C7J-Accept Recommendation-Issue RFP Wellness Program For City EmployeesCOMMISSION ITEM SUMMARY
Condensed Titles:
A resolution of the Mayor and City Commission of the City of Miami Beach, Florida, accepting the
recommendation of the Finance and Gitywide Projects Committee to issue a Requestfor Propoposal
(RFP) for a wellness program as a component of the employment benefits with the City of Miami
Beach.
Item Summary/Recommendation :
Ensure expenditure trends are sustainable over the long run
@s,thoseproVentoyieldareturnoninvestment(Rol),containavarietyofincentives,
and eventually make participation a requirement. According to industry experts, the only proven methodology that yields
a real ROI is io require participation and use health care coverage premium reductions as the primary incentive.
ln an environment where most employees belong to collective bargaining units, terms and conditions of employment are
mandatory subjects of bargaining, therefore, a wellness program that provides incentives and requires participation is
subject to negotiation. Four of the City's collective bargaining agreements expire September 30, 2015, and the fifth
expires April J0, 2016. Should the City decide to pursue a wellness program that requires participation and includes a
health care insurance premium reduction incentive, the matter would be a bargaining priority for the Administration.
Discussions with industry experts indicate that when organizations offer such programs, five to ten percent of the already
healthy employee population takes advantage of them. lf the wellness program includes incentives of value to
employees, maybe there is a 20 percent participation rate, which is not enough to result in an ROl.
There is little agreement on the timing and magnitude of the return on investment on a wellness program. There is,
however, agreement that a seventy to eighty percent participation level is needed to generate a successful ROl. That
participation level is achievable when premium reductions are included as an incentive. Premium reductions need to be
taken into consideration when calculating the ROl.
The Administration recently met with representatives from Engagement Health and Humana Vitality, who were the only
respondents to the wellneis component of the RFP issued in 2012. Based on the RFP submittals, presentations and
subsequent question/answer sessions the Administration is comfortable that a wellness program basedonincentives
could be implemented for a costs of approximately $4.46 per employee per month; approximately $53,000 for the 978
employees who avail themselves of health coverage through the City. This was submitted to the Office of Budget and
Performance lmprovement as a potential enhancement for FY 2014115.
Given that it is two years since the last RFP was issued, and given that the RFP issued at that time was more
comprehensive focuiing on health benefits and health care administration, with wellness as a small component,
Gallagher believes that we would receive substantially more proposals were the City to issue a new RFP. Further, the
RFP -scope would include a multi-year program that eventually results in mandatory participation by glL general
employees, includes health care plan premium reductions as its primary incentive, and yields a significant ROI in year
three.
-Every
indication is that such a revised RFP will yield responses from more vendors that those who responded to
the oriqinal RFP.
Financial !nformation :
Source of
Funds:
Amount Account
1 $53,000 540-1791-000312
2
OBPI Total
Financial lmpact Summary: Funds are already included in the FY 2014115 operating budget
Sylvia Crespo-Tabak, Human Resources Director
Department Director Assistqpt City Manager fi City Manager
Sylvia Crespo-Tabal5.
&'t
KathieG)F >oks Jimmy L. IV ales
YA
A6EF$DA weu C 7rTE AATAMTBEACH s*'re ?'/o-/{257
::
Ciry ol Miomi Beoch, IZOO Convenlion Center Drive, Miomi Beoch, FL 33.i39, www.miomibeochfl.gov
COMMISSION MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
Wetlness Program as Component of the Employment Benefits with the City
of Miami Beach
Recommendation
At the August 13, 2014, Finance and Citywide Projects Committee (FCWPC) meeting, staff
recommended including a wellness plan as a component of the employee benefits with the City
of Miami Beach for the reasons provided below and Committee members approved. Therefore,
the Administration recommends adoption of the resolution accepting the FCWPC's
endorsement of this program.
Backqround
Health care costs have been rising approximately eight percent per year and are becoming one
of the most expensive employment benefit organizations are facing. ln an attempt to control
costs, if not reduce, many employers have introduced wellness programs with mixed results.
Wellness program proponents and industry experts state that 75 percent of health care dollars
go toward the care of chronic illnesses and that 50 percent of those costs are preventable. The
critical factor, however, is engaging employees and motivating them to commit to lifestyle
changes that result in better health, ergo, lower health care costs.
Well-designed wellness programs, those proven to yield a return on investment (ROl), contain a
variety of incentives, and eventually make participation a requirement. According to industry
experts, the only proven methodology that yields a real ROI is to require participation and use
health care coverage premium reductions as the primary incentive.
The City contracts with Humana for wellness as part of the administration of its self-insurance
plans. Humana has been providing annual biometric screenings through the City's wellness fair.
ln an ongoing effort to promote health and wellness, Humana will continue to provide these
screenings, up to 200 participants, assuming the City remains a medical administrative services
only (ASO) client of Humana.
ln addition, flu shots, provided only to employees covered by the City's Humana health care
plans and the most popular factor of the wellness fair, are coordinated by Walgreens and billed
through the Humana claims system and are reflected in the City's claims experience.
The City's wellness seminars have had little employee participation, not unlike other wellness
programs without incentives.
Mayor Philip Levine and City Com
Jimmy L. Morales, City Manager
September 10,2014
issioner
t\ec-.-rr-eo -p,IJ!,i.i -,'-\,rr/c/. rubl. )€',.:e, lju.--le :,:; 1' :. ,? ^ \.)l::';,,' -" ,:a'J : -oa' .;: :";'1 ..^r ' i,
258
Commission Memorandum
Accepting Committee Recommendation Regarding City Wellness Program
Page 2 of 4
September 10,2014
Collective Barqaininq lmplications
ln an environment where most employees belong to collective bargaining units, terms and
conditions of employment are mandatory subjects of bargaining, therefore, a wellness program
that provides incentives and requires participation is subject to negotiation. Four of the City's
collective bargaining agreements expire September 30, 2015, and the fifth expires April 30,
2016. Should the City decide to pursue a wellness program that requires participation and
includes a health care insurance premium reduction incentive, the matter would be a bargaining
priority for the Administration.
The City has 1,705 employees eligible for health care benefits. lf you remove the 524 (31
percenti employees covered by the lnternational Association of Firefighters (IAFF) and the
Fraternal Orderof Police (FOP), who have their own health trusts, 978 of the resulting 1,181
eligible employees avail themselves of coverage afforded through the City. Of the 1,181
employees, collective bargaining units cover 724 employees, of which 595 have insurance
through a City plan.
lncluding IAFF and FOP bargaining unit employees is an added bonus given that a wellness
program-s goal is to have healthier employees. However, should they not participate, because
of provisions in their respective contracts regarding their premium contributions, the City would
stili benefit if negotiations with units representing general employees are successful. General
employees represent 69 percent of employees eligible for health care coverage.
Analvsis
Discussions with industry experts indicate that when organizations offer such programs, five to
ten percent of the already healthy employee population takes advantage of them. lf the
wellness program includes incentives of value to employees, maybe there is a 20 percent
participation rate, which is not enough to result in an ROl.
Base components of wellness plans include the following:
o Health Risk Assessment (HRA)
o lncentiveAdministration. Weight Loss/Nutrition Programs. Walking. PhysicalActivity. Stress Reduction. Smoking Cessationo Health Coaching
Additional Components may include Biometrics and On-Site Health Coaching
Return on lnvestment (ROl)
There is little agreement on the timing and magnitude of the return on investment on a wellness
program. There is, however, agreement that a seventy to eighty percent participation level is
needed to generate a successful ROl. That participation level is achievable when premium
reductions lre included as an incentive. Premium reductions need to be taken into
consideration when calculating the ROl.
259
Commission Memorandum
Accepting Committee Recommendation Regarding City Wellness Program
Page 3 of 4
September 10,2014
Proqram Phasino
Wellness programs offer proceed through varying levels of engagement and participation:
. Programs similar to those offered by the City resulting in up to 10 percent participation
o lncentive programs
o Incentive programs in combination with mandatory health assessments
o lncentive programs, mandatory health assessments and premium reductions, resulting
in participation levels as high as seventy to eighty percent
Wellness Program Request for Proposals
As part of the review process for the City's medical plans in FY 2012113, the City's benefit
consultant, Gallagher Benefit Services (Gallagher), issued a Request for Proposal (RFP) to
health care vendors for plans with cost containment features, including wellness programs.
The Administration recently met with representatives from Engagement Health and Humana
Vitality, who were the only respondents to the wellness component of the RFP. Based on the
RFP submittals, presentations and subsequent question/answer sessions the Administration is
comfortable that a wellness program based on incentives could be implemented for a costs of
approximately $4.+O per employee per month; approximately $53,000 for the 978 employees
who avail themselves of health coverage through the City. This was submitted to the Otfice of
Budget and Performance lmprovement as a potential enhancement for FY 2014115.
Given that it is two years since the last RFP was issued, and given that the RFP issued at that
time was more comprehensive focusing on health benefits and health care administration, with
wellness as a small component, Gallagher believes that we would receive substantially more
proposals were the City to issue a new RFP.
Further the RFP scope would include a multi-year program that eventually results in mandatory
participation by all general employees, includes health care plan premium reductions as its
primary incentive, and yields a significant ROI in year three. Every indication is that such a
reviseO RFP will yield responses from more vendors that those who responded to the original
RFP.
ln addition, implementing the wellness program in phases will allow the City and collective
bargaining units time to negotiate while orienting employees to the benefits of participation, at
minimum as it relates to having a healthier lifestyle and interacting with a provider.
Recommendation
At the August 13, 2014, Finance and Citywide Projects Committee (FCWPC) meeting, s_tlff
recommended including a wellness plan as a component of the employee benefits with the City
of Miami Beach for the reasons provided below and Committee members approved. Therefore,
the Administration recommends adoption of the resolution accepting the FCWPC's
endorsement of this program.
Attachtflents
lnrx$rsc-r
260
Commission Memorandum
Accepting Committee Recommendation Regarding City Wellness Program
Page 4 of 4
September 10,2014
ATTACHMENT 1
Example of A Successful Proqram: Lubbock lndependent School District
The Lubbock lndependent School District (LISD) implemented its wellness plan in 2010. The
LISD's wellness plan is independent from its medical plan carrier and managed by pforymWELL
who tracks employee participation, manages all screenings, and interacts with employees
regarding resources to help them achieve better health.
To encourage employee participation, the LISD wellness plan provides incentives in the form of
reductions to the employees' health care insurance premiums.
o $25 premium reduction each month for completing the HRA,. $25 premium reduction each month for undergoing a biometric screening, and
. $25 premium reduction each month for participating in at least three educational
seminars each year provided by the wellness plan related to improving a current health
condition or promoting health habits.
Employees may earn a maximum premium reduction incentive of $75 per month, with an annual
premium reduction totaling no more than $900.
The LISD has about 3,500 employees in fifty-eight locations. Approximately 2,700 employees
(77 percent) participate in the wellness program indicating that the premium reduction
investment works. ln the four years since implementation, the LISD has seen savings in their
health plan claims of approximately $6 million with related wellness plan costs of $2.65 million.
261
Attachment Z
aa
tUzJJ
TU
=Mo
LL
tU
U)
O
262
'I ri
'!tais#
,,i&r .i
l&*€
t;.3&!*t
.r{&.. 4i{
r'*'e,?.
-:
_r;,.
taa,,,,
(U
l-
(na
(u
l-
o_
Eoo
_o
l'
.9p
-c
(u
fUr
oa.U
l-(UflJ
Xl-(uo
(UE+)((o_-ro-)(roF
ttr ]- L# s Y, g{
-r)(L)(U0)o;.(no-ho;-ogl
|/..ur-c{
-bo=_oo'=ur-)rc-i-22a 9;.gpEEao);-cEBO111l-!-ExsgFEooo:eE
Eo-cm
.rrii !l
d/
ewffip"
4r*.4ifr
fl .f 1i
@.s;*.
',r {!ft&it
'rl taari;
.4.:,f:.:if
.!10xxxxRor-Lo'f;.i Ln r{ r\t c{
oaaoo
263
,j!
*;J
"p
.p ...
L,]-:
o)
l5 .,:
|'I ri
264
#
l-
_o
:ep
-LU
a
-o
(-L.E
r
-
;
C
(u
(u
l-&+r
l-+
=3 E
$oFaa
(u
C
-(u
3
o
l- +)o(uEb0C-U0J :)
l-L-
.* 'ff
-C -(}ft0JaET
_96
oo
265
ao
=aa
--
-
,#,
wo(J
E6
=Groa$(l)
.go
oEo
266
C i-lo 'rl lll:t If J (r' '.l -..- -Z : '' r,.r
u1 1', 1t ,
I
{srrt ILIJO 0r r";Itlt :.::I r!
a-1'l!r
u, t, L
i_
lt.
illl
'.tl
- t.tl;rLi: r'l) ll.?'Y.L
C 'l' 'l'
O, a.- rrJ
f"-- 1. i-:
267
l-
-J
-c 9,pE:9gto;=EgE.g
.E bEE-c oFn t-la\a,'ghE a
O a X-c (D +lo Erl
S r-'=
=*.d e
flt !i- l--Y ,-\ I
A.Y afr9s
=E o\J.41l-!-= # O!Jr.u-
'- a --'= H E .9''; i6 = -sFuroa
=oEAEEEE
268
tl-o
+, tLcb
9roFo\E ,-\
EE,. j5
-}n o-o5
l- +rI- l-l-#0)
cq)$a9cL-
-
I--(E/,
6uOP
oO,A
E€ S
-L' oOc+,Et-h=o, H o-oE EEE
E aE E66Lii .: ^8EE8EE 2'i,,h
= (u-o 3, gg
$H (U .= O O\v 9-o-o(roo ?E;s. . . @ Eo
q)E
)E
.g
.g.E
3
at-oEt-o
.9,E
o
o
q-o
t-o
-o
E
JC
$+Foo()426doOC
P8b.A +'
OF
Silod5c{
,9, Eg,g)(l)6
h)a..i-U
-.sdo6
.g
a
CNj
q)
.C*t
.g
aaoCE
.E
-o
BoE
269
I 9=
=6 (IIsEE ; g
- N ?i-'=co$
o'-Etr-
=o 19Erq 5E
g 6 uE-oc R-Y'E q= *9aE: EI
=,!\ o\ =l Ou+ 8l=t r- 0.ll =3g 3EC C OI ^EE ol a:t$ = -oi =i,d bfil98 Let
=(U 0=ia I ;:;a. P 5lo-) i oi+' nl El#E 3El xi5 E ol El e,
270
0)
-.ts,
.=
Ft-l LLl +r.-l ,Fcl rol'
ol ?x
3l b s
slE s,
Al-l-r_0-z$ E^EEebo(JO;Eo)G o(u(JO
-l-ts E.Cs f;E
E u; o{-o.Coc+'c$o(- -ts,
-F:
-l)ROE r))
#t l- L-
t ll .-ru$ooo,+al-(trJFCo=o
E '.8+J a c).!9 u) u)o oE
o
EaOOape
*F *9aFo #=oLAt- J'JN$
-!E
C(o-co.=lotEol oEI E
'-l o(ul o-gl b:l so)Hl oo)H \EEI 8Et E:E',E9G)-o E9If,--
.= xrF= ocl-l--o o-to<€
271
ltQ*
oJ.o
PU
:=!v J
U)f\o=^fra:/ E-afoa) a)Eo-
-L#l9 ;
-L:,.*P9E 'n-ag-LJ
--g Ea) -c rrl =9al-EEE E Efr:.:=-\J-
6c^; !-x-v€r:P q1 :l rs cr\ -!l\ a SJ OE \d;;=z
=.^='u P
-
(}r 91 >-
.O-!J=
<:-a *U6:-=av
v
U v,-- /t,
O -E)
vtH
-
!,3*...5g.EO(oo-
PA'E5
E
ca,
l,rFrrtc)tJ
!4orll
=
L.,ur*6
FL'rgoc
cr
-e€
U:xH;l6v>
F(}1-
nllr;onl
Ivlrltl-
l-rrt
crult
G,
::,
lrt
-l-
&
r/r]-rr.|()L'
rrt:rIl-u,
TNs(3
crtul-
E
IFrrlrrl
272
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CIry OF
MIAMI BEACH, FLORIDA, AGCEPTING THE RECOMMENDATION OF THE
FINANCE AND CITYWIDE PROJECTS COMMITTEE TO ISSUE A REQUEST FOR
PROPOSAL (RFP) FOR A WELLNESS PROGRAM AS A COMPONENT OF THE
EMPLOYMENT BENEFITS WITH THE CITY OF MIAMI BEACH.
WHEREAS, at the August 13,2014 Citywide Projects Committee (FCWPC) meeting, the
Administration presented the benefits of a wellness program (Program), as a component of the
employment benefits with the City of Miami Beach, which would yield eventual savings to the
health plan and provide the benefits of a healthier work force; and
WHEREAS, the FCWPC considered and deliberated on the Administration's
recommendation regarding the incentives associated with a wellness program, required
employee participation and an eventual return on investment and recommended that Staff work
with Gallagher Benefit Services, lnc., the City's third party benefits administrator, to develop the
criteria for the scope of said Program and pursue the issuance of a Request for Proposals
(RFP) for said Program; and
WHEREAS, the Administration recommends that the City Commission approve and
authorize the issuance of the RPF for a wellness program, based upon criteria to be determined
by the Administration as being in the best interest of the City.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CIry
COMMISSION OF THE GITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby accept the recommendation of the Finance and Citywide Projects
Committee to issue a request for proposal (RFP) for a wellness program as a component of the
employment benefits with the City of Miami Beach.
PASSED AND ADOPTED this 1Oth day of September,2Ol4.
ATTEST:
Philip Levine, Mayor
Rafael E. Granado, City Clerk
,8['',XgYit8!&'
['ici,i E*ecuToN[,b;l; qyg
Dote
273
THIS PAGE INTENTIONALLY LEFT BLANK
274