2002-24945 Reso
RESOLUTION NO. 2002-24945
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE
RANKING OF THE PROPOSALS RECEIVED FOR GROUP
DENTAL BENEFITS PURSUANT TO THE REQUEST FOR
PROPOSALS ISSUED OCTOBER 4, 2001 BY ARTHUR J.
GALLAGHER AND CO., THE CITY'S BROKER, AND
AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE
NUMBER-ONE RANKED FIRM, COMPBENEFITS, TO PROVIDE
GROUP DENTAL INSURANCE AS PROPOSED; AND, IF
SUCCESSFUL, AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE AN AGREEMENT NOT TO EXCEED AN ESTIMATED
ANNUAL PREMIUM OF $500,000; AND IF UNSUCCESSFUL,
AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE
NUMBER -TWO RANKED FIRM, DELTA DENTAL.
WHEREAS, on October 4,2001 a request for proposals for group dental benefits was
issued by Arthur J. Gallagher & Co., with six (6) vendors responding; and
WHEREAS, the Group Insurance Board began meeting on November 15,2001, to review
and discuss the received group dental plan proposals, and recommended that the City renew its
contract with CompBenefits, the City's current group dental provider, with a combined decrease of
3%; and
WHEREAS, the City Manger has reviewed the recommendations of the Group Insurance
Board, and concurs with the Board's recommendation.
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 ranking of the proposals received for group dental benefits pursuant
to the request for proposals issued October 4, 200 1 by Arthur 1. Gallagher and Co., the City's broker,
and authorizing the Administration to negotiate with the number-one ranked firm, CompBenefits,
to provide group dental insurance as proposed; and, if successful, authorizing the Mayor and City
Clerk to execute an agreement not to exceed an estimated annual premium of $500,000; and if
unsuccessful, authorizing the Administration to negotiate with the number-two ranked firm, Delta
Dental.
PASSED AND ADOPTED this
31st
AS TO
FORM & LANGUAGE
& FOR EXECUTION
ATTEST:
jld'vuA~ r~
CITY CLERK
F:IHUMA \$all\COMM,RES\reso-dental-rfp7 -02,doc
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Attachment A
~
~y,
Gallagher Benefit SeIVices, Jnc.
A Subsidiary of Artbur J. Gallagber 8< Co.
June 24, 2002
Mr. Jorge M. Gonzalez, City Manager
City of Miami Beach
1700 Convention Center Drive
Miami Beach. Florida 33139
Re: Medical & DC1nal Renewals
Dear Mr. Gonzalez,
Anhur J. Gallagher, acting as Broker of Record for the City of Miami Beach released a
medical RFP on Augw.'t 29, 2001. ' Proposals were due back. on or before September 28,
2001. The RFP requested medical proposals for PPO HMO and POS type coverage's
similar to those coverage's currently being offered by the incumbent camer, Humana. .
The RFP included background as to the City's current coverages and demographics
including descriptions of the active, pre-Medicare retirees and post Medicare retirees and
all current plan designs. Proposals were also requested on both a fully insured and self
funded basis to insure a complete market review.
Subsequent to the issuance of the medical RPP, aJ. the City's request, an addendum to the
RFP was issued on October 4, 2001 requesting proposals for dental coverage. A listing of
the nineteen vendors solicited for both coverages is as follows:
Medical &, Dental: Aetna USHealthcarc Lincoln R.e
AvMed Sun Life
Blue CrossIBlue Shield United Healthcare
CIGNA ASI
HIP Health Plan of Florida Benesight
Humana Covenant AdministralOI'll
"'lorida Health Admini~tnUors
Dental Only:
ADP/CompBenefits
Ameritas
Delta Dental
Guardian Life
Paragon Dental Services
Protective Life (Denricare)
Attachment A will provide a complete listing of vendors solictated and a brief desCription
of how the carriers responded.
The Group Insurance Board consisting of the following persons met initially on
November IS, 2001 to review and discuss the proposals:
One Boca Pltn:&
2265 GIaCl811 AOlld, Suile 400 E
Boc.a Rilton. FL 33431
5111.995.6706
Fax 561.995.6708
www.aj!}.com
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Mary Greenwood, Labor Relations
T.C. Addcriy, Human Resoun:es
Buddy Dresner. Retjree
Richard McKinnon. CW A President
Andrew Terpak. Fleet Management
r .cwis Peoples. ASFCME
Robin Garber, OSA
CIiLTLeoaard. Risk Management
The Medical and Dental evaluation process included lhe following criteria:
1) Cost - Rates including overall cost and rate guarantees
2) Benefits Provided - Plans offered including copays, out-of-pocket, reimbursement
levels and any coverage limitations
3) QualifiCfltions - Client references, A.M. Best Ratings competency of assigned
team. Customer Service and experience wilh employers of similar size
4) Technical- Response to RFP including requirements, completion of required
forms and any additional data requested..
5) References - Review of current client satisfaction levels
6) Network. Capability - Size ofneLwork including adequate coverage for all
employees, availability ofpmviders and their satisfaction levels as providers.
The detailed financial comparison (Attachment B) has been summari7.ed in the following
exhibit:
omments
The insurance committee began discussions regarding the RFP responses on November
15, 2001. That and subsequent meetings produced the tollowing conclusions:
The RFP process produced only one fully ins\aed proposal offered by !he incumbent
carrier Humana. All other proposals were submitted On a self-insured basis. Jt was
determined this low response was due to several tactors. First, the City's current 50%
contribution levels produced carrier concerns relative to adverse selection. The young
healthy new hires would not take the insurance due to cost. Secondly, retirees account
48
for approximately 50% of the employee population and represent the highest loss ratio
willrln the three identified groups. Also, it would indicate Humana renewal rates were
competitive with ~ (;urrent healthcare marketplace. Humana's proposed renewal
increase of 27 . 78% was lower than all other altc:male proposals received.
After reviewing both the financiaJ analysis and the benefit comparisons tor all
submissions, we concurred with the evaluation committee that Humana provided the best
overall proposal utili:.dng the prcdclt:I'Dlined evaluation criteria.
In addition. we TCCommr,ntt the City offer additional plans 10 the currently cov~
employees. The offering of optional plans with 4igher out..of-pocket costs, will provide
the City with more control of plan costs and the employees will have more choice an,d
financial control over how their healthcatC is delivered. .
Proposals were received for Dental benetits Uom the incumbent ADP/CompBenems.
Paragon Dental, Delta Dental and CIGNA. All vendors provided DMO and. IndemniLy
proposals ancmpting to match existing benefits and offering alternate benefit levels
producing cost scenarios. See attachments C, D and E for detailed benefit, cost and
provider analysis. CIGNA was eliminated from tile evaluation process due Lo
significantly high-proposed costs. UsiDg similar \}valuation criteria to that of the medical
review, it was determined ADP/CompBenefits, Delta Dental and Paragon Dental would
be invited to meet with the evaluation committee to discuss their proposals in detail.
These m=tings resulted in ADP/CompBenefits bcing ranked first and Delta Dental
ranked second. While Delta provided benefit-enhan.ced alternatives. current and future
costs concerns of both dental and medical played a part in the decision. With that in
mind. Gallagher agreed with the commIttee's fmdings for the following reasons:
1) ADP/CompBenetits reduced cunent benefit costs 14%. Richer benclits were
provided as an alternative at additional cost., which can be negioated.
2) ADP/CompBenefirs provided the lowest cost plan when comparing cuxrent
~nefit levels
3) Network providers meet CUJTent needs and the addition of additional local
providers can be negotiated.
The committee evaluation scoring is also included as anaclunent I~.
Should you have any questions or wish to discuss any of the areas mentioned, please
don't hesitate to contact me at S61-995"()706.
CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
m
Condensed Title:
Dental Insurance Renewal for 2002/03 plan year.
Issue:
Accept the recommendation of the Group Insurance Board/Evaluation Committee regarding RFP's issued
for Dental Insurance,
Item Summary/Recommendation:
The Group Insurance Board recommended renewing the dental plan with our current provider
CompBenefits, with an estimated annual cost to the City not to exceed $250,000,00, Both the DMO and
PPO renewal plans provide a higher level of payment to the dentists, a higher annual maximum increased
from $1,000.00 to $1,500.00 and overall 3% lower cost to both the City and the employee, The
Administration recommends accepting the Group Insurance Board's recommendation,
Advisory Board Recommendation:
The Group Insurance Board recommends renewing with our current Dental carrier, CompBenefits,
Financial Information:
Source of
Funds:
~
Finance Dept.
250,000.00
City Clerk's Office Legislative Tracking:
I Mary Greenwood
AGENDA ITEM
R7E
1-3/-02-
DATE
CITY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.ci.mlami-beach.f1.us
To:
From:
Subject:
COMMISSION MEMORANDUM
Date: July 31,2002
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez \~'
City Manager 0 U
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ACCEPTING THE RANKING OF THE
PROPOSALS RECEIVED FOR GROUP DENTAL BENEFITS PURSUANT
TO THE REQUEST FOR PROPOSALS ISSUED OCTOBER 4, 2001 BY
ARTHUR J. GALLAGHER AND CO., THE CITY'S BROKER, AND
AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE
NUMBER-ONE RANKED FIRM, COMPBENEFITS, TO PROVIDE GROUP
DENTAL INSURANCE AS PROPOSED; AND, IF SUCCESSFUL,
AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN
AGREEMENT NOT TO EXCEED AN ESTIMATED ANNUAL PREMIUM OF
$500,000; AND IF UNSUCCESSFUL, AUTHORIZING THE
ADMINISTRATION TO NEGOTIATE WITH THE NUMBER-TWO RANKED
FIRM, DELTA DENTAL
ADMINISTRATION RECOMMENDATION:
Adopt the Resolution.
ANALYSIS:
As a result of the RFP issued on October 4, 2001 for dental insurance, six (6) vendors
were solicited (Gallagher & Co.'s summary letter is attached). The Group Insurance
Board/Evaluation Committee met initially on November 15, 2001 to review and discuss the
proposals and to determine evaluation criteria. The criteria consisted of Cost, Benefits
Provided, Qualifications, Technical, References and Network Capability.
Proposals for Dental benefits were received from CompBenefits, Delta Dental, Paragon
Dental and CIGNA. CIGNA was eliminated from the evaluation process due to high-
proposed costs. The other three companies were invited to make presentations to the
evaluation committee. As a result of these meetings, CompBenefits was ranked first and
Delta Dental second. Current and future cost concems were a major part of the decision.
Arthur J. Gallagher & Co. concurred with the committee's findings for the following
reasons:
1)
2)
3)
CompBenefits reduced current benefit costs by 14%. Higher benefits
were provided as an alternative at an additional cost.
CompBenefits provided the lowest cost plan when comparing current
benefit levels
Network providers meet current needs and the addition of additional
local providers can be negotiated.
CompBenefits has offered an upgraded DMO (Dental Maintenance Organization) and an
upgraded PPO that would provide higher benefit levels to the providers and still result in
an overall 3% decrease in cost from the previous year to both the City and the employee,
with an estimated annual premium not to exceed $500,000 to be shared equally by the City
and the members of the plan. The Administration also did an analysis of the
reimbursement amounts provided under the plans offered by both CompBenefits and Delta
Dental in an effort to ascertain if the difference in the higher premium cost of Delta Dental
(estimated at $530,281) was supported by higher reimbursements per procedures,
Following are the rate comparisons effective October 1, 2002:
EMPLOYEE MONTHLY RATES
DMO PPO
COMPBENEFITS DELTA COMPBENEFITS DELTA
CURRENT NEW PROPOSAL CURRENT NEW PROPOSAL
EMPLOYEE $5.18 $4,93 $5,96 $11,02 $11,01 $12.48
EMPLOYEE +1 $9.68 $9.20 $9,82 $21.26 $21,24 $22.06
FAMILY $12,60 $11.97 $14,54 $32.58 $32,55 $36.88
Both of the CompBenefits plans, DMO and PPO, provide an increased number of
providers and higher reimbursement amounts to the dentists than the current plan. Under
the PPO plan, the annual maximum the plan will pay a participant will increase from $1,000
to $1500. In addition, those employees already participating in the CompBenefits plans
will automatically receive these higher level benefits. Only those employees that wish to
make a change, or those that now wish to participate, and are eligible, will have to
enroll.
The Administration recommends renewing our contract with our current dental provider,
CompBenefits, upgrading our current DMO and PPO plans to the higher level plans
offered.
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MEMORANDUM OF UNDERSTANDING (MOU)
AND
AGREEMENT
BETWEEN
COMPBENEFITS CORPORATION
AND
CITY OF MIAMI BEACH, FLORIDA
It is hereby understood and agreed by the undersigned parties this 211f'\ day of ~ ,
2002, that CompBenefits Corporation a Florida Corporation having its principal offices in
Atlanta, Georgia, and the City of Miami Beach, Florida (City), shall enter into a mutual
agreement to provide a Dual Choice Dental Plan for all full-time City employees.
It is agreed that CompBenefits will provide the following:
1. A Dual Choice Dental Benefits Program, which consists of a Network Based
Dental Care Plan through CompBenefits (CSI50), and an Indemnity Dental Plan
underwritten by Security Life Insurance Company of America and CompBenefits
Insurance Company (SL V -PPO), with the following monthly rates guaranteed for
one (1) year from the effective date of the this MOD, which shall be October 1,
2002:
Managed Care Dental Plan:
CS150
Employee Only
Employee + One
Employee + Family
$9.86
$18.40
$23.94
Indemnity Dental Plan:
SL V -PPO
Employee Only
Employee + One
Employee + Family
$22.02
$42.48
$65.10
2. Brochures and all marketing materials necessary for enrollment.
3. A current list ofCompBenefits Preferred Providers for all work locations
1
.
,/
4. A Preferred Provider Network reasonably suitable for handling the
employee/patient flow.
5. Employee Identification Cards to be mailed to the employee's residence.
6. Employee Certificate of Benefits to be mailed to the employee's residence.
7. Ample supplies of applications and marketing materials for all new full-time City
employees.
8. Coordination with management during on-site enrollment when possible by
CompBenefits personnel where permitted.
9. Verification of all enrolled employees to be supplied to the group as requested (by
CompBenefits) upon fifteen (15) days written notification.
10. Retired City employees, surviving spouses, and terminated employees have the
right to convert to an individual network based dental care plan.
11. Expeditious handling and judicious settlement of all claims for indemnity benefits
from the CompBenefits Office.
12. Managed care dental plan rates and benefits are for the Plan Year, October IS\
2002 through September 30th, 2003. fudemnity dental plan rates and benefits are
for the Plan Year, October 1 st, 2002 through September 30th, 2003.
It is further agreed that The City shall agree to the following:
1. Coverage will be effective on the first of the month following an employee's full-time hire
date provided that the application for coverage is received by the CompBenefits Office by
the 15th of the preceding month.
2. Applications submitted to the CompBenefits Home Office after the 15th of any month will
have a coverage effective date ofthe 1 st of the next succeeding month.
3. Premiums for renewals on existing employees must be received by the CompBenefits Office
no later than the 20th of the month of coverage.
Termination of Aereement bv City:
The City has the right to terminate this Agreement at any time without cause and/or its
convenience by providing one hundred and twenty (120) days prior written notice to
CompBenefits.
2
.-
Termination of A2reement bv CompBenefits:
CompBenefits has the right to terminate this Agreement by providing sixty (60) days
prior written notice to the City. However, for non-payment of premium, CompBenefits
has the right to terminate by providing a thirty-one (31) days prior written notice.
Signed and Agreed this day 21-niof ~ 2002.
CompBenefits Corporation
City of Miami Beach, FL
Title: David Dermer, Mayor
q/Z'i/o"Z-
IJcf-o ~ ').., !}.tJfJr
DJIk~ faAtk-
Robert Parcher, City Clerk
APPROVED ~ TO
FORM & lANGUAGE
& FOR EXECUTION
Date
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