2016-29461 Reso RESOLUTION NO. 2016-29461
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
CITY MANAGER PERTAINING TO THE RANKING OF FIRMS, PURSUANT TO
THE REQUEST FOR PROPOSALS (RFP) NO. 2016-086-WG FOR HEALTH
PLAN SERVICES AND BENEFITS FOR THE CITY OF MIAMI BEACH ACTIVE
EMPLOYEES, DEPENDENTS, PRE-65 RETIREES, AND POST-65 RETIREES;
AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE
FOLLOWING PROPOSERS IN THE FOLLOWING CATEGORIES OF HEALTH
PLAN SERVICES: CIGNA HEALTH AND LIFE INSURANCE CO., AS TOP-
RANKED PROPOSER FOR THE MEDICAL ADMINISTRATIVE SERVICE
ONLY AND PHARMACY SERVICES; SYMETRA LIFE INSURANCE CO., AS
TOP-RANKED PROPOSER FOR THE REINSURANCE/STOP LOSS
SERVICES; AND CIGNA HEALTH AND LIFE INSURANCE CO., AS SECOND-
RANKED PROPOSER FOR THE EMPLOYEE ASSISTANCE PROGRAM; AND
FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE
AGREEMENTS UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS
WITH THE ADMINISTRATION.
WHEREAS, Request for Proposals ("RFP") No. 2016-086-WG was released on March
11, 2016; and
WHEREAS, the City of Miami Beach (the "City") received complete and responsive
proposals from Aetna Life Insurance Company, AvMed, Inc., Cigna Health and Life Insurance
Co., Concordia Behavioral Health, Deer Oaks EAP, LLC, EnvisionRx, Inc., Humana Insurance
Company, Symetra Life Insurance Company, and UMR, Inc. (a United Healthcare Company)
(the "Proposers"); and
WHEREAS, the proposal from Valery Insurance Agency, Inc. was considered non-
responsive due to their failure to meet the minimum requirements established in the RFP; and
WHEREAS, on April 8, 2016, the City Manager, via Letter to Commission, appointed an
Evaluation Committee (the "Committee") consisting of the following individuals:
• Sonia Bridges, Division Director Risk & Benefits, Human Resources Department
• Dwayne Drury, Assistant Fire Chief, Fire Department
• Lauren Wynn, Senior Management & Budget Analyst, Office of Budget and
Performance Improvement
• Karen Rivo, Registered Nurse, Health Advisory Committee Member
• Robert Parr, Chief of Compensation and Benefits, City of Jacksonville
The following alternates were also appointed:
• Rafael Granado, City Clerk, Office of the Clerk;
• Jose Del Risco, Human Resources Assistant Director, Human Resources
Department;
• Natasha Diaz-Rojas, Senior Management & Budget Analyst, Office of Budget
and Performance Improvement; and
WHEREAS, the Committee composed of Sonia Bridges, Dwayne Drury, Lauren Wynn
and Rafael Granado, convened on May 23, 2016, to consider all responsive proposals; and
WHEREAS, the Committee was provided with information relative to the City's Cone of
Silence Ordinance and the Government Sunshine Law, advance information on the scope of
services, references, and a copy of the RFP and proposals submitted by each responsive
Proposer; and
WHEREAS, the Proposers were reminded of the City procurement requirements and
that supplementation, including the addition, altering, or deletion of anything material in nature
from their written proposals, during their interview phase with the Committee, would not be
allowed; and
WHEREAS, the Committee was advised as to the City procurement requirements and
advised to score and rank the proposals pursuant to the qualitative evaluation criteria (Scope of
Services Proposed and Approach and Methodology) established in the RFP; and
WHEREAS, the quantitative scoring of the Proposers' financial responses (Experience
and Qualifications, including Financial Capability) was completed by the Procurement
Department; and
WHEREAS, based upon the Evaluation Committee process, including the quantitative
scoring of the financial responses, the Proposers were ranked as follows:
• Medical Administrative Services Only ("ASO") - Cigna Health and Life Insurance Co.,
as the top ranked proposer, Aetna Life Insurance Co., as the second highest ranked
proposer, and UMR, Inc., as the third highest ranked proposer;
• Pharmacy Services — Cigna, Inc. (Pass Through), as the top ranked proposer, Cigna,
Inc. (Traditional), as the second highest ranked proposer, and EnvisionRx, Inc. (Pass
Through), as the third highest ranked proposer;
• Employee Assistance Program — UMR, Inc. and Aetna Life Insurance Co., tied as the
top ranked proposers; Cigna, Inc., as the second highest ranked proposer, and Deer
Oaks EAP, LLC, as the third highest ranked proposer;
• Reinsurance/Stop Loss — Symetra Life Insurance Co., as the top ranked proposer;
Aetna Life Insurance Co. and Cigna, Inc., tied as the second highest ranked
proposer; and UMR, Inc., as the third highest ranked proposer; and
WHEREAS, the EAP benefit constitutes less than half of a percent of the City's health
plan, and the cost difference between the top-ranked Proposers, Aetna and UMR, and Cigna
was approximately $1,000 - $5,000 annually; and
WHEREAS, although Cigna was the second-ranked Proposer for the EAP benefit, Cigna
was the top-ranked medical ASO service Proposer, and the Administration recommends
negotiating with Cigna for the EAP benefit, as the goal of efficient benefit coordination, by
working with the same provider, outweighs the negligible price difference between the top-
ranked Proposers and Cigna; and
WHEREAS, the City Manager considered all of the responsive submissions and the
results of the Evaluation Committee process; and
WHEREAS, the City Manager recommends that the Administration be authorized to
negotiate with the following Proposers in the following categories: Cigna, as the top-ranked
Proposer for medical ASO and Pharmacy; Symetra as top-ranked Proposer for
Reinsurance/Stop-Loss; and Cigna as second-ranked Proposer for EAP; and upon completion
of successful negotiations, that the Mayor and City Clerk be authorized to execute the final
agreements.
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 the City Manager pertaining to the ranking
of proposals, pursuant to Request for Proposals No. 2016-086-WG - Health Plan Services and
Benefits to the City of Miami Beach Active Employees, Dependents, Pre-65 Retirees, and Post-
65 Retirees; authorize the Administration to negotiate with the following Proposers in the
following categories of health plan services: Cigna Health and Life Insurance Co., as top-
ranked Proposer for the Medical Administrative Service Only and Pharmacy Services; Symetra
Life Insurance Co., as top-ranked proposer for the Reinsurance/Stop Loss Services; and Cigna
Health and Life Insurance Co., as second-ranked Proposer for the Employee Assistance
Program; and further authorize the Mayor and City Clerk to execute agreements upon
conclusion of successful negotiations with the Administration.
PASSED AND ADOPTED this day of 2016.
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T:\AGENDA\2016\June\Human Resources\RFP 2016-086-Health Plan Services-RESO.doc
COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution, Accepting The Recommendation Of The City Manager Pertaining To The Ranking Of Firms, Pursuant To
The Request For Proposals(RFP)No. 2016-086-Wg For Health Plan Services And Benefits For The City Of Miami Beach
Active Employees, Dependents, Pre-65 Retirees, And Post-65 Retirees; And Authorizing The Mayor And City Clerk To
Execute Agreements Upon Conclusion Of Successful Negotiations With The Administration.
Key Intended Outcome Supported:
IEnsure Expenditure Trends Are Sustainable Over the Long Term
Item Summary/Recommendation:
Humana and AvMed are the current medical Health Maintenance Organization (HMO), Preferred Provider Organization
(PPO), and Point of Service (POS) administrators for the City's self-funded health care insurance plans. Since the
contracts with Humana and AvMed expire September 30, 2016. At the January 14, 2015 Commission meeting, it was
recommended that an Invitation to Negotiate (ITN) for medical ASO services be issued for the October 1, 2016, benefit
plan year. The Administration issued Request for Proposal (RFP)2016-086-WG to seek proposals from firms to provide
health care plan services and benefits to the City of Miami Beach active employees, dependents, pre-65 retirees, and
post-65 retirees.
The objective of the RFP was to solicit standalone offers for ASO services, pharmacy benefit management, EAP, and
reinsurance/stop loss coverage. The solicited services included but were not limited to, utilization review, case
management, disease management, behavioral health management, nationwide access to physician network, concierge
services, administration of COBRA benefit, a 24/7 nurse line, and pharmacy benefit management. The City's current
health plan designs for employees and retirees are: Standard HMO, Premium HMO, Standard PPO (Standard POS for
AvMed), Premium PPO (Premium POS for AvMed), and POS(Basic POS for AvMed).
The Evaluation Committee ("Committee") was composed of City employees Sonia Bridges, Dwayne Drury, Lauren Wynn
and Rafael Granado. The Committee convened on May 23, 2016, for Proposers presentations and to score on the
qualitative portion of each Proposer. The quantitative scoring of the proposers' financial responses was completed by
the Procurement Department.
The results of the Evaluation Committee process and the City Manager's recommendation is as follows: Cigna,. for
medical ASO, Cigna, (Pass Through)for pharmacy services, and Symetra for Reinsurance/Stop Loss.
Both Aetna and UMR were tied as the top-ranked proposers for EAP services. However, since Aetna and UMR, Inc. are
not top-ranked for medical ASO services, and the EAP benefit is less than half of a percent of the City's health plan, it is
recommended that we negotiate with Cigna, as the second-ranked proposer as economy of scales and better benefit
coordination. The negligible cost difference between the top-ranked proposers and Cigna is approximately $1,000 -
$5,000 annually.
Financial Information:
Source of Amount Account
Funds:
1 $815,000 560-1793-000303/304 ASO Fee Active/Retirees
2 $1,498,000 560-1793-000333/339 Stop Loss/Excess Ins.Active/Retirees
3 $135,000 560-1793-000343 Capitation and Other Fees
4 $43,000 560-1793-000344 EAP
5 $5,928,000 560-1793-000394/395 Prescription Claims Active/Retirees
6 $11,207,000 560-1793-000431 Medical Claims Active/Retirees
Total $19,626,000
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Sonia Bridges, Division Director, Risk&Benefits
Sign-Offs:
Department Directors Assistant City Manager City ager
SCT AD-V MT JLM I1'
T:WGENDA\2014\M:• -FQ 2014-056 MF Insurance Broker of Record-Summary.doc
ITEM `AGENDA I ` Z
MIAMIBEACH DATE 6- S?-13
® MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMIS ON MEMORANDUM
TO: Mayor Philip Levine and Members of e City Co i ission
FROM: Jimmy L. Morales, City Manager ,60°.■STIOPP
DATE: June 8, 2016
SUBJECT: A RESOLUTION OF THE MAYO AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER PERTAINING
TO THE RANKING OF FIRMS, PURSUANT TO THE REQUEST FOR PROPOSALS (RFP) NO. 2016-
086-WG FOR HEALTH PLAN SERVICES AND BENEFITS FOR THE CITY OF MIAMI BEACH
ACTIVE EMPLOYEES, DEPENDENTS, PRE-65 RETIREES, AND POST-65 RETIREES AND
AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE FOLLOWING PROPOSERS IN
THE FOLLOWING CATEGORIES OF HEALTH PLAN SERVICES: CIGNA HEALTH AND LIFE
INSURANCE CO., AS TOP-RANKED PROPOSER FOR MEDICAL ADMINISTRATIVE SERVICES
ONLY AND PHARMACY SERVICES; SYMETRA LIFE INSURANCE CO., AS TOP-RANKED
PROPOSER FOR STOP LOSS/REINSURANCE SERVICES; AND CIGNA HEALTH AND LIFE
INSURANCE CO., AS SECOND-RANKED PROPOSER FOR EMPLOYEE ASSISTANCE PROGRAM;
AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AGREEMENTS
UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS WITH THE ADMINISTRATION.
RECOMMENDATION
Adopt the resolution.
FUNDING
The annual cost associated with the health care plan services and benefits to the City of Miami Beach
active employees, dependents, pre-65 retirees, and post-65 retirees is subject to the allocation of funds
in the City's Fiscal Year 2016/2017 operating budget.
BACKGROUND
Humana Insurance Company ("Humana") has been providing health care services to the City in some
capacity for approximately 20 years. An Employee Assistance Program ("EAP") and COBRA services
have also been a part of the bundled services provided by Humana. Effective January 1, 2009, the
City's fully-insured agreement with Humana changed to a self-funded agreement, with Humana
providing the day-to-day administration of the City's medical plan through an Administrative Services
Only ("ASO")agreement.
Humana and AvMed, Inc. ("AvMed") are the current medical Health Maintenance Organization (HMO),
Preferred Provider Organization (PPO), and Point of Service (POS) administrators for the City's self-
funded health care insurance plans. Since the contracts with Humana and AvMed expire September
30, 2016, the Administration issued Request for Proposals (RFP) 2016-086-WG to seek proposals
from firms to provide health care plan services and benefits to the City of Miami Beach active
employees, dependents, pre-65 and post-65 retirees.
The objective of the RFP was to solicit standalone offers for ASO services, pharmacy benefit
management, EAP, and reinsurance/stop loss coverage. The solicited services included but were not
limited to, utilization review, case management, disease management, behavioral health management,
nationwide access to physician network, concierge services, administration of COBRA benefit, a 24/7
nurse line, and pharmacy benefit management. The City's current health plan designs for employees
and retirees total 10; five plans mirrored by each of the two carriers: (See Appendix A).
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees, and Post-65 Retirees
June 8,2016
Page 2
• Standard HMO
• Premium HMO
• Standard PPO (Standard POS for AvMed)
• Premium PPO (Premium POS for AvMed)
• POS (Basic POS for AvMed)
In August 2014, negotiations between Humana and Baptist Healthcare System ("Baptist") ended in an
impasse. As of this date, Humana and Baptist have not reached agreement and as a result, most if not
all, Baptist hospitals, physicians and associated health care practitioners were placed out-of-network
for the City's employees and retirees enrolled in the health plan. This reduction in the choice of
providers available in the South Florida area led the City to address the needs of affected
employees/retirees who not only relied on Baptist for their health care services, but were now to pay
out-of-network fees which are substantially higher. On January 14, 2015, the City Commission adopted
Resolution No. 2015-28904, accepting the recommendation of the Finance and Citywide Projects
Committee (FCWPC), waiving, by 517th, vote the formal bidding requirement and authorizing the
Administration to negotiate and execute a contract with AvMed for the provision of medical ASO
services effective March 1, 2015, through September 30, 2016, with Humana also providing continued
and alternative health care services through the same date.
The Commission also recommended that an Invitation to Negotiate (ITN) for medical ASO services be
issued for the October 1, 2016, benefit plan year.
RFP PROCESS
The RFP was released March 11, 2016. On April 28, 2016, the City received complete and responsive
proposals from;
• Aetna Life Insurance Company,
• AvMed, Inc.,
• Cigna, Inc. ("Cigna"),
• Concordia Behavioral Health,
• Deer Oaks EAP, LLC,
• EnvisionRx, Inc.,
• Humana Insurance Company,
• Symetra Life Insurance Company("Symetra"); and
• UMR, Inc. a United Healthcare Company ("UMR").
The Valery Insurance Agency, Inc. was deemed non-responsive due to its failure to meet the minimum
requirements established in the RFP.
On April 29, 2016, the City Manager appointed, via Letter to Commission (LTC) No. 190-2016, an
Evaluation Committee (the"Committee"), consisting of the following individuals:
• Sonia Bridges, Division Director Risk& Benefits, Human Resources Department
• Dwayne Drury, Assistant Fire Chief, Fire Department
• Lauren Wynn, Senior Management & Budget Analyst, Office of Budget and Performance
Improvement
• Karen Rivo, Registered Nurse, Health Advisory Committee Member
• Robert Parr, Chief of Compensation and Benefits, City of Jacksonville
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees,and Post-65 Retirees
June 8,2016
Page 3
The following alternates were also appointed:
• Rafael Granado, City Clerk, Office of the Clerk
• Jose Del Risco, Human Resources Assistant Director, Human Resources Department
• Natasha Diaz-Rojas, Senior Management & Budget Analyst, Office of Budget and
Performance Improvement; and
Ultimately, the Committee was composed of Sonia Bridges, Dwayne Drury, Lauren Wynn and Rafael
Granado because other members were unable to attend.
The Committee convened May 23, 2016, to consider all responsive proposals. At the meeting, the
Committee was given an overview of the RFP, information relative to the City's Cone of Silence
Ordinance and the applicability of Florida's Sunshine Law. General information on the scope of services
and financial capability was also reviewed. A copy of each responsive proposal had been provided to
each member in advance of the meeting. The Committee was instructed to score and rank the
proposals pursuant to the evaluation criteria established in the RFP, and was therefore solely focused
on the qualitative aspects of the proposers' responses.
Evaluation Criteria Total Points
Step 1-Qualitative Criteria
Proposer Experience and Qualifications, including Financial Capability 35
Scope of Services Proposed 35
Approach and Methodology 15
Evaluation Criteria Total Points
Step 2-Quantitative Criteria
Cost Proposal 15
After the proposers' presentations and interviews, the Committee discussed the proposers'
qualifications, experience, and competence, and scored the responses in accordance with the
qualitative criteria established in the RFP. The quantitative scoring of the proposers' financial responses
was completed based on the City consultant's analysis of costs. The final rankings are included in
Appendix B.
The results of the Evaluation Committee process were presented to the City Manager for his review and
recommendation to the City Commission.
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees,and Post-65 Retirees
June 8,2016
Page 4
CITY MANAGER'S DUE DILIGENCE AND RECOMMENDATION
After considering proposals and the results of the Evaluation Committee process, pursuant to RFP No.
2016-086-WG, for Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents, Pre-65 Retirees, and Post-65 Retirees, the City Manager recommends that negotiations
begin with the top-ranked proposers (except for EAP) in each benefit category, as follows:
• Cigna for medical ASO. At its March 9, 2016, meeting the City Commission held a discussion
regarding the importance of choice in health care options for City employees. It has always
been the City's practice to provide choice to its employees in various plan options. The City has
historically provided these options through a single health care provider. The reason for the
single provider has been an attempt to contain costs. It is also the practice among the majority
of public agencies in South Florida, as well as throughout the state, to contract with a single
provider. Most recently, Humana was the City's single provider for the health care options
provided to City employees. Unfortunately, in 2014, Humana was unable to maintain its
contractual relationship with the Baptist Health System, which created a hardship for many City
employees that live in regions of the County primarily served by the Baptist system. As a result,
the City had to contract with a second provider that did include the Baptist system in its network.
AvMed was chosen to close the gap created by the exclusion of the Baptist system from the
Humana network. However, while choice (which is an important component of this
recommendation) for City employees is extremely important, having two providers is more
costly for the City. Through the recommended provider, our employees will have access to a
broad national network of physicians, hospitals and other medical providers. Additionally, the
City will be able to benefit from the cost savings of a single provider. See below for additional
detail.
• Cigna (Pass Through) for pharmacy services. See below for additional detail.
• Symetra for reinsurance/stop loss.
• Cigna for EAP. Both Aetna and UMR were tied as the top-ranked proposers for EAP services
and Cigna was ranked second; however, the cost difference between these top-ranked
Proposers and Cigna was approximately $1,000 - $5,000 annually. Since the EAP benefit is
less than half of a percent of the City's health plan, the difference in cost between the top-
ranked Proposers and Cigna is negligible. There are certain instances when a recipient of EAP
services will also need related benefits which are provided by the medical and/or
pharmaceutical providers and the timely and efficient coordination of these benefits is critical to
the care of the individual/employee. The City Manager recommends that the City negotiate with
Cigna, as the second-ranked Proposer, as the goal of having efficient benefit coordination, by
working with the same carrier who provides the medical ASO and/or pharmacy services,
outweighs the negligible price difference between the top-ranked Proposers and Cigna.
Compared to the City's current arrangement, by selecting Cigna for Medical ASO and Pharmacy
services, as described below, the City has an opportunity to reduce administrative expenses, while
honoring the desire of the City Commission to provide greater access to healthcare providers and
choice for City employees and retirees:
1. Cigna's Medical ASO Services Projected Cost Savings
a. The City pays approximately $910,000 annually for Medical ASO services under the
current two-carrier arrangement, excluding pharmacy rebate credits.
b. Cigna has offered a $229,650 (6-month) Medical ASO services credit in the first year
if awarded exclusive Medical and Pharmacy services. Combined with Cigna's offer
to provide Medical ASO services at an estimated annual cost of$748,000, first year
savings under Cigna would be approximately$339,000.
c. Over three (3) years, Cigna's proposal for Medical ASO services will save the
City approximately $558,000 in administrative services expense.
2. Cigna's Medical and Pharmacy Projected Claims Savings
a. Medical Claims Savings — estimated to be $101,000 annually based upon repricing
data submitted through the RFP process.
b. Pharmacy Claims Savings — estimated to be $533,000 annually based upon
repricing data submitted through the RFP process.
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees,and Post-65 Retirees
June 8,2016
Page 5
c. As part of the RFP process, the City's most recent twelve (12) months of medical
claims data was provided to the Proposers to estimate their discounts, or cost
savings. The Proposers' submitted discount data / cost savings is not a guarantee
of future health plan expense but rather reflects each Proposer's discount. As the
City has a self-funded health plan, healthcare claims volumes will always be variable
and subject to change. Here is an example using the same discount but different
billed volumes:
1. $20,000,000 in healthcare claims billed—60% discount—$8,000,000 in
healthcare claims paid.
2. $12,000,000 in healthcare claims billed —60% discount—$4,800,000 in
healthcare claims paid.
3. Total Projected Savings under Cigna over Three(3)Years
a. Based upon current fixed costs and a comparison of the medical and pharmacy
claims repricing data, the three (3) year savings by selecting Cigna for Medical ASO
and Pharmacy Services is estimated to be approximately$2.5 million.
4. Cigna's Choice/Access to Healthcare Providers
a. City Health Plan Members will have the greatest access to healthcare providers
under the Cigna Open Access Plus (OAP) network including the following:
1. 99.9% of Health Plan Members will have access to at least two (2) Primary
Care Physicians within 10 miles of their home zip code under the Cigna
network.
2. 99.5% of Health Plan Members will have access to at least two (2)
Pediatricians within 10 miles of their home zip code under the Cigna network.
3. 99.0% of Health Plan Members will have access to at least two (2)
Obstetricians / Gynecologists within 10 miles of their home zip code under the
Cigna network.
4. 99.9% of Health Plan Members will have access to at least two (2) other
specialists within 10 miles of their home zip code under the Cigna network.
5. 99.4% of Health Plan Members will have access to at least two (2) Hospitals
within 15 miles of their home zip code under the Cigna network.
b. These results exceeded all other Proposers' networks and will provide City Health
Plan Members with a greater amount of choice of healthcare providers in the
marketplace.
5. Cigna's Significant Market Presence— Public Sector Accounts in Florida:
a. City of Fort Lauderdale
b. Hillsborough County BOCC
c. Miami-Dade County Schools
d. Orange County Government
e. Palm Beach County BOCC
f. Palm Beach County Sherriffs Office
g. Seminole County Public Schools
h. The School Board of Orange County
CONCLUSION
Based upon timeliness as it relates to Open Enrollment (please see Appendix C), and the best interest
of the City's employees and retirees, the Administration recommends that the Mayor and City
Commission approve the Resolution accepting the recommendation of the City Manager, pertaining to
the ranking of proposals received pursuant to Request for Proposals (RFP) No. 2016-086-WG, for
Health Plan Services and Benefits to the City of Miami Beach Active Employees, Dependents, Pre-65
Retirees, and Post-65 Retirees; authorize the Administration to negotiate contracts with Cigna, as the
top-ranked Proposer for medical ASO and Pharmacy; Symetra as top-ranked Proposer for
Reinsurance/Stop-Loss; and Cigna as second-ranked Proposer for EAP; and further authorize the
Mayor and City Clerk to execute agreements with the recommended firms upon conclusion of
successful negotiations by the Administration.
JLM/MT/SC-T/AD/WG
T:WGENDA\2016 June\Procurement\RFP 2016-086-WG Health Care Services\RFP 2016-086-WG Health Care Services-Memo.doc
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees, and Post-65 Retirees
June 8,2016
Page 6
Appendix A
STATUS OF EMPLOYEE PARTICIPATION
Health care options are identified by a number of acronyms that should be defined. An HMO is a health
care maintenance organization; further defined below. A PPO is a preferred provider organization, also
addresses in more detail below.
The breakdown of active employee participation during FY2015/16 in the choices offered by the City's
health care benefit plans is as follows:
•
Active City Annual Employee
Plan Employees Premium Cost Annual
• (As of 2/15/16) Per Employee Premium Cost
Standard HMO Single 617 $6,118 $1,829
Standard HMO Family 418 $13,111 $6,588
Premium HMO Single 13 $8,000 $8,000
Premium HMO Family 2 $19,833 $19,833
Standard PPO Single 10 $6,615 $6,615
Standard PPO Family 4 $16,233 $16,233
Premium PPO Single 8 $6,884 $6,884
Premium PPO Family 6 $16,890 $16,890
POS Single 0 $8,137 $8,137
POS Family 0 $20,194 $20,194
Active Employees 1,078
Total Annual City Premium Cost: $9,686,364
Annual Average City Premium Cost per $8,985
Employee:
Despite the number of choices available, active employees who elect to be covered by the health care
insurance provided by the City, most cluster around the Standard HMOs because of cost. The City is
required by the terms and conditions of various collective bargaining agreements to subsidize a
minimum of 50 percent of the premium. The City's premium subsidy for the Standard HMO plans is 77
percent for single coverage under the Standard HMO and 67 percent for family coverage in the
Standard HMO. All other choices have a premium subsidy of 50 percent.
Health maintenance organizations are some of the most common plans, making up nearly 30% of all
health care plans, according to the Kaiser Family Foundation. An HMO uses primary care physicians
(PCPs) as "gatekeepers" to prevent costly overuse of medical services; to see a specialist, patients
must receive a referral from their PCP. The City's Standard HMO plan does not require a gatekeeper or
PCP referral to seek specialty or additional care while the Premium HMO does. Customers who enroll in
these kinds of plan are required to choose health care providers within the network of contracted
physicians and hospitals. If you have an HMO and want to see a non-network doctor, the plan will not
cover any of those costs, except in emergencies.
HMOs are ideal for individuals who seek lower-cost health services overall or for those who prefer the
guidance of a trusted physician in all their care choices. Aside from having to choose providers in the
network, there are few other limitations.
Conversely, retirees who have the same options, elect to choose the Standard and Premium PPOs
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees,and Post-65 Retirees
June 8,2016
Page 7
despite the higher premiums and lower City subsidies. The City's PPO model does not contain a
gatekeeper or PCP referral and has an out-of-network benefit.
PPO plans aim to restrain overuse of medical services while allowing patients more flexibility in their
choice of physicians and specialists. There is no PCP gatekeeper for these plans, but customers are
encouraged to choose providers within the network. If you choose a provider outside of the network in a
PPO, you'll pay more out of pocket, at least until you reach your plan's deductible. The network itself
consists of contracted physicians, but their contracts do not exclude them from other networks like in an
HMO.
A PPO plan is ideal for those who need or want more provider options, whether it's because the patient
lives in a remote area or has to see several different specialists.
When data was gathered for the purposes of reporting, two eligible, active employees elected a point of
service plan (POS) as their health plan chose choice but have subsequently unenrolled from this plan
as of 2/15/16 when the last census was compiled. A POS plan is a type of managed healthcare system
that combines characteristic of the HMO and PPO. Like an HMO, you pay no deductibles and usually
only a minimal co-payment when you use a health care provided within your network. You must also
choose a PCP who is responsible for all referrals within the POS network. If you choose to go outside
the network, you will likely be subject to a deductible and your co-insurance rate will be a substantial
percentage of the physician's charges. As a point of fact, 17 retirees are currently enrolled in the POS
but not listed in the table on the previous page which shows active employees only.
POS coverage allows you to maximize your freedom of choice. Like a PPO, you cans mix the types of
care you receive. This freedom of choice encourages you to use network providers but does not require
it as with HMO coverage.
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees,and Post-65 Retirees
June 8,2016
Page 8
APPENDIX B
Health Plan ASO Services:
RFP 2016-086-WG
0
c
Health Plan Services and Benefits
c
IT to the City of Miami Beach Active .c g LOW
el
Employees,Dependents.Pre-65 m c c AGGRE
Retirees,and Post-65 Retirees as 7 °w g GATE
u Ranking Ranking ail Ranking . Ranking TOTALS
Aetna life Insurance Co. 86 3 93 3 94 1 90 1 8 2
AvMed,Inc. 80 5 85 4 77 4 83 4 17 4
Cigna 95 1 97 1 92 2 89 2 6 1
Humana Insurance Co. 83 4 79 5 71 5 68 5 19 5
UMR,Inc. 92 2 97 1 82 3 85 3 9 3
Quantitative Criteria-Cost Pro oosal&Veterans Preference
i Veterans
Maximum 15 Preference
Points Allowable 5 Total Points
Proposer Allowed Pointy Awarded'
Aetna Life Insurance Co. 14 0 14
AvMed,Inc. 14 0 14
Cigna 14 - 0 14
Humana Insurance Co. 13 0 13
UMR,Inc. 15 0 � 15
Pharmacy Services:
RFP 2016-086-WG
F a c
Health Plan Services and Benefits to the City y § z'
of Miami Beach Active Employees, m S LOW
Dependents.Pre-65 Retirees,and Post-65 co a. ro c AGGRE
Retirees a GATE
il Ranking ra Ranking ce Ranking 3 Ranking_TOTALS
Aetna Life Insurance Co. TRADITIONAL 86 5 89 5 91 3 85 1 14 4
AvMed,Inc.TRADITIONAL 80 8 74 7 63 8 68 8 31 8
Cigna PASS THROUGH 93 2 97 1 94 1 74 7 11 1
Cigna TRADITIONAL 85 6 95 2 _ 92 2 84 2 12 2
Envision RX PASS THROUGH 94 1 78 6 86 4 84 2 13 3
Humana TRADITIONAL 84 7 64 8 71 7 76 6 28 7
UMR PASS THROUGH 87 3 90 4 72 6 80 5 18 6
UMR TRADITIONAL 87 3 93 3 75 5 82 4 15 5
Quantitative Criteria-Cost Proposal&Veterans Preference
Veterans
Maximum Preference Total
15 Points Allowable 5 Pointy
Proposer Allowed Points Awarded'
Aetna Life Insurance Co. TRADITIONAL 15 0 15
AvMed,Inc.TRADITIONAL 8 0 8
Cigna PASS THROUGH 14 0 14
Cigna TRADITIONAL 12 0 12
Envision RX PASS THROUGH 12 0 12
Humana TRADITIONAL 6 0 6 ,
UMR PASS THROUGH 8 0 8
UMR TRADITIONAL 11 0 11
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees,and Post-65 Retirees
June 8,2016 .
Page 9
Employee Assistance Program:
RFP 2016-086-WG o
v
Health Plan Services and Benefits g e
to the City of Miami Beach Active t E LOW
Employees.Dependents.Pre-65 m c 0 a AGGRE
to Retirees.and Post-65 Retirees .12 GATE
i Ranking ti Ranking & Ranking 3 Ranking_TOTALS
Aetna Life Insurance Co. 93 2 90 3 92 1 83 3 9 1
Cigna 85 4 93 2 91 2 84 2 10 3
Concordia Behavioral Health 73 6 76 6 58 6 63 6 24 6
Deer Oaks EAP Services LLC 98 1 83 5 75 3 67 5 14 4
Humana Insurance Co. 83 5 86 4 72 5 79 4 18 5
UMR,Inc. 91 3 94 1 73 4 85 1 9 1
Quantitative Criteria-Cost Proposal&Veterans Preference
Veterans
Maximum 15 Preference
Points Allowable 5 Total Point
Proposer Allowed Points Awarded*
Aetna Life Insurance Co. 11 0 11
Cigna 11 0 11 .
Concordia Behavioral Health 13 0 13
Deer Oaks EAP Services LLC 15 0 15
Humana Insurance Co. 13 0 13
UMR,Inc. 13 0 13
Reinsurance/Stop Loss:
RFP 2016-086-WG o
Health Plan Services and Benefits .g. e
to the City of Miami Beach Active r
LOW
Employees.Dependents.Pre-SS CO c (7 c AGGREG
Retirees.and Post-65 Retirees is 42 ATE
Ranking Ranking & Ranking 3 Ranking TOTALS
Aetna Life Insurance Co. 86 3 82 4 89 2 87 2 11 2
Cigna 85 4 95 2 90 1 84 4 11 2
Symetra Life Insurance Co. 98 1 100 1 87 3 95 1 6 7
UMR,Inc. 91 2 94 3 64 4 85 3 12 4
Quantitative Criteria-Cost Pro'iosal&Veterans Preference
Veterans
Maximum 15 Preference
Points Allowable 5 Total Points
Proposer Allowed Points Awarded'
Aetna Life Insurance Co. 14 0 14
Cigna 15 0 15
Symetra Life Insurance Co. 15 0 . 15
UMR,Inc. 14 0 14
•
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees, and Post-65 Retirees
June 8,2016
Page 10
Appendix C
CONSIDERATIONS FOR OPEN ENROLLMENT(OCTOBER 1, 2016)
As the contracts with the City's current reinsurer (Symetra) and the current Medical ASO providers
(AvMed & Humana), who also provide Pharmacy and Employee Assistance Program services will end
September 30, 2016, adopting this resolution without delay will allow for all open enrollment
considerations to move forward effectively. Some of the items that the Human Resources and Risk
Management Department will consider are the following:
• Health Plan Design — the City's health plan will move to "non-grandfathered" status effective
October 1, 2016. This means that certain plan design elements will have to be adjusted to
comply with the Patient Protection and Affordable Care Act ("PPACA") for "non-grandfathered"
health plans.
• Number of Plans — the City currently offers five (5) plan designs that have remained in effect
over the years for a variety of reasons. This exceeds what most employers offer for a
population of the City's size. The City may explore whether two or three plans designed to meet
"non-grandfathered" status might be more advantageous both to the City and its employees and
retirees. Currently, more than 85% of the City's health plan members are enrolled in just one
plan, the Standard HMO, which is evidence that five plans and the choice associated with this
offering is not being used. The following is an example of what might be considered as a Health
Plan offering during Open Enrollment for the October 1, 2016 — September 30, 2017 benefit
plan year:
Possible October 1, 2016 Offering
Standard HMO HMO Plan Design(TBD)
Premium HMO PPO Plan Design Standard (TBD)
Standard PPO PPO Plan Design Premium (TBD)
•
Premium PPO
National POS
• Health Plan Tier Structure — the City currently offers employees and retirees two coverage
choices for themselves or their dependents: single or family coverage. Many employers have
moved to a three or four tier arrangement to provide health care plan members with and can
allow for a more equitable method of distributing cost and risk. As part of strategizing for open
enrollment, the City may explore these models and evaluate whether they could be of benefit to
employees and retirees. Examples of these more predominant models are as follows:
o 3-Tier
• Employee
• Employee+ 1 Dependent
• Employee + Family
Commission Memorandum—RFP 2016-086-WG Health Plan Services and Benefits to the City of Miami Beach Active Employees,
Dependents,Pre-65 Retirees, and Post-65 Retirees
June 8,2016
Page 11
o 4-Tier
• Employee
• Employee + Spouse
• Employee + Child(ren)
• Employee + Family
• Employee & Retiree Health Care Plan Contributions — before the start of every employee
benefit plan year (October 1), the City's Health Care Benefits Consultant sets actuarial funding
rates indicative of the total estimated cost of the health plan for the next twelve months. The
City deliberates on the amount to "cost share" with employees/retirees or the amount of
"premium" to share which is based on a number of factors. Upon completion of the
aforementioned items (approval of resolution, health plan design considerations, number of
plans to be offered, and health plan tier structure), setting funding rates and contributions is the
last step taken prior to open enrollment which begins August 24, 2016, and ends September 14,
2016.
•