Exhibit 1 - Agenda Information SheetCity of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
ACM: Cassey Ogden
DATE: September 19, 2023
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the City Manager to execute a contract with Humana Insurance Company, for voluntary dental
coverage for City of Denton employees for the Human Resources Department; providing for the
expenditure of funds therefor; and providing an effective date (RFP 8240 – awarded to Humana Insurance
Company, for three (3) years, with the option for two (2) additional one (1) year extensions, in the total five
(5) year not-to-exceed amount of $8,620,676.17).
STRATEGIC ALIGNMENT
This action supports Key Focus Area: Pursue Organizational Excellence and Collaborative and Respectful
Leadership.
INFORMATION/BACKGROUND
The City requested competitive proposals for voluntary dental benefits for employees as part of the City’s
comprehensive benefits package. The cost for the voluntary dental benefits is paid 100% by the
employee/retiree.
Voluntary dental benefits have been provided to employees and retirees (members) through Delta Dental
since January 1, 2019. While Delta Dental has been a good partner during this period, the last of the City’s
one-year renewals ends on December 31, 2023. Due to the expiration of the current contract, RFP #8240
was issued to the dental insurance market.
An Employee Benefits Survey was conducted in early 2023. Employee feedback included comments that
employees preferred a higher amount of coverage, 100% preventive coverage on the low plan, and more
in-network providers. As a result of employee feedback, the RFP requested proposals to include additional
benefits options, including higher calendar year maximums (CYM), and 100% preventive coverage on the
low plan.
The City received responses to the RFP from eight (8) dental insurance companies, including Delta Dental,
the incumbent vendor. Table 1 below lists the companies that responded, as well as the comparison of the
proposed prices for voluntary dental benefits as compared to the current cost through Delta Dental.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Table 1 – Proposed Dental Rates
Company Increase (Decrease) to Current Rates
AFLAC (6.00%)
Delta Dental (Incumbent) Same as expiring rates
Humana – BAFO (2.04%)
MetLife (11.0%)
Mutual of Omaha (7.50%)
Sunlife (15.01%)
The Standard (10.00%)
United Healthcare – BAFO (10.02%)
All voluntary dental proposals were reviewed and scored by an evaluation team that included staff members
from the City’s Employee Insurance Committee (EIC), Human Resources, and other departments.
Based on the evaluation of the proposals, staff recommends awarding the contract for voluntary dental
insurance from Humana Insurance Company (Humana). Humana’s proposal provides lower monthly
premiums on the high plan compared to the incumbent carrier, resulting in savings for members in their
paychecks. Humana also proposed a five-year rate guarantee meaning rates will not change for the duration
of the five-year contract through the end of 2028. Humana’s plan designs also provide overall health in
mind, which includes additional exams and cleanings. Lastly, Humana keeps 78.76% of in-network
providers compared to the current Delta Dental network (74.15%), which decreases disruption for
employees when seeing current dental providers.
While Humana’s overall rates savings are lower than the other bids, the enhanced coverage provided by
Humana’s proposal is higher than any other vendor and the current plans. The additional benefits provided
include higher calendar year maximums (CYM) for both plans, extended annual maximum (an additional
30% of CYM of coverage when members meet their CYM), 100% coverage for preventive services for the
low plan, and additional cleanings (routine and periodontal) and exams per year. These enhanced benefits
provide cost savings to members at the time of service.
Project Description Estimated 5-Year Expenditure
Voluntary Dental – Year 1 $1,406,097.12
Voluntary Dental – Year 2*
(1,524 plus 5% = 1,600 count)
$1,476,401.98
Voluntary Dental – Year 3
(1,600 plus 5% = 1,680 count)
$1,550,222.07
Voluntary Dental – Year 4
(1,680 plus 5% = 1,764 count)
$1,625,685.29
Voluntary Dental – Year 5
(1,764 plus 5% = 1,925 count)
$1,778,571.88
Contingency (10% of Total) $783,697.83
Total $8,620,676.17
*5% employee increase each year, starting with the 2024 average count
Request for Proposals was sent to 114 prospective suppliers of this item, including two (2) Denton firms.
In addition, specifications were placed on the Procurement website for prospective suppliers to download
and advertised in the local newspaper. Eight (8) proposals were received and evaluated based on published
criteria, including probable performance, compliance with specifications, and price. Best and Final Offers
(BAFO) were requested from the top firm. Based upon this evaluation, Humana Insurance Company was
ranked the highest and determined to be the best value for the City.
NIGP Code Used for Solicitation: 953 - (Service Only) - Insurance and
Insurance Services, (All Types)
Notifications sent for Solicitation sent in IonWave: 114
Number of Suppliers that viewed Solicitation in IonWave: 18
HUB-Historically Underutilized Business Invitations sent out: 10
SBE-Small Business Enterprise Invitations sent out: 23
Responses from Solicitation: 8
RECOMMENDATION
Award a contract with Humana Insurance Company, for voluntary dental coverage for City of Denton
employees for the Human Resources Department, in a three (3) year, with the option for two (2) additional
one (1) year extensions, in the total five (5) year not-to-exceed amount of $8,620,676.17.
PRINCIPAL PLACE OF BUSINESS
Humana Insurance Company
DePere, WI
ESTIMATED SCHEDULE OF PROJECT
This is a three (3) year contract, with options to extend the contract for two (2) additional one (1) year
periods, with all terms and conditions remaining the same. Services under this contract will begin on
January 1, 2024.
FISCAL INFORMATION
These services will be funded from the Health Insurance Fund account 850500.6152. Requisition #160815
has been entered into the Purchasing software system in the amount of $1,546,706.83. The budgeted amount
for this item is $8,620,676.17. The City will only pay for services rendered and is not obligated to pay the
full contract amount unless needed.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Pricing Evaluation
Exhibit 3: Presentation
Exhibit 4: Ordinance and Contract
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Linda Kile, 940-349-8388.
Legal point of contact: Marcella Lunn at 940-349-8333.