HomeMy WebLinkAbout16-Human Resources
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From:
Linn Livingston, Director
of Human Resources
Subject: Broker and Health
Administration Services.
Dept: Human Resources
Date: July 9, 2007
MICC Meeting Date: July 16, 2007
Synopsis of Previous Council Action:
Recommended Motion:
Authorize the City Manager to negotiate the terms of the contract with Mercer Health &
Benefits for broker and health administration services.
'~~ M"~
Signatur~
Contact person: Linn Livinaston
Phone: _384-5161
Supporting data attached:
Ward:
FUNDING REQUIREMENTS: Amount:
None with this action
Source: (Acct. No.)
(Acct. Description)
Finance:
Council Notes:
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120- J~
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Agenda1tem No._
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Staff Report
Subiect:
Broker and health administration services.
Backt!:round:
Selection Process Summary
In June 2007, the City of San Bernardino Human Resources Department solicited bids for health
insurance broker services. In response to the RFP, seven firms submitted proposals. Firms that
submitted proposals included:
ABD Insurance and Financial Services
Alliant Insurance Services
Aon Employee Benefits Consulting
Gallagher Benefit Services, Inc.
Mercer Health & Benefits
Morgan & Franz Insurance and Administrative Services
Rael & Letson Consultants and Actuaries
In June, proposals were reviewed by an evaluation committee, which consisted of the Deputy
General Manager of Water, Director of Finance, Deputy Director of Finance, Director of
Facilities Management, Director of Human Resources, and Human Resources Supervisor. Based
on the review, the committee short-listed three firms including:
Alliant Insurance Services
Aon Employee Benefit Consulting
Mercer Health & Benefits
Interviews with the above three firms were conducted by the evaluation committee on July 10,
2007. Following the interviews, the evaluation committee discussed and came to a consensus to
recommend selection of Mercer Health & Benefits.
Mercer Health & Benefits is a wholly owned subsidiary of Marsh & McLennan Companies, Inc.
a Fortune 500 diversified financial services company. They are the largest benefit consulting
firm in the world, yet they deliver local services with experienced and expert staff. Mercer has
extensive experience working with public sector employers and labor organizations.
Mercer has experience with a variety of health plans: HMOs, medical indemnity and PPO plans,
consumer-directed plans, carve-out coverages such as Prescription Drug plans, and integrated
disease management programs. They also have experience consulting on various supplemental
health coverages, including dental plans, vision plans, prescription benefit plans and mental
health care plans, as well as specialized programs for retirees.
Because Mercer is the largest benefit consulting firm in the world they are constantly interacting
with senior level staff at all major health carriers for their clients. As a result, Mercer has more
market share with carriers than any other firm, which gives them the ability to negotiate the very
best health care rates for their clients. Additionally, Mercer is very sensitive to our employee
needs and the continuity of our health care coverage. Mercer currently provides services to the
City of Riverside, County of San Bernardino, County of Orange and the City of Anaheim as well
as many other public entities.
Mercer has proposed health benefits consulting and administration fees that are very competitive.
They have guaranteed their annual consulting fees for three years, which are the lowest of all
three brokers evaluated at $140,000. Additional fees for administration services will be charged
as a flat fee based on negotiations. In addition, Mercer is placing a significant amount of their
fees at risk (10%) to guarantee they deliver the most appropriate and valuable service to the
City's satisfaction.
Staffing
Mercer Health & Benefits proposes a local core team of four (4) professionals including three (3)
Health & Benefits Consultants, and one (I) Benefits Analyst. The team averages fifteen years of
experience in the benefits field.
With the Mayor and Common Council approval, City staffwill negotiate the terms of the
contract with Mercer Health & Benefits and submit the final contract to the Mayor and Common
Council for approval.
Financial Imoact:
None at this time.
Recommendation:
Authorize the City Manager to negotiate the terms of the contract with Mercer Health & Benefits
for broker and health administration services.
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