From
Lisa Norris, Human Resources Director
Title
Agreement with United Health Care (UHC) for Medical and Prescription Claims Administration Services and an onsite Wellness Coordinator beginning January 1, 2013 in the amount of $504,000. Guaranteed renewal rates are quoted through December 31, 2015 with annual renewal options beginning January 1, 2016 if authorized and approved by the City Manager so long as the renewals do not increase by more than 25% of the originally quoted fees and such fees are appropriated annually in the Employee Insurance Fund budget.
Presenter
Lisa Norris, Human Resources Director
Recommended Action
Approve
Analysis
The City has utilized UHC for claims administration services since January 2004, and for Wellness Coordinator Services since October 2011. The current contracts for both services were due to expire December 31, 2012, so the City solicited proposals in May 2012 for services beginning January 1, 2013. The City requested multi-year guarantees and/or renewability options. Competitive proposals were received from Cigna and UHC, with both offering similar services. Based upon UHC's existing long-term relationship with the City, first-year rates renewing at a reduced fee from current, lowest renewal rates quoted in subsequent years, and having an existing Wellness Coordinator onsite through UHC, the City recommends UHC as the vendor of choice. The attached Comparison Summary shows first year fees and subsequent guaranteed year fees through December 31, 2015. UHC provides an excellent wellness coordinator onsite to the city. She is housed in Human Resources and functions as a staff member. She has been an excellent asset to our staff and employees through her dedication to all wellness related strategies, programming, communication and activities. UHC has provided outstanding customer services to staff and our employees on any claims issues that arise and has been an excellent partner in our wellness efforts, communication plan, and in working with our Benefits Consultant on any reporting needed to assess our overall claims and health. They partner with staff almost daily on any needs and resolve customer concerns or issues promptly. They participate routinely in our health fairs, and provide materials for distribution in our wellness efforts to keep employees informed. Fees are shown on the attachment for the first year and guaranteed renewal rates provided through December 2015. UHC also agreed to annual renewals beginning January 2013 if mutually agreed upon by the City and UHC, with justification provided, and so long as funds are budgeted and appropriated annually in the Employee Insurance Fund budget.
Financial Consideration
The annualized cost for UHC claims administration services and related fees as quoted is estimated at $457,773 and for wellness coordinator services at $46,125 to total $503,898 projected to be paid to UHC. Claims Administration is currently budgeted and proposed at $458,000 in the "Admin/Utilization Fees" line item in the Employee Insurance Fund for FY 2012/2013. Wellness Coordinator fees are paid from "Other Services and Charges" line item as a contractual service which has a proposed budget of $68,771 for the new fiscal year. As a result, expenses projected are within the proposed budget and no additional funding is requested.