2016-29474 Reso RESOLUTION NO. 2016-29474
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 INVITATION TO NEGOTIATE (ITN) NO. 2016-084-WG FOR
ADMINISTRATION OF THE CITY'S ANCILLARY HEALTH BENEFITS FOR
EMPLOYEES, RETIREES AND THEIR DEPENDENTS; AUTHORIZING THE
ADMINISTRATION TO NEGOTIATE WITH THE FOLLOWING PROPOSERS IN
THE FOLLOWING CATEGORIES OF ANCILLARY SERVICES: CIGNA
HEALTH AND LIFE INSURANCE CO., AS TOP-RANKED PROPOSER FOR
GROUP DENTAL COVERAGE; UNUM LIFE INSURANCE COMPANY OF
AMERICA, AS TOP-RANKED PROPOSER FOR FAMILY AND MEDICAL
LEAVE ACT ADMINISTRATION, LONG-TERM DISABILITY COVERAGE FOR
DEFINED CONTRIBUTION RETIREMENT PLAN (401A) PARTICIPANTS,
VOLUNTARY SHORT-TERM AND LONG-TERM DISABILITY COVERAGE,
AND GROUP LIFE AND ACCIDENTAL DEATH & DISMEMBERMENT
COVERAGE; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK
TO EXECUTE AGREEMENTS UPON CONCLUSION OF SUCCESSFUL
NEGOTIATIONS WITH THE ADMINISTRATION.
WHEREAS, as required by the U.S. Department of Labor, the City's Family Medical Leave Act
(FMLA) policy provides employees the opportunity for up to twenty-six (26) weeks of unpaid leave for a
personal illness or care of a family member; and
WHEREAS, UNUM Life Insurance Company of America (UNUM) has been the administrator of
this FMLA benefit, including medical certification and day-to-day management, pursuant to their
agreement effective January 1, 2010;. and
WHEREAS, UNUM provides employees the opportunity to purchase short and long term
disability, should they be unable to work for an extended period of time; and
WHEREAS, UNUM also provides the Defined Contribution Retirement Plan (401a) participants a
long term disability benefit with the annual cost paid by the City, to mirror the long-term disability benefits
provided by the Miami Beach Employee's Retirement Plan; and
WHEREAS, Hartford Life and Accident Insurance Company provides group life insurance,
accidental death insurance and supplemental employee life coverage, including spouse life and
dependent life insurance; and
WHEREAS, Metropolitan Life Insurance Company ("MetLife") administers the City's self-funded
group dental preferred provider plan ("PPO"), as well as providing a fully-insured dental health
maintenance organization ("DHMO") plan; and
WHEREAS, Invitation to Negotiate No. 2016-084-WG (the "ITN") for Ancillary Benefits was
released on April 21, 2016; and
WHEREAS, the City received complete and responsive proposals from Aetna Life Insurance
Company, Cigna Health and Life Insurance Company ("Cigna"), Life Insurance Company of North
America Cigna, Hartford Life and Accident Insurance Co., Humana Insurance
Company/Humana/CompBenefits, Inc., Metropolitan Life Insurance Co., Minnesota Life Insurance Co.,
Reliance Standard Life Insurance Co./Matrix, Solstice Benefits Inc., Standard Insurance Co., and UNUM;
and
WHEREAS, on June 8, 2016 and June 20, 2016 (revised), the City Manager, via Letter to
Commission, appointed an Evaluation Committee (the "Committee") consisting of the following
individuals:
• Angela Breadwood, Claims Manager, Risk Management Department, City of Miami
• Frank Estevez, Employee Benefits Manager, Human Resources Department
• Salvatore Frosceno, EMS Coordinator, Fire Department
• Manny Marquez, Assistant Director, Finance Department
• Natasha Nicholson, Senior Management Analyst, Public Works Department
•
The following alternates were also appointed:
• James Hollis, Safety Officer, Human Resources Department
• Maria Ruiz, Director, Housing and Community Services Department
• John Shumaker, Deputy Director, Finance Department
• James Sutter, Internal Auditor, Internal Audit Department; and
WHEREAS, the Committee composed of Frank Estevez, Salvatore Frosceno, Manuel Marquez,
and Natasha Nicholson, convened on June 23, 2016, to consider all responsive proposals; and
WHEREAS, the Committee's ranking was as follows: Cigna and MetLife tied as top-ranked
proposers for Group Dental coverage; and UNUM, as top-ranked proposer for Family and Medical Leave
Act ("FMLA") administration, Long-term Disability coverage for Defined Contribution Retirement Plan
(401a) Participants, Voluntary Short-term and Long-term Disability coverage, and Group Life and
Accidental Death & Dismemberment coverage; 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 the City award a contract to and enter into
negotiations with the top-ranked proposer, Cigna, for Group Dental coverage; and
WHEREAS, the City Manager recommends that the City award a contract to and enter into
negotiations with the top-ranked proposer, UNUM, for FMLA administration, Long-term Disability
coverage for Defined Contribution Retirement Plan (401a) Participants, Voluntary Short-term and Long-
term Disability coverage, and Group Life and Accidental Death & Dismemberment coverage; and
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 firms, pursuant to Invitation to Negotiate
No. 2016-084-WG for administration of the City's Ancillary Health Benefits for Employees, Retirees and
their Dependents; and further authorize the Administration to negotiate with the following proposers in the
following categories of ancillary services: Cigna Health and Life Insurance Co., as top-ranked proposer
for Group Dental coverage; Unum Life Insurance Company of America, as top-ranked proposer for Family
and Medical Leave Act administration, Long-Term Disability coverage for Defined Contribution Retirement
Plan (401a) participants, Voluntary Short-Term and Long-Term Disability coverage, and Group Life and
Accidental Death & Dismemberment coverage; and further authorize the Mayor and City Clerk to execute
agreements upon successful negotiations with the Administration.
PASSED AND ADOPTED this _ of JN 7 2016.
ATTEST: �I g ,
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am ` ?'IL r �� MAYOR
RAFA L E. GRANA O, CI Y C RK.INCORP ORATED:
T:\AGENDA\2016Wune\Human Resources\RFP 2016 HeaIth.Plan Servi /f�ESO.doc r
APPROVED AS TO
FORM & LANGUAGE
& FOR EXECUTION •
--2 (L ((b
City Attorney Afrr Do et
COMMISSION ITEM SUMMARY
Condensed Title:
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 INVITATION TO
NEGOTIATE (ITN) NO. 2016-084-WG FOR ADMINISTRATION OF THE CITY'S ANCILLARY HEALTH BENEFITS FOR
EMPLOYEES, RETIREES AND THEIR DEPENDENTS; AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE
FOLLOWING PROPOSERS IN THE FOLLOWING CATEGORIES OF ANCILLARY SERVICES: CIGNA HEALTH AND LIFE
INSURANCE CO., AS TOP-RANKED PROPOSER FOR GROUP DENTAL COVERAGE; UNUM LIFE INSURANCE COMPANY OF
AMERICA,AS TOP-RANKED PROPOSER FOR FAMILY AND MEDICAL LEAVE ACT ADMNISTRATION, LONG-TERM DISABILITY
COVERAGE FOR DEFINED CONTRIBUTION RETIREMENT PLAN (401A) PARTICIPANTS, VOLUNTARY SHORT-TERM AND
LONG-TERM DISABILITY COVERAGE, AND GROUP LIFE AND ACCIDENTAL DEATH & DISMEMBERMENT COVERAGE; AND
FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AGREEMENTS UPON CONCLUSION OF SUCCESSFUL
NEGOTIATIONS WITH THE ADMINISTRATION.
Key Intended Outcome Supported:
Ensure Expenditure Trends Are Sustainable Over the Long Term
Item Summary/Recommendation:
The City provides its employees access to a voluntary benefit program. These benefits include group dental coverage, group
life coverage(including supplemental life insurance fully-funded by employees), mandatory accidental death&dismemberment
coverage ("AD&D"), short and long-term disability coverage, and a long-term disability plan for approximately 29 active
employees enrolled in the Defined Contribution Retirement Plan ("401(a)"). With the exception of the short and long-term
disability coverages, and supplemental life insurance coverage,which are fully-funded by employees,the City contributes to the
group dental coverage, the basic life and AD&D coverage, and the 401(a) plan. Additionally, since January 1, 2010, the City
has contracted out the administration of its Family Medical Leave Act ("FMLA") obligations to the disability program
administrator(Unum). The City pays an administrative fee per employee per month("PEPM")for these FMLA services.
The ITN No. 2016-084-WG was released on April 21, 2016. On June 1, 2016, the City received complete and responsive
proposals from Aetna Life Insurance Company, Cigna, Inc., the Hartford Life and Accident Insurance Company, Humana, Inc.,
MetLife, Inc., Minnesota Life (a Securian Company), Reliance Standard Life Insurance Company, Solstice Benefits, Inc., The
Standard Insurance Company,and Unum Life Insurance Company.
The objective of the ITN was to solicit standalone offers for the ancillary benefits, as well as management of the City's FMLA
policy.
The Evaluation Committee ("Committee") was composed of City employees Frank Estevez, Salvatore Frosceno, Manuel
Marquez, and Natasha Nicholson. The Committee convened on June 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 are as follows: Cigna, for Group
Dental coverage; and UNUM for FMLA Administration, Voluntary Short and Long Term Disability, Long Term Disability for
Defined Contribution Retirement Plan (401a) Participants, and Group Life and Accidental Death & Dismemberment coverage.
With the ranking results producing a tie for the top ranked proposers being Cigna and MetLife, financial and benefit information
was considered in order to determine which proposer to approach first for negotiations. Cigna is selected as the proposer to
enter into negotiations with based upon its proposal having the lowest premium rate for the DHMO plan, as well as a lowest rate
for the administration of the DPPO plan.
Financial Information:
Source of Amount Account
Funds:
1 $72,000 565-1793-000303/304 ASO Fee DPPO Active/Retirees
2 $1,201,000 565-1794-000432 DPPO Paid Claims
3 $404,000 565-1796-000375 DHMO Premium
4 $86,940 601-360-229331 FMLA Administration
5 $9,000 011-9611-000375 Long-term Disability(401a)Participants
Total $1,772,940
City Clerk's Office Legislative Tracking:
Sonia Bridges, Division Director, Risk&Benefits
Sign-Offs:
Department 'rectors Assista � anager City M ager
SCT GAAD W MT �� JLM
T:\AGENDA\2016\Ju' uman Resources\Summary-Ancilla fits ITN No.2016-084-WG.docx
MIAMIBEACH AGENDA ITEM
DATE 7^13--15
® MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members Of the City Corn ission
FROM: Jimmy L. Morales, City Manager A
DATE: July 13, 2016
SUBJECT: 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 INVITATION TO
NEGOTIATE (ITN) NO. 2016-084-WG FOR ADMINISTRATION OF THE CITY'S ANCILLARY
HEALTH BENEFITS FOR EMPLOYEES, RETIREES AND THEIR DEPENDENTS;
AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE FOLLOWING
PROPOSERS IN THE FOLLOWING CATEGORIES OF ANCILLARY SERVICES: CIGNA
HEALTH AND LIFE INSURANCE CO., AS TOP-RANKED PROPOSER FOR GROUP DENTAL
COVERAGE; UNUM LIFE INSURANCE COMPANY OF AMERICA, AS TOP-RANKED
PROPOSER FOR FAMILY AND MEDICAL LEAVE ACT ADMNISTRATION, LONG-TERM
DISABILITY COVERAGE FOR DEFINED CONTRIBUTION RETIREMENT PLAN (401A)
PARTICIPANTS, VOLUNTARY SHORT-TERM AND LONG-TERM DISABILITY COVERAGE,
AND GROUP LIFE AND ACCIDENTAL DEATH & DISMEMBERMENT COVERAGE; AND
FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AGREEMENTS
UPON CONCLUSION OF SUCCESSFUL NEGOTIATIONS WITH THE ADMINISTRATION.
ADMINISTRATION RECOMMENDATION
Adopt the resolution.
FUNDING
The City's portion of the annual cost associated with the ancillary health benefits to the City of Miami Beach
active employees, dependents, retirees is subject to the allocation of funds in the City's Fiscal Year
2016/2017 operating budget.
BACKGROUND
The City provides its employees access to a voluntary benefit program. These benefits include group dental
coverage, group life coverage (including supplemental life insurance fully-funded by employees), mandatory
accidental death & dismemberment coverage ("AD&D"), short and long-term disability coverage, and a long-
term disability plan for approximately 29 active employees enrolled in the Defined Contribution Retirement
Plan ("401(a)"). With the exception of the short and long-term disability coverages, and supplemental life
insurance coverage, which are fully-funded by employees, the City contributes to the group dental coverage,
the basic life and AD&D coverage, and the 401(a) plan. Additionally, since January 1, 2010, the City has
contracted out the administration of its Family Medical Leave Act ("FMLA") obligations to the disability
program administrator (Unum). The City pays an administrative fee per employee per month ("PEPM") for
these FMLA services.
Group Dental Insurance:
The City's Code of Ordinances, Chapter 78-107, provide for employee group health coverage, as well as
group dental coverage, with the cost of such coverage shared between the employee and the City. The
group dental coverage is offered to all active full-time employees (excluding members of the International
Commission Memorandum—ITN 2016-084-WG Administration of the City's Ancillary Health Benefits for Employees,Retirees and Their
Dependents
July 13,2016
Page 2
Association of Fire Fighters), and retirees. Both the City and employees/retirees contribute to the cost of
this coverage, at different rates, based on the plan elected by the participant.
Under Resolution No. 2009-27137, the City has two group dental plans: one is a self-funded dental
preferred provider plan ("DPPO") and the other is a fully-insured dental health maintenance organization
("DHMO") plan. This contract was extended on a month-to-month basis. MetLife is the provider of the fully-
insured DHMO plan and is the third party administrator ("TPA")for the DPPO self-funded plan. As the TPA,
MetLife administers and pays claims for the DPPO dental plan benefits, provides access to their DPPO
provider network and the associated provider discounts, manages the fully-insured DHMO plan while
providing access to their DHMO provider network, and makes available detailed claim reports and plan
utilization reporting. In addition, the TPA guarantees compliance with state and federal mandates, including
the Consolidated Omnibus Budget Reconciliation Act (COBRA) and Health Insurance Portability and
Accountability Act(HIPAA).
Group Life(Supplemental Life) and Accidental Death &Dismemberment (AD&D):
The City's current group life insurance program is offered through Hartford Life and Accident Insurance
Company, under Resolution No. 2009-27140, on an extended month-to-month basis. The group life plan
includes Basic Life and AD&D insurance coverage provided to each full-time non-public safety employee
equal to'one (1) times their annual salary, and AD&D coverage to a maximum benefit of $20,000. The cost
of Basic Life and AD&D insurance is shared between the City and the employee, each paying fifty percent
(50%) of the Basic Life cost of coverage with the City paying the full cost for the additional AD&D coverage.
In addition to the mandatory Basic Life and AD&D coverage, the City offers employees the ability to
purchase supplemental life insurance for themselves, their spouses and dependent children.
FMLA Administration, Short and Long-Term Disability, and 401a Long Term Disability:
Currently, the City is operating on a month-to-month basis with Unum Life Insurance Company (Resolution
No. 2009-27141) to manage its disability program and FMLA administration. In.addition to the twelve (12)
weeks of unpaid leave required by the U.S. Department of Labor pursuant to FMLA, the City offers
enhanced benefits of an additional twelve (12) week leave period, if deemed medically necessary. The
FMLA policy provides employees the opportunity for up to twelve (12) weeks of unpaid leave for their own
care or the care of a covered family member due to a medical need. The leave can be taken all at once or
intermittently. Unum's day-to-day management includes medical certification in compliance with FMLA
rules, constant contact with the employee's attending physician to assure the employee returns to work as
quickly as is reasonable and will provide periodic updates to the City's Human Resource Department as well
as departmental contacts.
Employees who are not vested in the Miami Beach Employee's Retirement Plan ("MBERP") are not
provided salary protection should they be unable to work due to a medical disability. For an employee to
receive a disability benefit from the MBERP, the employee must be fully vested in the plan. In addition, the
disability benefit provided by Social Security is not available to an individual who has not contributed to
Social Security in the twenty-four (24) months prior to the date of their disability. As City employees do not
contribute to Social Security, the City offers employees the opportunity to purchase voluntary short and
long-term disability coverage which provides protection should they be unable to work for an extended
period of time due to an illness or accidental injury not related to their employment. The premium for these
plans is fully-funded by the employee with no contribution from the City.
There are approximately 29 employees that were hired prior to March 18, 2006 that are still covered by the
City's Defined Contribution Retirement Plan 401(a). When the City changed the pension benefit(terminated
the 401(a) plan) under the MBERP to include salary protection once fully vested, the 401(a) participants that
decided to remain in the terminated plan lacked this salary protection. The City decided to mirror the long-
term salary protection benefits provided by the MBERP in the current disability program for these 401(a)
participants. This benefit will end when the plan participants terminate or retire. The cost of this benefit is
fully-funded by the City.
Commission Memorandum—ITN 2016-084-WG Administration of the City's Ancillary Health Benefits for Employees,Retirees and Their
Dependents
July 13,2016
Page 3
ITN PROCESS
The ITN was released on April 21, 2016. On June 1, 2016, the City received complete and responsive
proposals from Aetna Life Insurance Company, Cigna, Inc., the Hartford Life and Accident Insurance
Company, Humana, Inc., MetLife, Inc., Minnesota Life (a Securian Company), Reliance Standard Life
Insurance Company, Solstice Benefits, Inc., The Standard Insurance Company, and Unum Life Insurance
Company.
On June 8, 2016 and June 20, 2016 (revised), the City Manager, via Letter to Commission (LTC) No. 250-
2016 and 262-2016, appointed an Evaluation Committee (the "Committee") consisting of the following
individuals:
• Angela Breadwood, Claims Manager, Risk Management Department, City of Miami
• Frank Estevez, Employee Benefits Manager, Human Resources Department
• Salvatore Frosceno, EMS Coordinator, Fire Department
•
• Manny Marquez, Assistant Director, Finance Department
• Natasha Nicholson, Senior Management Analyst, Public Works Department
The following alternates were also appointed:
• James Hollis, Safety Officer, Human Resources Department
• Maria Ruiz, Director, Housing and Community Services Department
• John Shumaker, Deputy Director, Finance Department
• James Sutter, Internal Auditor, Internal Audit Department; and
Ultimately, the Committee was composed of Frank Estevez, Salvatore Frosceno, Manuel Marquez, and
Natasha Nicholson.
The Committee convened on June 23, 2016, to consider all responsive proposals. At the meeting, the
Committee was given an overview of the project, 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 was provided to each member in advance
of the meeting. The Committee was instructed to score and rank proposals pursuant to the evaluation
criteria established in the ITN 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 30
Approach and Methodology 15
The quantitative scoring of the proposers' financial responses was completed by the Procurement
Department. A total of twenty (20) points could be earned by the proposers and added to each of the
qualitative scores produced by the Committee. The best financial proposal response received the full 20
points with a weighted average applied to proposals that were less advantageous to the City. For example, if
proposer 1 bids $100 and proposer 2 bids $150, proposer 1 receives $100 / $100 x 20 = 20 points while
proposer 2 receives $100/$150 x 20 = 13 points.
Evaluation Criteria Total Points
Step 2-Quantitative Criteria
Cost Proposal 20
Veterans Preference 5
The ITN also stipulated that additional points would be added, if applicable, pursuant to the City's Veteran's
Preference Ordinance. However, none of the proposers submitted eligibility information to qualify for these
additional points (5).
Commission Memorandum—ITN 2016-084-WG Administration of the City's Ancillary Health Benefits for Employees,Retirees and Their
Dependents
July 13,2016
Page 4
After the proposers' presentations and interviews, the Committee discussed the proposers' qualifications,
experience, and competencies, and scored the responses in accordance with the qualitative criteria
established in the ITN. Cost points were added to the qualitative scores as applicable. The final rankings are
included in the following tables.
BALANCE OF PAGE INTENTIONALLY LEFT BLANK
Commission Memorandum—ITN 2016-084-WG Administration of the City's Ancillary Health Benefits for Employees,Retirees and Their
Dependents
July 13,2016
Page 5
Group Dental Insurance Services
:Plan A Group Dental
0 N C
N a N
> m Q O
1 2 is ''' LOW
in AGGREGATE
C `o C TOTALS
m a
LL > N
Ranking Ranking Ranking Z Ranking
Aetna Life Insurance Co. 77 3 84 4 70 4 70 4 15 4
Cigna 84 2 97 1 72 1 77 3 7 1
Humana Insurance Co. 67 5 82 5 66 5 59 5 20 5
77 3 92 2 72 1 83 1 7 1
Metropolitan Life Insurance Co.
Solstice Benefits,Inc. 85 1 89 3 71 3 81 2 9 3
Veterans Preference
Veterans Maximum
Proposer Preference Allowable Total Points Awarded* -
Aetna Life Insurance Co. No 5 0
Cigna No 5 0
Humana Insurance Co. No 5 0
Metropolitan Life Insurance Co. No 5 0
Solstice Benefits,Inc. No 5 0
Cost Proposal
Maximum
Allowable Total Points
Proposer Points Awarded'
Aetna Life Insurance Co. 20 20
Cigna 20 19
Humana Insurance Co. 20 17
Metropolitan Life Insurance Co. 20 15
(Solstice Benefits,Inc. 20 18
Commission Memorandum—ITN 2016-084-WG Administration of the City's Ancillary Health Benefits for Employees,Retirees and Their
Dependents
July 13,2016
Page 6
FMLA Administration, Short and Long-Term Disability, and 401a Long-Term Disability:
Plan B Group Disability&FMLA
c c
N N N O
N U ] N
Er O 0 LOW
w Z AGGREGATE
c
o N TOTALS
e c m
u
Ranking rn Ranking Ranking Z Ranking
Aetna Life Insurance Co. 81 4 88 4 70 6 84 3 17 5
Life Insurance Co.of North
America Cigna 77 6 95 2 78 2 78 4 14 3
Hartford Life and Accident
Insurance Co. 79 5 88 4 72 5 85 2 16 4
Metropolitan Life Insurance
Co. 87 94 74 78
2 3 3 4 12 2
Reliance Standard Life
Insurance Co./Matrix 73 7 84 6 74 3 67 7 23 6
Standard Insurance Co. 83 3 67 7 65 7 71 6 23 6
UNUM Life Insurance Co of
America 93 1 97 1 82 93
1 1 4 1
Veterans Preference _
Veterans Total Points
Proposer Preference Maximum Awarded* '
Aetna Life Insurance Co. No 5 0 ,
Life Insurance Co.of North No 5 0
America Cigna _ ,
Hartford Life and Accident No 5 0
Insurance Co.
Metropolitan Life Insurance No 5 0
Co.
Reliance Standard Life 1
Insurance Co./Matrix No 5 0
Absence Mgmt
Standard Insurance Co. No 5 0
UNUM Life Insurance Co of No 5 0 •
America
Cost Proposal
Maximum Total
Allowable Points
Proposer Points Awarded* _ - •
Aetna Life Insurance Co. 20 18
Life Insurance Co.of North 20 17
America Cigna
Hartford Life and Accident 20 17
Insurance Co.
Metropolitan Life Insurance 20 16
Co.
Reliance Standard Life
Insurance Co./Matrix 20 18
Absence Mgmt
Standard Insurance Co. 20 17
UNUM Life Insurance Co of 20 20
America
Commission Memorandum—ITN 2016-084-WG Administration of the City's Ancillary Health Benefits for Employees,Retirees and Their
Dependents
July 13,2016
Page 7
Group Life(Supplemental Life)and Accidental Death &Dismemberment(AD&D):
Plan C Group Term Life and Accidental Death and Dismemberment •
C N C
N a) N O
N U N
7
N Q L
d 2
U_
w m Z LOW
c cc)
AGGREG
u_ TO m ATE
Ranking rn Ranking Ranking Z Ranking TOTALS
Aetna Lite Insurance
Co. 83 3 90 4 74 4 75 7 18 5
Life Insurance Co.of
North America Cigna 86 2 94 2 74 4 86 5 13 3
Hartford Life and
Accident Insurance Co. 76 5 87 5 77 91
2 2 14 4
Metropolitan Life
Insurance Co. 73 7 98 1 78 1 88 3 12 2
Minnesota Life
Insurance Co. 73 7 85 6 74 4 75 7 24 7
Reliance Standard Life
Insurance Co./Matrix 75 82 73 81
Absence Mgmt 6 8 7 6 27 8
Standard Insurance Co. 83 3 83 7 72 8 93 1 19 6
UNUM Life Insurance
Company of America 89 1 94 2 77 2 88 3 8 1
Veterans Preference
Maximum
Veterans Allowable Total Points
Proposer Preference Points Awarded*
Aetna Life Insurance No 5 0
Co.
Life Insurance Co.of No 5 0
North America Cigna
Hartford Life and No 5 0
Accident Insurance Co.
Metropolitan Life No 5 0
Insurance Co.
Minnesota Life No 5 0 •
Insurance Co. -
Reliance Standard Life
Insurance Co./Matrix No 5 0
Absence Mgmt
Standard Insurance Co. No 5 0
UNUM Life Insurance
Company of America No 5 0
Commission Memorandum—ITN 2016-084-WG Administration of the City's Ancillary Health Benefits for Employees,Retirees and Their
Dependents
July 13,2016
Page 8
•
Cost Proposal
Maximum Total
Allowable Points •
Proposer Points Awarded*
•
•
Aetna Life Insurance 20 20
•
Co.
Life Insurance Co.of 20 18
North America Cigna
Hartford Life and 20 20
Accident Insurance Co.
Metropolitan Life 20 20
Insurance Co.
Minnesota Life 20 18
Insurance Co.
Reliance Standard Life
Insurance Co./Matrix 20 17 •
Absence Mgmt •
•
Standard Insurance Co. 20 19
UNUM Life Insurance 20 17
Company of America
In determining responsiveness and responsibility of the firms, the Procurement Department verified
compliance with the minimum requirements established in the ITN, financial capacity as contained in the
Dun & Bradstreet Supplier Qualifier Report, and past performance through client references submitted by
each proposer.
BALANCE OF PAGE INTENTIONALLY LEFT BLANK
•
•
Commission Memorandum—ITN 2016-084-WG Administration of the City's Ancillary Health Benefits for Employees,Retirees and Their
• - Dependents
July 13,2016 •
Page 9 .
•
- FINANCIAL IMPACT
Group Dental Insurance Services
•
With the ranking results producing a tie for the top ranked proposers being Cigna and MetLife, financial and
benefit information was considered in order to determine which proposer to approach first for negotiations.
Cigna is selected as the proposer to enter into negotiations with first based upon this information. •
The DHMO fully-insured premium rates submitted by Cigna are 1.4% lower than the fully-insured premium
rates within the City's current DHMO plan. Based on the City's current DHMO enrollment of employees and
• retirees, the City's approximate annual premium for the proposed DHMO plan is $144,740 or 50% of the total
cost of the DHMO plan. The-annual TPA fee proposed by Cigna for the self-insured DPPO program is $3.47
PEPM which is 10.1% lower than the current TPA fee ($3.86 PEPM). Please note that the TPA fee does not
include DPPO claims which are self-funded, will fluctuate over time, and make up +80% of the total cost of
the program. However, based on the City's current DPPO enrollment of employees and retirees, the
proposed TPA fee, and an estimation of claims, the City's cost for the proposed DPPO plan is approximately
$670,000 or 50% of the total cost of the DPPO plan. All total dollar amounts listed above are on an annual
basis.
Group Life(Supplemental Life) and Accidental Death &Dismemberment(AD&D):
. The top ranked proposer for group life and AD&D coverage is Unum. Unum proposed a premium rate of
$0.120 per thousand dollars of coverage for basic life and a premium rate of $0.015 per thousand dollars of
coverage for AD&D. The proposed premium rates based upon current enrollment and salary information
produce an annual basic life and AD&D premium of$150,028. The City splits the premium.fifty percent (50%)
with the employee for basic life and pays the;entire cost of the AD&D premium for a total annual City
expense of $77,632. There is no financial impact to the City for the supplemental life insurance benefits for
employees, spouses and dependents. The City'makes these voluntary benefit programs available to
employees and does not make any contribution,as these plans are fully-funded by the employee.
FMLA Administration, Short and Long-Term Disability, and 401a Long-Term Disability:
The top ranked proposer for FMLA administration and the group disability program is Unum. The City will not
incur a cost impact'for the short and long-term disability benefits as this coverage is fully-funded by the
employee. For the twenty-nine (29) remaining employees in the Defined Contribution Retirement Plan
401(a), the City will continue to pay the cost of their long-term disability coverage until all members have
terminated employment or•retired. The proposed annual cost to the City to continue this coverage is $5,696.
For FMLA administration, the proposed annual cost is $37,030 based on the current annual head count of
2,071 x $1.49 PEPM (FMLA administration rate quoted)x 12 months. •
CITY MANAGER'S DUE DILIGENCE AND RECOMMENDATION ,
After considering proposals and the results of the Evaluation Committee process, pursuant to ITN No. 2016-
084-WG, for administration of the city's ancillary health benefits for employees, 'retirees and their
dependents, the City Manager recommends that negotiations begin with the top ranked proposers in each
benefit category: Cigna, Inc. for Group Dental coverage; Unum Life Insurance Company for FMLA
Administration, Group Life and AD&D coverage, Short and Long-term Disability, and Long-term Disability for
Defined Contribution Retirement Plan 401(a) participants, further authorizing the Mayor and City Clerk to
execute agreements with the recommended firms upon conclusion of successful negotiations by the
Administration.
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JLM/MT/SC-T/AD/WG •
T:\AGENDA\2016\July\Human Resources\Memo-ITN-2016-084-WG Ancillary Benefits-Final.doc .
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