Item 5H-5LITEMS 5H – 5L
Approve contracts to provide employee insurance benefits
Background
RFP issued May 2006 for employee benefits to include:
Medical
Dental
Group Life (basic, voluntary, AD&D)
Long term disability (LTD)
Flexible Spending Accounts (Section 125)
Vision coverage
RFP Process
Proposals received June 26, 2006
28 companies provided 57 proposals for various benefits
Evaluation Criteria:
Experience and reputation (30)
Schedule of benefits (20)
Rates (30)
Network access / penetration (10)
Reporting / cost management (10)
ITEM 5H
Approve a contract with Aetna to provide employee medical benefits
Aetna – medical benefits
(3) bids received – Aetna, UHC, BCBS
Aetna, UHC invited for finalist presentation
Highlights:
Aetna initial proposal 22.9% inc.
Same as current plans (HMO, PPO)
UHC proposal
less benefits, retiree rates separate, single option PPO
Aetna – medical benefits
Aetna proposal after negotiation: 7.3% inc.
Modest increase in co-pays, deductibles
Incorporate most recent claims data favorable to City
Concession from Aetna for multiple lines of coverage
Advantages to stay with Aetna:
Best plan benefits with lowest cost
Very good customer service over past two years
Less disruption to employees
(Aetna provider for 9 of last 10 years)
Advantage to have medical and dental with one carrier
Within budgeted amount for FY2006-07
Estimated annual premiums of $1.61 million (City and employee)
Approval of contract with Aetna to provide employee medical benefits
Staff Recommendation: Approval
ITEM 5I
Approve a contract with Aetna to provide employee dental benefits
Aetna – dental benefits
(15) bids received
Aetna proposal: 4.0% inc.
Highlights:
Same as current plan
Offers DMO/PPO option and ability to switch
Discount on medical rate
Within proposed budget for FY2006-07
Estimated City cost: $74,252 annual
Approval of contract with Aetna to provide employee dental benefits
Staff Recommendation: Approval
ITEM 5J
Approve a contract with Standard Insurance Company to provide employee basic and voluntary group life and AD&D insurance benefits
Standard Insurance – group life and AD&D
(10) bids received
Standard offers best benefit package with lowest cost
Highlights:
Open enrollment period for employees, dependents
“Line of duty” benefit for police and fire
Up to additional $50,000 for police, fire personnel killed in line of duty
City Cost $0.01/$1000 = $100 / month
Total proposed rate less than current rate
Savings of approximately $4,000 / year
3-year rate guarantee
Within proposed budget FY2006-07
Estimated City cost: $14,692 annual
Approval of contract with Standard Insurance Company to provide employee basic and voluntary group life and AD&D insurance benefits
Staff Recommendation: Approval
ITEM 5K
Approve a contract with CIGNA to provide employee long term disability (LTD) benefits
CIGNA – LTD benefits
(4) bids received
CIGNA offers best benefit package with lowest cost
Highlights:
Comparable benefits to current plan
Proposed rate less than current rate
Savings of approximately $4,100 / year
2-year rate guarantee
Within proposed budget for FY2006-07
Estimated City cost: $25,200 annual
Approval of contract with CIGNA to provide employee long term disability (LTD) benefits
Staff Recommendation: Approval
ITEM 5L
Approve a contract with Total Administrative Services Corporation (TASC) to provide employee flexible spending account (Section 125) benefits
TASC – Section 125 Administration
(4) bids received
TASC offers best administration benefits with lowest cost
Highlights:
Additional benefits over current plan
FSA debit cards, direct deposit of reimbursement checks
On-line enrollment, self-service
Proposed costs less than current provider
Savings of approximately $1,000 / year
2-year rate guarantee
Within proposed budget for FY2006-07
Estimated City cost: $4,478 annual
Approval of contract with Total Administration Services Corporation to provide employee flexible spending account benefits
Staff Recommendation: Approval
QUESTIONS?