HomeMy WebLinkAbout15- Human Resources ORIGINAL
CITY OF SAN BERNARDINO— REQUEST FOR COUNCIL ACTION
From: Linn Livingston Subject: BROKER AND HEALTH
ADMINISTRATION SERVICES
Dept: Human Resources
Date: April 28, 2010
M/CC Meeting Date: May 3, 2010
Synopsis of Previous Council Action:
On July 16, 2007, Mayor and Common Council authorized the City to negotiate terms of
contract with Mercer Health & Benefits for broker and health administration services.
Resolution No. 2007-369.
On September 4, 2007, Mayor and Common Council authorized the execution of an agreement
with Mercer Health and Benefits LLC to provide broker services for the City's employee Health
Care Program for a period of three (3) years.
Recommended Motion:
1. Authorize the Director of Human Resources to negotiate the terms of the contract with
Mercer Health& Benefits for broker and health administration services.
Signature
Contact person: Linn Livingston Phone: 384-5161
Supporting data attached: Ward:
FUNDING REQUIREMENTS: Amount None with this action
Source: (Acct. No.) 001-092-5502
(Acct. Description) Health&Life Insurance
Finance:
Council Notes:
Agenda Item No. 15'
5 - 3-2oto
P.tplactwtnt-T- etM
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Staff Report
SUBJECT
Broker and health administration services.
BACKGROUND
On July 16, 2007, Mayor and Common Council authorized the City to negotiate the terms of
contract with Mercer Health & Benefits for broker and health administration services. On
September 4, 2007, Mayor and Common Council authorized the agreement for a period of three
(3)years.
Mercer is a wholly-owned subsidiary of Marsh&McLennan Companies,Inc.; a Fortune 500
diversified financial services company. Mercer is the largest benefit consulting firm in the
world,yet it delivers local services with experienced and expert staff and has extensive
experience working with public sector employers and labor organizations.
Because Mercer is the largest benefit consulting firm in the world,it is 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 provides the ability to negotiate the very
best health care rates for their clients. Additionally, Mercer is very sensitive to our employee's
needs and the continuity of our health care coverage.
In February 2010,the Human Resources Department solicited bids for health insurance broker
services. In response to the Request for Proposal (RFP), seven(7) firms submitted proposals.
Firms that submitted proposals included:
BB&T John Burnham Insurance
Dickerson Employee Benefits
Holmes/Murphy Business Insurance and Financial Services
Keenan&Associates
Mercer Health&Benefits
Morgan&Franz Insurance and Financial Services
Wells Fargo Insurance Services
In March 2010,proposals were reviewed by an evaluation committee that short-listed four(4)
firms including:
BB&T John Burnham Insurance
Keenan&Associates
Mercer Health&Benefits
Wells Fargo Insurance Services
Interviews with the short listed firms were conducted by the evaluation committee on March 24,
2010. Following the interviews,the evaluation committee discussed and came to a unanimous
consensus to recommend and appoint Mercer as the City of San Bernardino's Administrator for
Health Care&Benefits.
Mercer's health benefits consulting/broker and administration fees are very competitive.
Consulting/broker fees have been guaranteed at $275,000 for FY 2010/11; $282,500 for FY
2011/12; and$290,000 for FY 2012/13. These fees are based on basic annual benefits which
include consulting services,administrative on-line services, consolidated billing services,call
center services, communication services, Section 125 FSA administration,retiree medical,open
enrollment and COBRA. In addition, Mercer is placing a significant amount of their
consulting/broker fees at risk(10%)to guarantee delivery of the most appropriate and valuable
service to the City's satisfaction.
Mercer has helped the City to hold gross cost increases at 2.9% FY 2008, 5.1% FY 2009, and
7.3%FY 2010, which is significantly below the average trend of 12-13% annually. The Human
Resources Department looks forward to building upon the consistency and continuity of Mercer
and anticipates an increased stability to the benefits program.
The Human Resources Department is requesting authorization to negotiate terms of the contract
for a period of three(3) years with an option of two (2), one(1)year extension.
FINANCIAL IMPACT
Account Budgeted Amount: N/A Balance as of: N/A
Balance after approval of this item: N/A
None at this time.
RECOMMENDATION
1. Authorize the Director of Human Resources to negotiate the terms of the contract with
Mercer Health&Benefits for broker and health administration services.
HR/Agenda Item:SR.MERCER.2010
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