title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a Contract with Cigna for Third Party Administration Services of the Medical, Wellness, and Dental Plans, MaxorPlus for Pharmacy Benefit Management, and SunLife for Group Life and Long-term Disability Insurance
Summary
MEETING DATE: August 20, 2013
DEPARTMENT: Human Resources
Purchasing
CONTACT: Tadd Phillips, Director of Human Resources
Erin Boddie, CPPB, Contract Administrator
RECOMMENDED CITY COUNCIL ACTION:
· Approval of Resolution.
ITEM SUMMARY:
· This Resolution authorizes contracts with Cigna for Third Party Administration Services of the Medical, Wellness, and Dental Plans, MaxorPlus for Pharmacy Benefit Management, and SunLife for Group Life, AD&D, and Long-term Disability Insurance effective January 1, 2014.
BACKGROUND INFORMATION:
· The City of McKinney issued a request for proposals (13-30RFP) for Health & Welfare Benefits, in June 2013.
· Bid opening of 13-30RFP was held on July 11, 2013.
- Total of twenty eight (28) bids were received.
- IPS Advisors, the City's benefits consulting firm, reviewed the proposals based on the following criteria set forth in the RFP:
Medical, Dental, Pharmacy Benefit
- Cost
- Cost Containment/Innovative Solutions
- Population Health Management Programs
- Communication
- Claims Processing
- Integrated Systems/Technology Initiative
- Past Performance
Wellness, Life, AD&D, and Disability Insurance
- Cost of Services
- Reporting
- Technology Capabilities
- References/Relevant Services/Explanations
- Enrollment/Communication Materials
· IPS Advisors provided their analysis and recommendations to the committee of six (6) staff members consisting of representatives from Human Resources and Finance departments.
- The committee interviewed the finalists recommended by IPS Advisors and conducted a thorough review of their analysis.
· Of the twenty eight (28) firms that submitted bids, the following three are recommended as best evaluated proposals:
-
- Cigna for Third Party Administration of the Medical and Dental plans, and Wellness Program
- MaxorPlus for Pharmacy Benefit Management (current incumbent)
- SunLife for Life & Disability Insurance
- Currently, the City uses Group & Pension Administrators as a Third Party Administrator of the Medical Plan with a PHCS rental PPO network. Cigna's OAP network offers highly competitive claims pricing, an improvement of approximately 14% from the current network. The improved claims pricing has the potential to decrease City medical claims cost in 2014 by up to $2,000,000. Cigna also offers 24 hour customer service to participants
- MaxorPlus is the current Pharmacy Benefit Management carrier and provides great customer service, low drug cost, and the skinny network with a negotiated CVS contract. MaxorPlus renewal proposal came in with the lowest overall cost and will allow the City to integrate pharmacy clinical data with Cigna.
- SunLife provided the lowest rates for Basic Life, AD&D and Long-term Disability Insurance, as well as Optional Term Life Insurance and Enhanced Long-term Disability coverage. This will allow the City to increase the level of those benefits and better match what other cities are offering to their employees. Basic Life and AD&D coverage will increase from $10,000 to $50,000, and Basic Long-term Disability Insurance will increase from 50% of pre-disability earnings up to a $1,000 monthly benefit to 60% of pre-disability earnings up to a $5,000 monthly benefit.
FINANCIAL SUMMARY:
· Funding is available in accounts:
- 015-2110-413-8576 for Medical Claims
- 015-2110-413-8577 for Prescription Claims
- 015-2110-413-8574 for Dental Claims
- 015-2110-413-8575 for Insurance Fixed Costs/Administrative Fees
- 015-2110-413-8551 for Life/LTD Insurance
BOARD OR COMMISSION RECOMMENDATION:
· N/A