,000 $100,000 $200,000 $200" available without proof of good health Future Benefit • At ages 18, • Not • Allowed . • Allowed Allowed Increases 21, and 24 indicated ' e ' f • After 24 Infant coverage Yes ` • No • No t : Yes hours Longterm Care Not Not • No • . Not available Yes Y;r Included Available Available • 75% of , 100% of • 75% of • 100 %. of _ v 75% of rn benefit benefit benefit benefit benefit`" -.Accelerated Death Life Life • Life • . Life .,Life Benefit expectancy expectancy expectancy expectancy expectancy less than 24 less than 1.2. less than 24 less than 12 - lesss than : 24 �, ". months months months months_ months ;T -. Participation Not indicated • 10 employees • Not indicated • 10 employees • No _ Requirement • • Based on the amount of coverage elected Premium Tobacco and non- tobacco user • Employee age Enrollment Assistance • Yes Yes • Yes • Yes Yes- Provided •, . aAffordable= Long -Term Care. Gall,a her's Recommendation and Justification ` . 9 E W _ Rrderr "available. , . 5 . Competitive premium April 13, 2011 City Commission Meeting Selection of Voluntary Benefits Program Page 9 of 10 Hospital Indemnity Hospital Indemnity coverage offers financial assistance in the event of a -hospital ization to help pay for plan deductibles, co- payment and co- insurance, as well as everyday living expenses. Benefits are paid directly to the participant to help offset the unexpected medical costs and lost wages. The plan is� portable, meaning the employee may continue coverage after leaving the City by paying their premiums directly to the carrier. The only proposal received was from Colonial Life & Accident (submitted on behalf of Citrin Financial and Pearl Benefit Group jointly). Gallagher has recommended the City provide this benefit due to the availability of customized plans, premiums that do. not increase with the employee's age and the financial assistance provided 'in the event of a hospitalization. Therefore, Colonial Life & Accident Insurance Company is the recommended carrier. Enrollment Services As was previously stated, the voluntary benefit plans being considered are all fully - insured and are filed with the Florida Insurance Commission. These filings have . broker commissions included in the premium costs. As Gallagher cannot accept these commission payments, it was suggested that the City consider utilizing these payments, which would otherwise remain with the carrier if not paid to Gallagher; to offset the cost of benefit enrollment through an independent enrollment service. The individual insurance carriers and brokers all responded positively to providing independent enrollment services though. an independent enrollment firm. These enrollment firms have working relationships with all voluntary plans as well as with the City's core group health plans (medical, dental, vision, disability and life plans). The use of an independent enrollment firm reduces the financial impact to the City of the open enrollment for employees and. retirees, deferring the cost of all printed enrollment materials from the City to the enrollment firm as well as alleviating. City staff time, thus saving the City additional dollars and staff resources that would have had to be allocated for this effort. The enrollment firm could provide the City employees and . retirees a comprehensive, customized, multi -page plan brochure explaining all the benefit plans available to them. In addition, employees would have an opportunity for either face -to -face or telephone enrollments with a non -City employee enrollment -representative who would be knowledgeable in the City's health, dental, life, disability and voluntary benefit plans. The Administration considers this to be beneficial to the City as it 'provides an additional resource in addition to the City's ' Human Resources staff for employees and retirees regarding the core and voluntary - benefit plans provided to them by the City. During the City's annual enrollment process, the enrollment firm would do the following: • Provide written enrollment communication; • Make available benefit enrollers who are fluent in Spanish and Creole; • Gather missing. dependent information, including social security numbers, for all dependents, a federal requirement for all group health plans; and • Verify dependent eligibility based on criteria required by the City to guarantee that coverage is being provided to the employees' true dependents as defined by the City's eligibility guidelines, April 13, 2011 City Commission Meeting . Selection of Voluntary Benefits Program Page 10 of 10 City staff will continue to provide day -to -day enrollment support to employees and retirees, with the enrollment firm providing complimentary support during the annual enrollment period. Given that the voluntary benefit carriers can make these enrollment services available, the Administration would work directly with the selected voluntary benefit plan carriers to select one .(1) enrollment firm to provide enrollment support for the core group health plans and the voluntary options available to employees and retirees. The services of this one (1) enrollment firm would be contracted by the voluntary benefit plan carrier(s) at no cost to the City. CONCLUSION The Administration has reviewed the recommendations of Gallagher Benefits Services and, recommends awarding the administration of the City's employee funded voluntary benefit programs as follows: • Legal Plan(s) — (1) Preferred Legal Plans and (2) U.S. Legal Plan (provides employees with a choice between these two (2) legal plans) • Universal Life, Critical Illness and Accident Plans - Trustmark • Hospital Indemnity Plan - .Colonial Life & Accident Company (Citrin Financial and Pearl Benefits Group as joint brokers) The City's Human Resources Department continuously explores other voluntary benefits to offer employees and retirees (fully funded by those who chose to participate). One voluntary benefit that the City has recently been made aware (after the voluntary benefits RFP was issued) is a . voluntary loan program which offers active employees an unsecured micro financed loan ranging anywhere from $500 to $5,000 with fixed payments capped at twenty percent (20 %) of' the employees net take home pay, repaid through payroll deductions with repayment terms up to two (2) years. As this voluntary benefit is one that some active employees may be interested in, it is recommended that this item be referred to the City Commission Finance and Citywide Projects Committee for discussion. As other options become available; the possible inclusion of those other offerings in the City's voluntary benefit program will also. be referred to the City Commission for discussion. Attachment ATTACHMENT A GALLAGHER BENEFIT SERVICES RECOMMENDATION i .lepp ` C,a )Iaghei - benefit Services, Irlc: A �uhsidiaiy of Arthur 1. Gallagher & Co. April 1, 2011 -- p Mr. Ramiro Inguanzo, Director of Human Resources City of Miami Beach 1700 Convention Center Drive s Miami Beach, Florida 33139 1 Re: Worksite Benefits Request for Proposals and Analysis S Dear Ramiro, On behalf - of the City of Miarni Beach, Arthur J. Gallagher & Co. prepared a request for proposal for . i worksite benefits (voluntary) insurance programs. The objective was to seek out payroll deduction benefits providing the employees and their dependents with comprehensive, low cost, affordable_ plans I fully paid by the *employees through payroll deduction. In addition, this request for proposal specified any commission payments made available through these products would be utilized to offset all costs associated with providing the employees with one -on -one meetings to explain the benefits and features of all programs offered by the City including the core benefits such as medical, dental, disability and life, benefits in addition. to the voluntary benefit programs; Universal life, Critical illness insurance, Accident Insurance and legal. services. After reviewing the financial analysis and benefit comparisons,, we recommend the following vendors by I product line, the Cancer Benefit has been eliminated because it is included in the Critical Illness Benefit: • Universal Life -- Trustmark Competitive Rate Structure Coverage is portable - Value Added, Affordable Long Term Care Rider - Lowest cost Critical Illness — Trustmark I - No benefit reduction due to age I i - Increase coverage regardless -of health in first 5 years - Cancer benefit included Lowest cost I , f • Accident Insurance— Trustmark - Comprehensive' Benefits Schedule 24 hour coverage - Competitive rates _ One Boca Place 2255 Glades Road, Suite; 400E I Bona Raton, FL 33431 561.995.6706 Fax 561.995.6708 Www.aig.corn © Hospital Indemnity — Colonial Customized Plans Rates do not increase with age. - Competitive Rates z ®° Pre -Paid Legal - U.S. legal Services and Preferred legal Plan - P,rovide employees with plan choice - Allows for current professiona[relationships to be maintained while allowing employee benefit and premium choice i In addition to the above, we recommend the City work directly with the selected vendors to administer the enrollment of the City's Worksite (voluntary) Benefits. This will.aiiowthe City to maximize funds available via commissions I available through these products to offset any and all.costs associated with one -on -one employee meetings and the electronic data enrollment necessary to track employee elections for payroll deduction purposes. This applies to the 2011 plan year and subsequent open enrollments.. i Should you have any questions, please feel free to contact me at 561- 998 =6733. Again, we appreciate the opportunity to work with you and the city of Miami - Beach. Regards, 1 f , Richard G. Schell Area Vice Presiq nt 66 t f t