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Home My WebLink About04. 15-163 APRIL 14, 2015 15-163 RESOLUTION (CARRIED__7-0_____ LOST _______ LAID OVER _______ WITHDRAWN _______) PURPOSE: APPROVE PROFESSIONAL SERVICE AGREEMENT WITH ASSOCIATED FINANCIAL GROUP FOR BENEFIT CONSULTING SERVICES (various amounts) INITIATED BY: PURCHASING BE IT RESOLVED by the Common Council of the City of Oshkosh that the proper City officials are hereby authorized to enter into and take those steps necessary to implement an appropriate professional services agreement with Associated Financial Group for benefit consulting services in the amount of $36,000 in 2015, $67,200 in 2016 and 2017, and an increase in fee no more than 3% in 2018 and 2019. Acct. No. 601-0903-6401-00000 Health Insurance Fund – Contractual Services CITY HALL 215 Church Avenue P.O.Box 1130 Oshkosh,Wisconsin City of Oshkosh 54903-1130 � � O.IHKO.IH TO: Honorable Mayor and Members of the Common Council FROM: Jon G. Urben, General Services Manager DATE: Apri17, 2015 RE: Approve Professional Service Agreement with Associated Financial Group for Benefit Consulting Services BACKGROUND In recognition of the critical importance of controlling employee health care costs the Common Council adopted a strategy in the city's 2015-2016 strategic plan of conducting a structural review of the city's health insurance plan, costs and contributions. This strategy was listed as an objective to strengthen the city's financial position/capabilities to help achieve the internal priority goal of developing an effective, high performing government. Understanding that this review will require an in depth analysis of our current benefit plans, costs and contributions and that the city has not done a request for proposal (RFP) for benefit consulting services since 2003, it was determined the city should issue an RFP as a first step in this process. A committee of employees from Human Resources, Benefits, Finance and Purchasing was established to develop a Request far Proposal (RFP) document seeking vendors for benefit consulting services. The city sought proposals from firms to provide benefit consulting services to analyze and compare the city's benefit program to include (but not limited to)the following: plan design and services providers; funding levels; evaluation of projected costs of self-insured vs. fully insured care; options far maintaining a cost effective benefit program and other cost savings options or reductions. In addition, firms were asked to provide ongoing management education on benefit industry trends in regard to the operations of the new Three Waves Clinic and Wellness Center, employee training and employee committee facilitation. The RFP identified specific scopes of work requested from the benefit consulting services firms including: • Provide ongoing assistance in formulating benefit plan objectives and analyzing existing plan design. • Generate reports and analyze benefit utilization. • Prepare comprehensive written recommendations for changes projected to maintain a level of benefit stability, quality and reduction of cost. Specifically recommend any N Z� changes in plan design, service providers, underwriting structure, self insured vs. fully insured comparisons and any other proven ar innovative modification to the city. • Meet with management and employee representatives as requested to gain understanding of local requirements; provide educational and analytical services; explain written reports; facilitate council workshops or meeting as requested. • Calculate annual funding level recommendation for health insurance program by August 1 of each year. • Coordinate the bid process for contract service providers including network provider, third party administrator, prescription drug provider, stop loss provider and transplant rider provider. • Provide employee communication materials. The RFP was issued on February 18, 2015. ANALYSIS The RFP's were due March 17, 2015. Five proposals were received from the following firms: Associated Financial Group, The Benefit Services Group, Inc., Hays Companies of Wisconsin, Horton Group and Willis of Wisconsin. The committee evaluated the proposals against the RFP's stated criteria which included technical requirements, implementation strategy and timelines, demonstrated performance of proposed services elsewhere in the public sector, demonstrated expertise of resources to address the scope of services, timeliness and professionalism of on-going support, and cost and quality of services. Based on this evaluation review the evaluation committee concluded three firms (Associated Financial Group, Hays Companies of Wisconsin and Willis of Wisconsin) best met the RFP criteria and invited the firms for presentations about their services. From the presentations the evaluation committee concluded the proposal from Associated Financial Group (AFG) provided several service enhancements and tools to the city's current benefit consulting services. Some of these included their large public sector client base(over 36+ cities/counties and 100+ school districts); their wide scope of training tools, webinars and resources for multiple disciplines including supervisory, management, safety/risk; their in-house legal resources of six attorneys for their "HR Hotline" to address human resource issues; their ability to customize detailed analysis and reports to manage benefit programs including benchmarking, claim analysis, plan modeling and funding/levels reporting and their outstanding references of proven results from current clients. In addition, AFG is very familiar with the goals and objectives of the Three Waves Clinic and Wellness Center as they also provide the benefit consulting services for both the Oshkosh Area School District and Winnebago County. With their familiarity of the clinic AFG will be able to immediately apply their resources to reviewing our current benefits structure as well as future analysis and options. Based on AFG's proposal and the importance of analyzing and controlling the city's health insurance costs, it was the consensus of the evaluation committee and the City Manager that AFG presented the best proposal to provide the city's benefit consulting services. Assuming Council approval of this recommendation staff anticipates the following timelines: an initial client service plan meeting to determine benefits needs and strategic planning before May 1, 2015 with plan updates/reviews/options/recommendations anticipated for a council workshop by early summer, 2015. FISCAL IMPACT Funding for the benefit consulting services is budgeted in the annual Health Insurance operating budget. The 2015 Health Insurance operating budget allocated $54,000 for these services. Due to the increasing federal and regulatory compliance requirements the committee concluded additional services and analysis would be needed to sustain a competitive benefits package and meet our fiduciary responsibilities. The City has worked to secure a proposed five year agreement with AFG to provide benefit consulting services. With this new agreement AFG will provide the city with requirements of compliance and estimated costs of the Affordable Care Act. The financial terms include matching the 2015 consulting fees budget of $4,500/month for the balance of Year 1 (May 1, 2015—December 31, 2015); fees of$5,600/month for Year 2 and Year 3 ($67,200 annually); and no more than a 3% increase to the fees for Year 4 and Year 5. In addition the proposed agreement includes AFG's "HR Hotline" legal resource for no additional charge for each of the five years. The committee recommends adopting this proposed five year agreement as it provides a competitive rate for these services. Costs for these services are charged to A/N# 601-0903-6401-00000. In order to ensure a successful transition with AFG, our current benefits consultant (The Horton Group)will provide their services through May 31, 2015. This will result in an overage of$4,500 to the 2015 Health Insurance operating budget to $58,500. There are sufficient reserves in the health insurance fund to cover this overage. RECOMMENDATION Section 12-16 of the Municipal Code provides that subject to the approval of the City Manager professional services of a specialized nature may be procured without following a competitive bidding or quotation process. In accordance with Section 12-16 and because this agreement is in excess of $75,000, Purchasing recommends that the Common Council award this five year benefit consulting services agreement to Associated Financial Group, 711 Eisenhower Drive, Kimberly, WI 54136 for $36,000 in 2015, $67,200 in 2016 and 2017, and an increase in fee no more than 3% in 2018 and 2019. Respectfully Submitted, Approved: �.., ,�� , , Jon G. Urben, General Services Manager Mark A.Rohloff, City Manager cc John Fitzpatrick, Assistant City Manager,Director of Administrative Services