1995-129 O INANO NO. ?
AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR
THE PURCHASE OF MATERIALS, EQUIPMENT, SUPPLIES OR SERVICES;
PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING FOR
AN EFFECTIVE DATE.
WHEREAS, the City has solicited, received and tabulated
competitive bids for the purchase of necessary materials,
equipment, supplies or services in accordance with the procedures
of state law and City ordinances; and
WHEREAS, the City Manager or a designated employee has
reviewed and recommended that the herein described bids are the
lowest responsible bids for the materials, equipment, supplies or
services as shown in the "Bid Proposals" submitted therefore; and
WHEREAS, the City Council has provided in the City Budget for
the appropriation of funds to be used for the purchase of the
materials, equipment, supplies or services approved and accepted
herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the numbered items in the following numbered
bids for materials, equipment, supplies, or services, shown in the
"Bid Proposals" attached hereto, are hereby accepted and approved
as being the lowest responsible bids for such items:
BID ITEM
NUMBER NO VENDOR AMOUNT
1777 ALL FOSTER HIGGINS INC. $4.00 PER EMPLOYEE PER MO
SECTION II. That by the acceptance and approval of the above
numbered items of the submitted bids, the City accepts the offer of
the persons submitting the bids for such items and agrees to
purchase the materials, equipment, supplies or services in
accordance with the terms, specifications, standards, quantities
and for the specified sums contained in the Bid Invitations, Bid
Proposals, and related documents.
SECTION III. That should the City and persons submitting
approved and accepted items and of the submitted bids wish to enter
into a formal written agreement as a result of the acceptance,
approval, and awarding of the bids, the City Manager or his
designated representative is hereby authorized to execute the
written contract which shall be attached hereto; provided that the
written contract is in accordance with the terms, conditions,
specifications, standards, quantities and specified sums contained
in the Bid Proposal and related documents herein approved and
accepted.
SECTION IV. That by the acceptance and approval of the above
numbered items of the submitted bids, the City Council hereby
authorizes the expenditure of funds therefor in the amount and in
accordance with the approved bids or pursuant to a written contract
made pursuant thereto as authorized herein.
SECTION V. That this ordinance shall become effective
immediately upon its passage and/~app~oval. ~,~
PASSED AND APPROVED this /_d · uay of , 1995.
BO~ CASTLEBERRY, ~R~
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
HERBERT L. PROUTY, CITY ATTORNEY
DATE: July 18, 1995
CITY COUNCIL REPORT
TO: Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
SUBJECT: BID #1777- HEALTH INSURANCE AND ACTUARIAL CONSULTING
SERVICE
RECOMMENDATION: We recommend this bid be awarded to the only respondent,
Foster Higgins Inc., in the amount of $4.00 per employee per month, for a minimum
annual expenditure of $40,800.00 or a maximum of $60,000.00.
SUMMARY: This bid is for services to be provided by the consulting firm which will
include health insurance consulting, actuarial, and negotiation services for the City.
Foster Higgins will negotiate upcoming premium and coverage issues in the final year
of the city's contract with the current provider Harris Methodist. They will also
develop bid specification for re-bid of the Group Health Insurance Program for the
following year, 1997, and assist if necessary in any transition to a new provider.
Throughout the contract period Foster Higgins will evaluate and assist with employee
claims and plan administrative costs.
Bid packages were mailed to five prospective vendors, with only one responding.
BACKGROUND: Tabulation Sheet, City Council Study Session backup 7-11-95,
Contract Agreement.
PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED: Human Resources
Department, Employees of the City of Denton and their dependents Citizens of
Denton.
FISCAL IMPACT: Budgeted Funds for Human Resources for 1995 Account Number
#808-003-0008-8539.
Approved:
Name: Denise Harpo61
Title: Senior Buyer
614 .AGENDA
DATE: July 11, 1995
CITY COUNCIL REPORT
STUDY SESSION
TO: Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
SUBJECT: Health Insurance and Actuarial Consultant
RECOMMENDATION:
It is the staff's recommendation that the City Council authorize
the City Manager to enter into a health insurance and actuarial
consulting contract with Foster Higgins, Inc.. Foster Higgins is
a nationally recognized firm specializing in employee benefits,
specifically health insurance. The firm will provide health
insurance consulting, actuarial, and negotiation services for the
City to ensure an effective, cost efficient Group Health Insurance
Program is maintained for employees and dependents.
SUMMARY:
A health insurance and actuarial consultant bid was issued on June
26, 1995. Bids were received and opened July 10, 1995. Only one
firm submitted a bid and it met all bid specifications. The firm
of Foster Higgins, Inc. submitted the bid. This bid will be
analyzed and brought for City Council consideration at the July
18, 1995 meeting. A summary of Foster Higgins' proposed services
are (see Attachment I for details and costs):
1. Evaluating and providing recommendations on current and future
overall strategic plan, goals, objectives, etc.; assist in
evaluating any local or national health care issues and assist
with compliance of any required mandates.
2. Evaluating the quality of Harris Methodist services for
employees and their dependents and negotiating premium and
coverage issues with Harris that are in the best interest of the
City and employees.
3. Develop bid specifications for a re-bid of the Group Health
Insurance Program to be finalized for plan year January 1, 1997
December 31, 1997, including alternatives for retiree health
insurance.
4. If required, provide assistance in effectively switching to a
new health insurance program and insurance carrier, including
communication with employees, new billing arrangements, etc.
5. Evaluate and provide recommendations on claims and
administrative expense cost.
July 11, 1995
CM Report to City Council - Health Insurance Consultant
Page 2
The City's contract with Harris Methodist provides for one
additional renewal period of 12 months. We are in our second year
with Harris Methodist, and we are in negotiations for the third
year renewal. The contract with Harris Methodist provides for a
maximum renewal increase in rates of 15%. However, preliminary
indications are that with our claims experience the renewal rate
will "not exceed" 9%. With a very competitive market for health
insurance, we believe our rate increase should be less than 5%
effective January 1, 1996. One factor under consideration with
the Harris Methodist renewal is that the employees and dependents
are reporting an extremely favorable impression of Harris'
commitment to customer service. We feel that this is an important
factor in considering a third year renewal with Harris Methodist.
Another important factor is that the City has changed health
insurance carriers every 2 years. When a new carrier is
implemented, the employee and dependents (if covered) must learn
the new coverages, new co-payments, new network doctors and other
health care providers. Thus, the stability with the same carrier
for health insurance is important to employee morale.
Additionally, Harris Methodist is establishing a good, sound
reputation with the local doctors, hospitals, and other health
care providers in and around Denton.
Thus, current plans are to evaluate and negotiate an acceptable
rate renewal with Harris Methodist Health Plan (the City's current
provider for group health insurance) for plan year January 1 to
December 31, 1996. In the event an acceptable renewal rate is not
achieved with Harris Methodist, the City would need to immediately
develop bid specifications for the health insurance program,
consider and evaluate bids and implement a program with a new
carrier to be effective by January 1, 1996.
A contract with a nationally recognized health insurance and
actuarial consulting firm, such as Foster Higgins, Inc., would
provide the City with leverage in negotiations with Harris
Methodist. Foster Higgins is a full-service employee benefit
consulting firm specializing in health and actuarial services. A
complete description of the Foster Higgins consulting team that
will be servicing the City, with Council's approval, is shown in
Attachment II.
It is staff's recommendation that a contract with Foster Hlgglns
would only improve the City's position to receive a favorable re-
rate negotiation with Harris Methodist and provide professional
expertise in health insurance and actuarial services. This will
ensure the City maintains a cost effective and quality health
insurance program for employees and their dependents. By using a
health insurance and actuarial consultant, the City has been able
to keep health insurance costs below national trends for employers
our size. Our current cost of $2,268 per employee per year are
July 11, 1995
CM Report to City Council - Health Insurance Consultant
Page 3
approximately $1,300 per employee per year lower than local
governments nationally.
BACKGROUND:
Historically, it has been the City's position to retain the
services of a health insurance consultant. The City of Denton,
with Council's approval, retained the professional services of
Coopers & Lybrand from October, 1988, until the end of December,
1993. The services provided by this consultant were instrumental
in gaining a favorable premium with re-rate negotiations. The
consultant's staff successfully assisted with the transition from
one health insurance provider to another. The complex changes
were completed in a smooth and an uninterrupted manner reducing
disruptions for employees, dependents, and city administration
(see Attachment III). Of equal importance, the health insurance
and actuarial services have been instrumental in the City being
able to provide and maintain quality health insurance for
employees and dependents at significantly lower costs than
organizations of similar size (see Attachment IV).
We are now at the critical point of some very complex re-rate
negotiations with Harris Methodist where we need the assistance of
an expert who can navigate through contractual issues with the
complex medical community. This is especially relevant at a time
when uncertainty exits as to the status of local hospital
facilities in Denton. The Federal Trade Commission recently
ruled that Columbia/HCA Corporation must divest of one of their
two local hospitals. Certainly, it is the staff's goal and
minimum expectation that health care services be supplied with at
least one local hospital under our health insurance program. It
is preferable that both Denton hospitals are place in the Harris
Methodist provider network. A further expectation is that health
services provided and available in Denton are provided through the
Harris Methodist network. This will assure that money spent on
these services remain in Denton. A health insurance and actuarial
consultant can help the City meet these expectations in our health
insurance program. In addition, the City is fast approaching the
end of a re-bid cycle for the group health insurance program. A
professional health insurance consultant will ensure a detailed,
yet flexible bid specification, objective and complete financial
and services analysis, and sound financial recommendations for a
new carrier beginning with the January 1, 1997 contract and plan
year.
In keeping with our Five Year Strategic Plan (see Attachment V)
and the contractual advantages of re-bidding the health insurance
program each three years, we are recommending the retention of a
nationally recognized health insurance and actuarial consulting
firm. This firm will assist us in maintaining the positive track
July 11, 1995
CH Report to City Council - Health Insurance Consultant
Page 4
record, keeping our costs below national and regional trends, and
continuing to deliver an adequate and quality health insurance
program for City of Denton employees and their dependents.
PROGRAM, DEPARTMENTS OR GROUPS AFFECTED:
The employee health insurance program covers all regular, full-
time and part-time employees in all departments. Current
enrollment is approximately 832 employees. With dependent
coverage, there are approximately 1,976 total lives insured under
the Harris Methodist Health Insurance Program.
FISCAL IMPACT:
City Council authorized during the FY 1992/93 Budget that $4.00 of
the City-paid health insurance premium budgeted in each department
for each budgeted position be earmarked to fund a health insurance
and actuarial consultant. Departments are budgeted at $187.79 per
month for each employee (see Attachment VI). As indicated above,
current enrollment is approximately 832 employees. This varies by
month with turnover.
The bid by Foster Higgins provides for a cost of $4.00 per
participating employee per month. The minimum monthly fee is
$3,400; the maximum monthly fee is $5,000 per month based on
employee participation. The annual estimated cost is
approximately $40,800. The funds are included in the curr, ent
Council authorized budget for the Group Health Insurance ~rogram.
Cit; Ma~ag~rrell
Tho/~s W.VKl'~nck, Director of Human Resources
~I~t.l~.W~ea~, ~x~utive Di rector
'Hunicipa) Services and Economic Development
/
ccrpt95c, tk
Prepared: 6128/95
HCCSVC.wkl
03-Jul-95
07:51 AM
FOSTER HIGGINS
SERVICES & COST
PROPOSAL
EST. EST. PRICE TOTAL
DESCRIPTIONi i I I HOURS PER HOUR I AMOUNT
1. Strategic Health & Wellnes~ Program
Health Care Reform 5 $225 $1,125!
2. Current Health Insurance Adrnin. &
Operation 35 $225 $7,875
3. Group Health Insuance: Analysis ~
of proposed bids, contract negotiations , 120 $200 $24,000
4. Health Insurance Program Change
& Transition 45 $200 $9,000!
5. Conduct Health Insurance: Cost
30 $225 $6,750
& Claims Control
6. Negotiate Group Health Insurance:
Plan renewal, current/future provider , 50 $200 $10,000
',7. Government reporUng: Preparation
I & Submission , 5 $200 $1,000
8. Presentations & Attendance at:
T C_.,ity Council Meetings, EIC, Wellness, etc. ' 40 $225 $9,000:
OTAL 330 $68,750
Alternate Pricing:
Retainer fee arrangement in which all above tasks would be performed at a set monthly fee,
per participating employee per month.
Foster Higgins Quote: Est. Minimum Est. Maximum
$4 per-employee per-month $3,400 $5,000
City of Denton
Proposal for Health Insurance and Actuarial Services 14
QUALIFICATIONS OF Consulting Team
PROPOSED STAFF We put a great deal of thought into the professional consulting
team to best serve the City. This team combines the experience
and leadership of our local South Central Region consultants
with the breadth of our national resources to deliver a quality
and comprehensive approach to your particular situation.
Our team combines the We believe our team offers distinct advantages:
talent of our local
consultants with the
· Broad experience with public organizations of all sizes and
breadth and depth of our
national resources, complexities
· National survey capabilities with information on the latest
innovations and developments in compensation and benefits
· Comprehensive understanding of regional, state, and
national trends in health care reform and managed health
care delivery systems
· Responsiveness to our clients' needs with prompt attention
to potential problems before they become disruptions
· Promotion of long-term relationships that enhance
understanding in communication with client organizations.
The following pages include a project team chart and
biographies for each team member selected to serve the City of
Denton.
Foster H gg ns
City of Denton
Proposal for Health Insurance and Actuarial Services 15
Project Team
Jay Savan
Team Leader
Claims Managed Care
I
Joe Taylor ! LaD. on Butler
Financial I Techntcal Support
Jack Beam
Actuarial
Foster H~gg~ns
City of Denton
Proposal for Health Insurance and Actuarial Services 16
BIOGRAPHIES OF Jay Saran
PROPOSED STAFF Managing Consultant
Jay is located in our South Central Region headquarters office in
Dallas. His areas of expertise include strategic benefit planning.
health plan design, evaluating alternative funding mechanisms,
and plan administration.
Jay Savan will serve as Jay's recent projects include:
team leader for the City.
He will be responsible for
· Assisting a national transportation company in restructuring
timely, accurate delivery
of all verbal and written its approach to short- and long-term disability management
guidance, and overall
quality control. · Guiding a large regional energy company in implementing
the first phase of a managed care program
· Designing, marketing, and implementing a managed mental
health/chemical dependency program for a large metro-
politan transit authority
· Designing, analyzing feasibility of, and h'nplementing cost-
effective changes to a national environmental management
company's flexible benefit plan
· Conducting strategic benefit planning for a growing medical
center, resulting in increased usc of the center's own
facilities, significantly lower plan costs, and greater
employee satisfaction with the group medical plan
· Managing employee benefits due diligence proceedings for
the acquisition of a $100 million construction/engineering
firm
· Selecting and installing a nationwide managed medical care
plan for a large wholesale distributor.
Foster H gg ns
City of Denton
Proposal for Health Insurance and Actuarial Services 17
Jay has over nine years of experience in employee benefits.
Before joining Foster Higgins. he worked with another major
consulting firm and a large insurance company. He graduated
cum laude with a BS in business administration from the
University of Missouri-St. Louis, and attained his MBA-Finance
at Loyola Marymount University.
Jim Falconer
Managing Consultant
Jim is located in Foster Higgins' South Central Region in
Dallas. He is manager of the Health and Welfare Deparmaent
and provides specialized consulting to clients in cost
containment, claim audits, claim office analysis, claim system
evaluations, and alternative delivery systems. Jim is also
operations manager for our national claim audit practice, which
is located in Dallas.
Jim Falconer's role for the Before joining Foster Higgins, he spent more than 15 years in
City of Denton will be to group claim admimstration with one of the nation's largest
provide focused consulting carriers. He was responsible for implementing and supervising
on claim administration
issues, all cost containment programs as well as administration of group
life, medical, dental, and short-term and long-term disability
claims.
Among his many accomplishments, Jim:
· Is lead consultant for projects that have included plan design
evaluation, marketing of benefit plans, computing imputed
income, annual employee benefit statements, compliance
with the Tax Reform Act of 1986, and implementation of
flexible benefit feasibility study
a Is lead consultant for several private sector clients,
responsible for plan design, marketing and administration,
communications, and legal compliance
Foster
City of Denton
Proposal for Health Insurance and Actuarial Services 18
· Is a member of the American Management Association
Lecture Faculty for employee benefit issues
· Conducted claim audits and claim office procedure reviews
for several municipalities, including the City of Arlington
TX and the State of Mississippi
· Conducted a claim audit for a national communications
company that also focused on compliance with the
administrative services agreement
· Performed a claim audit for a regional stock brokerage fLrm
to document appropriateness of stop-loss administration
· Conducted a claim audit for a university system to measure
preferred provider organization claim capabilities
· Negotiated administrative services agreements for several
clients that resulted in expanded services and performance
standards
· Produced a managed care feasibility study for a major mid-
western newspaper, which resulted in identifying and
installing a cost-effective PPO.
Jim has a Bachelors in Business Administration with a minor in
Finance from the University of Texas at Houston.
Jack Beam, ASA, MAAA, EA
Principal
Jack is located in our South Central Region in Dallas. He has
over 20 years of experience as an actuary and employee benefit
consultant and serves as the consulting actuary to numerous
clients. Jack is also a member of Foster Higgins' Actuarial
Policy Committee.
Foster H gg, ns
City of Denton
Proposal for Health Insurance and Actuarial Services 19
Jack Beam will oversee Jack helps clients by:
actuarial projections
prepared for the City of
· Designing, implementing, and managing their retirement
Denton.
programs
= Designing and implementing early retirement windows
· Evaluating plans for mergers and acquisitions
· Determining plan qualification and restructuring plans for
nondiscrimination compliance.
Jack is an Associate of the Society of Actuaries, a member of
the American Academy of Actuaries, and an Enrolled Actuary
under ERISA. He also holds a Masters in Actuarial Science
from Georgia State University.
Dennis Copfer
Consultant
Dennis consults with clients in alternative delivery systems,
claim cost and utilization analyses, and managed care plan
designs. Before joining Foster Higgins, he spent more than 16
years in administration and finance with large managed care and
provider organizations. He has served as an appointee of the
Texas State Board of Insurance HMO Advisory and the HMO
Solvency Surveillance Committee.
In recent representative projects, Dennis has:
· Advised a large Texas employer (15,000 employees) on
selecting providers for a PPO plan. Significant savings
were projected, short-term and long-term, based on specific
contracted rates and utilization projections. He also
negotiated provider contracts that use savings incentives and
result in significant discounts.
Foster H gg ns
City of Denton
Proposal for Health Insurance and Actuarial Services 20
· Expedited a municipality's bid specifications, evaluation,
and contract negotiations for a single utilization review
organization to coordinate with multiple PPOs.
· Identified psychiatric utilization problems based on a
medical claim study for a national construction f'u'm. He
recommended plan design changes and managed care
solutions based on performance standards to be put into
effect.
· Revealed the relationship between plan design and excess
medical utilization for a 1,500- employee, geographically-
dispersed software company. Plan design changes and new
performance expectations for the utilization review manager
were developed to successfully assist with cost control.
· Conducted a utilization analysis for a major utility company
that identified significant mental health, drug, and retiree
cost problems. He assisted in HMO bid analysis and
selection, HMO contribution strategy, and managed medical
plan design for a flexible benefit program.
· Performed utilization review analysis for a large grocery
chain. He assisted with the identification of providers for a
directly negotiated occupational injury program. He also
developed plan design modifications, including improved
performance standards, for the existing preferred provider
network.
· Integrated managed care within a new flexible benefit
program for a major Texas university, using direct provider
contracting.
· Conducted managed care feasibility studies, experience
review, and contract strategy development. He has
Foster H gg ns
City of Denton
Proposal for Health Insurance and Actuarial Services 21
developed managed care plan designs for numerous types of
industries.
Dennis holds a BS in Business Administration from the
University of Southern California and is a Fellow of Healthcare
Financial Management Association (FHFMA).
Joseph Taylor, HIA, CEBS
Associate
Joe is located in the Foster Higgins South Central Region office
in Dallas, Texas. He provides consulting services to clients in
the form of managed care, and health and life insurance pricing.
Joe Taylor will provide Before joining Foster Higgins, Joe was in the New Business
ongoing underwriting and Pricing unit of one of the nation's largest carriers. He was
financial support, responsible for all aspects of health, life, and disability pricing
including: managed care, manual rates, stop-loss, and flexible
spending accounts.
In his role at Foster Higgins, Joe:
· Prices and completes network evaluations for health
maintenance organizations (HMOs), point-of-service plans
(POS), and preferred provider organizations (PPOs)
· Evaluates provider networks in terms of contract
arrangements, utilization statistics, and discount value
· Develops fee schedules and capitation rates
· Prepares bid proposal specifications and analyzes the
career's responses
· Develops and analyzes renewal rate projections, carrier
retention, and claim reserve calculations.
Foster
City of Denton
Proposal for Health Insurance and Actuarial Services
· Evaluates and monitors the managed care risk-sharing
arrangements and performance guarantees negotiated on
behalf of clients
· Projects future claim activity and retention for proposed
benefit programs
· Calculates manual rates, plan relativities, benefit and design
changes and their impact on rates, utilization and claim
experience
· Prices individual and aggregate stop-loss costs and analyzes
carrier projections
· Analyzes, summarizes, and compiles data for accuracy and
meaningfulness.
Joe has worked on relevant engagements in which he:
· Developed underwriting guidelines, pricing models, and
capitation rates for start-up of an Accountable Health Plan
· Designed. marketed, and implemented a POS managed care
pharmacy, and Cardiac Centers of Excellence program for a
large Texas utility company
· Prepared and presented utilization, claim, and funding
analysis quality reports for an electronics f'u'm, which
allowed them to make proactive decisions based on
emerging patterns
· Calculated the cost savings of a merger and developed an
action plan for integrating benefit plans between an existing
client and a targeted company
Foster H gg ns
City of Denton
Proposal for Health Insurance and Actuarial Services 23
· Formulated funding targets and contribution strategy and
analyzed prior results for a large regional utility company.
Joe received his Bachelor of Arts degree in both Mathematics--
with a concentration in Actuarial Science--and Mathematics
Education 7-12 from Syracuse University in Syracuse, New
York. He received his Health Insurance Associate designation
from the Health Insurance Association of America. Joe has
completed his course work for the Certified Employee Benefits
Specialist designation.
LaDon Butler, LVN, CPUR
Associate
La. Don is located in our Dallas office. She provides technical
and clinical support to clients and is also very involved in our
claim audit practice.
LaDon Butler will provide Before joining Foster Higgins, LaDon was a senior claims
technical support, consultant for another major consulting firm where she
performed claim administrator performance audits. LaDon was
also involved in the negotiation of claim administrator
performance standards, claim administrator systems analysis,
and claim data analysis.
LaDon began her claims career with a major group carrier
where she was a claims examiner and an internal quality
assurance auditor. She is a graduate of Collin Memorial
Hospital School of Licensed Vocational Nursing and is a
member of the Dallas Society of Claimsmen where she has
served as an officer. She is also a Certified Professional in
Utilization Review.
Foster
CITY OF DENTON
HEALTH INSURANCE HISTORY
1986 TO 1989 CITY PLAN & MAXICARE (Self-Insured)
1986 - Indemnity/Preferred Provider Organization
- COBRA Implemented
1987 - Immigration Control & Reform (1-9 program)
1988 - Maxicare Bankruptcy
1990 TO 1991 SANUS/NY LIFE (Fully Insured)
1990 - Changed Health Insurance Carriers
Implemented HMO/Indemnity
- Gatekeeper; Restricted Access to Specialty Care
- Implemented 125 Plan/Savings Bonds
- ICMA-RC Deferred Compensation
1991 - 20% Rate Increase
- Life Plus Program
- Implemented Drug Screening Program
- Implemented New Salary & Performance Mgmt. Program
(Mercer)
1992 TO 1993 PHILADELPHIA AMERICAN LIFE (Fully Insured)
1992 - Changed Health Insurance Carriers
- Expanded Coverage & Medical Providers
- Change 125 Carrier (Acordia); increase
participants ($65,000 per yr.)
- Implemented Americans with Disability Program
1993 - Changed Plan Design (22% decrease)
- 15% Rate Increase
- Life Plus Program
- New PRI changes
Increased ER activity (lawsuits,EEOC, TEC, etc.)
1994 to 1995 HARRIS METHODIST (Fully Insured)
1994 Changed Health Insurance Carriers
Saved $201K
- Began Wellness Program with Health Risk Assessment
- Implemented FMLA Program
- Random & DOT Drug/Alcohol Testing Program
- Implemented TMRS improvements
- Implemented Direct Deposit
1995 - Saved $150K
- 2.5% Rate Decrease
Prepared: 05/24/95
HINSCOST.wkl
03-Jut-95
07:53 AM
1994/95
HEALTH PLAN COST
COMPARISON
I CITY OF CITY COUNTY *NATIONAL i
PLAN TYPE DENTON GOVT GOVT 500+
INDEMNITY $0 $4,355] $3,470 $3,836;
PPO $0 $3,403 $3,988 $3,6221
POS $0!, $3,712 $3,411 $3,516: .
HMO $2,2681 $3,592 i $3,691 ~ $3,338.
*Represents employers with 500 or more employees
SOURCE: Foster Higgins
National Survey of Employer
Sponsored Health Plans 1993
CITY OF DENTON
EMPLOYEE HEALTH INSURANCE PROGRAM
5 YEAR
STRATEGIC PLAN
1994/95
O Evaluate Harris Methodist Health program and make
recommendations concerning the January 1, 1995 2nd plan
year renewal
o Conduct and analyze a survey of employees concerning
retiree coverage and funding options (active employee pays
an additional amount to "level" premium for retiree;
consider cost subsidy by city)
o Bid and award contract for Health Care consulting services
in anticipation of a re-bid on Health Insurance Program
for the January 1, 1997 plan year, (1995)
o Begin drafting Health Insurance bid to include options on
retiree coverage and funding to be published in February,
1996 after January 1, 1996 3rd plan year renewal (if
appropriate)
1995/96
o Evaluate Harris Methodist Health program and make
recommendations concerning the January 1, 1996 3rd plan
year renewal
o Complete Health Insurance bid to include options on
retiree coverage and funding to be published in February,
1996 (after January 1, 1996 3rd plan year renewal, if
executed) to determine cost and fully insured carrier for
January 1, 1997 implementation
o Evaluate services and contract of Health Care consultant
and determine feasibility of second year (1996) contract
extension,
1996/97
o Complete bid on Health Insurance Program, finalize
recommendations and contract for City Council
authorization (multi-year), conduct open enrollment, and
accomplish change to new carrier (if required) by January
1, 1997,
- implement approved options on retiree coverage and
Cunding
o Evaluate services and contract of Health Care consultant
and determine feasibility of third year (1997) contract
extension.
o Re-bid and award contract for Health Care consulting
services for the 1998 plan year.
1997/98
o Evaluate Employee Health Insurance program and make
recommendations concerning the January 1, 1998 2nd plan
year renewal
o Award contract of Health Care consultant and evaluate
services for first year (1998) contract,
1998/99
o Evaluate Employee Health Insurance program and make
recommendations concerning the January 1, 1999 3rd plan
year renewal
o Evaluate services and contract of Health Care consultant
and determine feasibility of second year (1999) contract
extension.
o Complete Health Insurance bid to include other health and
wellness options for employees and dependents (includin9
retiree coverage and funding) to De published in February,
1999 (after January 1, 1999 3rd plan year renewal, if
executed) to determine cost and fu]]y insured carrier for
January 1, 2000 implementation
INSTRA96.TK
4/14/95
HEALTH INSURANCE PREMIUM RATES
JANUARY 1, 1995 - DECEMBER 31, 1995
Harris HMO: ] Harris Preferred Plan:
~F. only $1 ~3.79 EE only $212.36
F~F~ & Spouse $2~5.66 EE & Spouse $329.15
EE & Children $246.80 EE & Children $284.55
~'amily $,310.46 Family $358.88
BI-WEEKI,Y HEALTH INSURANCE PREMIUM RATES JANUARY 1, 199~ - DECEMBER 31, 1995
EMPLOYEE EMPLOYEE & EMPLOYEE & ] EMPLOYEE
&
PLAN TYPE ONLY SPOUSE CYHI,DI~EN FAMII,y
iHMO Only I $0.00 $50.94 $31.~ $63.35
3/4 Time HMO Only I $22.97 $73.91 $54.48 $86.32
1/2 Time HMO Only t $45.95 $96.89, $77.46 $109.301
PLAN TYPE ONLY SPOUSE CH~D~N FAM~.Y
HMO Only $14.29 $73.66 $50.39 $87.55 ~
3/4 T/me HMO Only $37.251 $95.60 $73.36 $110.52
1/2 Time HMO Only $60.241 $119.61 ~ $96.34 $133.50
HINSPREM.wkl
CONTRACT
AGREENENT BETWEEN THE CITY OF DENTON
AND H ALTH INSURANCE AND ACTUARIAL CONSULTANT
The City of Denton, Texas, a Municipal Home Rule City situated in
Denton County, Texas, hereinafter called "CITY," acting herein by
and through its City Manager and A. Foster Higgins & Co., Inc.
doing business in Texas, hereinafter called "CONSULTANT," hereby
mutually agree as follows:
I. SERVICES TO BE PERFORMED
CITY hereby retains CONSULTANT to perform the hereinafter
designated personal services. CONSULTANT agrees to perform the
following services:
A. Evaluate and provide recommendations on the overall strategic
goals, objectives, and direction of the employee health and
wellness program. Provide advice, assistance, and
recommendations as related to the national health care reform.
B. Evaluate and provide recommendations on administration of the
current health insurance program. This should include plan
design, type, number, and quality of health care providers,
premium structure, proposed rate increases, provider(s) and
contract, etc.
C. At the City's request, develop bid specifications, recommend
vendors, and analyze bids, and make recommendations on
providing group health insurance coverage for future years.
D. Facilitate and assist with any transition between program
providers that may arise as a result of the bidding process.
Upon a change to a new health care provider, develop and
manage transition to a new provider(s) including schedule and
arrangement for open enrollment meetings with eligible
employees, dependents, and retirees, transition to new
billings, etc.
E. Monitor, analysis, and provide recommendations concerning the
City's group health insurance plan, claims, and suggest
strategies to control claims.
F. Review data, information, performance issues, etc. and if
requested by the City, negotiate on behalf of the City with
current or perspective vendors new or renewal contract terms,
conditions, premium rates, etc. for group health insurance
plan. Subject to terms agreeable to the City.
G. Assist in preparation and submission of required reporting
information, forms, etc. required of the City to various
federal and state government agencies related to the group
health and wellness program.
H. Attend meetings and, if requested prepare and make
presentations, using professional and appropriate visual aids,
at meetings of the City Council, City management, employee
insurance committee, employee wellness committee, etc.
I. On-Site Meetings
CONSULTANT agrees to meet with CITY's representatives to
review plan experience and management issues estimated as
follows:
City Council Meetings 3
CITY Management Meetings 1
Employee Insurance Committee Meetings 6
Employee Wellness Committee Meetings 1
J. Perform tasks related to the employee group health and
wellness program as are reasonably requested by the City.
K. CONSULTANT shall exercise the same degree of care, skill, and
diligence in the performance of these services as is
ordinarily provided by persons under similar circumstances.
CITY agrees that, with respect to the services and duties
CONSULTANT will provide under this agreement, CONSULTANT does
not accept status as a fiduciary with respect to any of the
plans or programs and that all recommendations made by
CONSULTANT pursuant to this agreement may be accepted,
modified, or rejected by CITY.
II. TERMS OF AGREEMENT AND EXTENSION PROVISIONS
CONSULTANT shall commence rendering services immediately upon
receiving notification of contract approval and shall continue for
a period of twelve months. This contract is subject to
consideration for renewal upon mutual consent of both parties for
two additional twelve-month periods, with negotiation of the terms,
conditions, and costs in successive years if scope of services do
not deviate more than 25% and cost does not increase more than 26%.
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III. COMPENSATION TO BE PAID CONTRACTOR
CITY agrees to pay CONSULTANT for the services performed hereunder
as follows:
A. Amount of Payment for Services:
CITY agrees to pay CONSULTANT, for services hereunder, at a
set monthly fee of $4.00 per participating employee per month
with a monthly minimum of $3,400.00 and a monthly maximum not
to exceed $5,000.00:
EST.
TASK HOURS
1. Strategic health & wellness program;
health care reform 5
2. Current health insurance administration:
and operation 35
3. Group health insurance: analysis of
proposed bids, contract negotiations,
recommendations 120
4. Health insurance program change and
transition 45
5. Conduct health insurance: cost & claims
control 30
6. Negotiate group health insurance: plan
renewal, current/future provider 50
7. Government reporting: preparation &
submission 5
8. Presentation & attendance at City meetings
City Council, City management, Employee
Insurance & Employee Wellness Committees 40
CONSULTANT will charge CITY based on actual time spent and
expenses incurred. In no event will the total project cost
exceed $60,000.00 for CONSULTANT'S fees and expenses unless
CONSULTANT is requested to perform tasks outside the scope
presented in the proposal. If additional assistance is
required from the CONSULTANT, estimates of professional fees
will be provided and presented to CITY management for approval
before proceeding with any additional tasks.
CONSULTANT and CITY expressly understand and agree that
CONSULTANT shall not receive any compensation for the services
provided for herein, from any other source.
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B. Dates of payment: CITY will pay CONSULTANT on a monthly
basis, within thirty (30) days of receipt of invoices for
completion of services provided for herein.
IV. SUPERVISION AND CONTROL BY CITY
It is mutually understood and agreed to, by, and between CITY and
CONSULTANT that CONSULTANT is an independent contractor and shall
not be deemed to be or considered an employee of the CITY of
Denton, Texas for the purposes of income tax, withholding, social
security taxes, vacation or sick leave benefits, worker's
compensation, or any other CITY employee benefit. CITY shall have
supervision and control of CONSULTANT and any employee while on
CITY premises, and it is expressly understood that CONSULTANT shall
perform the services hereunder at the direction of the City Manager
of the City of Denton or his designee under this agreement.
V. SOURCE OF FUNDS
Ail payments to CONSULTANT under this Agreement are to be paid by
CITY from funds appropriated by the City Council for such purposes
in the Budget of the City of Denton.
VI. INSURANCE
CONSULTANT shall provide at its own cost and expense worker's
compensation insurance, liability insurance, and all other
insurance necessary to protect CONSULTANT in the operation of
CONSULTANT'S business.
VII. INDEMNIFICATION
CONSULTANT shall and does hereby agree to indemnify and hold
harmless the CITY from any and all damages, loss, or liability of
any kind whatsoever to the extent proximately caused by the error,
omission, or negligent act of CONSULTANT~ its officers, agents,
employees, invitees, and all the persons for whom it is legally
liable in the course of the performance of this Agreement, and
CONSULTANT will, at its cost and expense, defend and protect the
City of Denton against any and all such claims and demands. The
acceptance of CONSULTANT'S services by the CITY shall not operate
as a waiver of such right of indemnification.
VIII. CANCELLATION
CITY and CONSULTANT each reserve the right to cancel this Agreement
at any time by giving the other party fourteen (14} days' written
notice of its intention to cancel. If the agreement is canceled
before completion, the CITY agrees to compensate CONSULTANT for
services provided and expenses incurred prior to notice of
cancellation. In the event of cancellation or upon expiration of
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this contract, Consultant shall return to City any and all
documents or materials, and all copies made thereof, which
Consultant received from, and/or developed for City for the
purposes of this contract except the CONSULTANT shall have the
right to retain one copy for internal files.
IX. CONFIDENTIAL RELATIONSHIP
City may, from time to time, communicate to Consultant certain
information protected by the Texas Open Records Act (e.g., employee
personnel or medical records) to enable Consultant to effectively
perform the services required hereunder. Consultant shall treat
all information supplied as confidential, whether or not so
identified, and not release same unless consent to do so is
received in writing from the City Attorney's Office or the Texas
Attorney General's Office. Consultant shall limit the use and
circulation of such information, even within his own organization,
to the extent necessary to perform the Services.
Consultant shall not disclose any reports, recommendations,
conclusions, or other results of the services performed by
Consultant without the prior written consent of the City.
Consultant shall comply with all legal obligations it may now or
hereafter have respecting the information or property of the City,
its officers or employees or its independent contractors supplied
Consultant or prepared by Consultant in the performance of this
contract even after the cancellation of this contract.
X. SUCCESSORS AND ASSIGNS
The City and the Consultant each binds itself and its successors,
executors, administrators, and assigns to the other party to this
agreement and to the successors, executors, administrators, and
assigns of such other party, in respect to all covenants of this
agreement. Except as above, neither the City nor the Consultant
shall assign, sublet, or transfer its interest in this agreement
without the written consent of the other. Nothing herein shall be
constituted as creating any personal liability on the part of any
officer or employee of the City.
CITY CONTRACTOR
City of Denton, Texas
ATTN: City Manager
215 E. McKinney
Denton, TX 76201
Either party may change its mailing address by sending notice
of change of address to the other at the above address by certified
mail, return receipt requested.
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XI. DESIGNEE
The Director of Human Resources for the City of Denton, Texas,
shall be the City Manager's designee under this contract and is
hereby authorized to carry out the terms of this agreement on
behalf of the City of Denton, Texas.
IN W. ITN/ESS WHEREOF, the parties have executed this Contract on
BY: B
~L%oy~ V~. Harrell, / ~ /
City Manager [TITLE: ///~z~ ~z~
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
CITY ATTORNEY'S OFFICE
/ -!
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