HomeMy WebLinkAbout19. 12-524
OCTOBER 23, 2012 12-524 RESOLUTION
(CARRIED___7-0_____LOST________LAID OVER________WITHDRAWN________)
PURPOSE: APPROVE CONTRACT PACKAGE WITH ORGANIZATIONS TO
PROVIDE CITY HEALTH INSURANCE SERVICES, INCLUDING
THIRD PARTY ADMINISTRATOR, STOP LOSS CARRIER,
PROVIDER NETWORKS, PHARMACY BENEFIT MANAGER, &
TRANSPLANT RIDER PROVIDER
INITIATED BY: CITY ADMINISTRATION
WHEREAS, current contracts for services necessary to implement and operate the
City’s self insured health insurance plan expire at the end of the 2012 calendar year; and
WHEREAS, the City solicited proposals for continuing service beginning in 2013
through a request for proposal process; and
WHEREAS, the City received a number packaged proposals offering to fully
operate the City’s self-insured program; and
WHEREAS, after evaluating various options presented to the City, it has been
determined that the package identified as Option #1 on the attached comparison sheet,
was determined to be the most cost effective choice to carry out the City’s Health
Insurance Plan; and
WHEREAS, the Option #1 package includes the following providers:
Third-Party Administrator Stop Loss Carrier
Auxiant QBE
1233 N. Mayfair Road, Ste. 207 9 Atlantic Avenue
Wauwatosa, WI 53266 Marblehead, MA01945
Pharmacy Benefit Manager Transplant Rider Provider
Serv You National Fire Union
10201 Innovation Drive, Ste. 600 175 Water Street
Milwaukee, WI 53226 New York, NY 10038
Provider Network
HPS Trilogy
735 N. Water St., Ste.333 18000 W. Sarah Lane, Ste. 310
Milwaukee, WI 53202 Brookfield, WI 53045
Health EOS+
301 North Broadway, Ste.301
OCTOBER 23, 2012 12-524 RESOLUTION
CONT'D
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that the package identified as Option #1 in this Resolution and on the attached
comparison sheet is hereby approved and the proper City officials are hereby authorized to
execute and deliver all necessary and advisable agreements, and are further authorized
and directed to take steps necessary to implement the City's Health Insurance program
and the terms and conditions of the agreements. Money for this purpose is hereby
appropriated from:
Acct. No. 601-0903-6401-XXXXX Health Insurance Fund - Various Contractual
Services
CITY HALL
215 Church Avenue
P.O.Box 1130
o5hkasn.Wisconsin
54903-1130 City of Oshkosh
Of HKQ/H
TO: Honorable Mayor and Members of the Common Council
FROM: Sue Brinkman, Human Resources Manager
DATE: October 18, 2012
RE: Approve Third Party Administrator, Stop Loss Carrier,Networks,Pharmacy Benefit
Manager and Transplant Rider
BACKGROUND:
The City currently has a self funded health insurance program which includes a variety of components
such as; a third party administrator(TPA), stop loss carrier,networks,pharmacy benefit manager(PBM)
and transplant rider. In order to maximize efficiency and cost effectiveness,these components were
recently re-evaluated. A request for proposal (RFP)conducted for these services included responses
proposing fully insured and self insured products.
ANALYSIS:
Because the components of a self funded plan are interdependent, and in order to fairly compare the cost
of self insured programs to a fully insured program, it is necessary to evaluate the total costs for each
option when assessing our RFP. A spreadsheet illustrating this comparison is attached. This spreadsheet
illustrates that Option#1,the combination of Auxiant as a third party administrator,QBE as the stop loss
carrier, HPS/Trilogy/Health EOS+as the networks, Serve-You as the pharmacy benefit manager and
National Union Fire as the transplant rider provide the most cost effective option for the City when
considering run-out/run-in liability.Where there is only one component vendor listed on the attached
spreadsheet, it is because they were determined to be the most cost effective option through separate
analysis.The TPA,network&PBM agreements are for 3 years in duration,the stop loss and transplant
rider agreements are annual agreements. The estimated cost for this self insured package is $8.6 million,
with a maximum cost of$10.4 million. By comparison,the cost for a fully insured plan is estimated to
cost as much as $12.4 million.
FISCAL IMPACT:
The total 2013 fiscal impact for the proposed third party administrator(TPA), stop loss carrier,networks,
pharmacy benefit manager(PBM) and transplant rider is approximately$8.6 million.
RECOMMENDATION:
Based on the information evaluated as a result of the RFP, staff recommends Option#1,which will result
in retaining our existing program and components with the exception of our third party administrator.
The new TPA, Auxiant, is a well respected provider, has experience with organizations similarly sized to
the City of Oshkosh, and they provide the most cost efficient and effective option. This change will be
virtually transparent to our employees as the only difference will be that they will be issued a new
identification card.
Respectfully Submitted, Approved,
JL
Sue Brinkman,Human Resources Manager Mark Rohloff, City Manager
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