Title
Consider/Discuss/Act on a Resolution Authorizing the Interim City Manager to Enter into Contracts/Agreements with Allegiance Benefit Plan Management for Third Party Administrator Services, MaxorPlus for Pharmacy Benefit Management Services, Davis Vision for Vision Insurance Coverage, Kansas City Life for Long Term Disability Insurance Coverage, MetLife for Life Insurance Coverage, and Allegiance Benefit Plan Management for Section 125 Administration
Summary
COUNCIL GOAL: Operational Excellence
MEETING DATE: October 6, 2015
DEPARTMENT: Human Resources
CONTACT: Kathryn Usrey, Interim Human Resources Director
RECOMMENDED CITY COUNCIL ACTION:
• Approval of Resolution
ITEM SUMMARY:
• This Resolution authorizes contracts with Allegiance Benefit Plan Management for Third Party Administrator Services, Maxor for Prescription Benefit Management Services, Davis Vision for Vision Insurance Coverage, Kansas City Life for Long Term Disability Insurance Coverage, MetLife for Life Insurance Coverage and Allegiance Benefit Plan Management for Section 125 Administration.
BACKGROUND INFORMATION:
• The City of McKinney issued a Request for Proposals 15-63RFP Employee Benefits Administration & Insurance Products in July 2015.
• Proposals for 15-63RFP were received on August 10, 2015.
• Eighteen (18) proposals were received.
• The proposals were broken down into the following categories:
o Third Party Administration (TPA): Allegiance Benefit Plan Management, CIGNA, Blue Cross Blue Shield
o Prescription: MaxorPlus, CIGNA, Blue Cross Blue Shield, BeneCard
o Vision: Davis Vision, Eyemed, Security Life, Lincoln Financial (MGM), Cigna
o Long Term Disability (LTD): Kansas City life, CIGNA, Lincoln Financial
o Life: MetLife, Minnesota Life, State Farm, Lincoln Financial, CIGNA
o Section 125 Cafeteria Plan: Allegiance, Total Administrative Services Corp, Aflac (Wage Works), Discovery Benefits, HAS Bank (Blue Cross)
• Smith & Associates Consulting provided their analysis and recommendations to the committee of three staff members from Human Resources and the City Manager’s Office.
• An Evaluation Team comprised of three (3) City employees along with Eric Smith with Smith & Associates Consulting reviewed and ranked the proposals based on the following criteria set forth in the RFP:
o Price & Multi-year rate guarantee
o Personnel & Management Experience
o Computer System and Report Generation
o Location and Market Access
o Proposal Responsibilities
o Municipality Experience
• The Evaluation Team recommends the following Proposers as the best value for the City:
o Allegiance Benefit Plan Management
o MaxorPlus
o Davis Vision
o MetLife
o Kansas City Life
• Currently the City uses Cigna as a Third Party Administrator (TPA) of the Medical Plan using the Cigna network. Allegiance is owned but not managed by Cigna. With Allegiance we will continue to have access to Cigna’s network, but at half the cost. Allegiance is a smaller TPA than the big carriers and has the flexibility to administer our plan as written. This will allow us to minimize some of the claims issues we have had with Cigna and save approximately $150,000 in administrative fees.
• MaxorPlus is our current Pharmacy Benefit Manager and we will be continuing our relationship with them.
• Our Vision services are currently provided by Block Vision who was bought by Superior over the last year. Neither Block nor Superior bid this year. Davis Vision was selected as the lowest and best proposal.
• Our current vendor for Long Term Disability coverage is Sun Life Financial. They did not submit a proposal this year. Kansas City Life was selected as the most responsive bid at the best price.
• Our current vendor for Life Insurance is Sun Life. They did not submit a proposal this year. MetLife was selected as the best proposal.
• Our current vendor for Section 125 Administration is WageWorks, AFLAC. Allegiance our Health Plan Third Party Administrator offered Section 125 Plan Administration as part of their services. While the cost is $5000 more, because they are the plan administrator they will be able to auto-verify claims and make the process easier for employees and more accurate. We recommend Allegiance because of the accuracy, ease for employees and ease of administration.
FINANCIAL SUMMARY:
• Funding is available in accounts:
o 015-2110-413-8576 for Medical Claims
o 015-2110-413-8577 for Prescription Claims
o 015-2110-413-8574 for Dental Claims
o 015-2110-413-8575 for Insurance Fixed Costs/Administrative Fees
o 015-2110-413-8551 for Life/LTD Insurance
BOARD OR COMMISSION RECOMMENDATION: N/A