HomeMy WebLinkAboutMemo - Employee Benefit Health PlanCITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO:
FROM:
Johnny Martinez
City Manager
Calvin Ellis
Director
Risk Management Department
DATE : September 27, 2011
FILE :
SUBJECT : Bid Waiver for a Professional
Services Agreement for
Employee Benefit Health Plan
REFERENCEAdminiStratiOn Services by CIGNA
ENCLOSURES:
This memorandum serves to request your authorization to seek Commission approval to waive
competitive sealed bidding procedures in order to execute a Professional Services Agreement
with Connecticut General Life Insurance Company (CIGNA), the current provider, for the
provision of Employee Benefit Health Plan Administration Services, for a 2 year period with no
options to extend the contract term., The administration services are broken down into 4 sections:
Part A — Third Party Administrative Services; Part B — Stop Loss; Part C — Prescription Drug
Services; and Part D — Employee Assistance Program Services. This matter pertains specifically
to Parts A, C, and D. Part B — Stop Loss was procured separately and is not a subject of this
matter. If such negotiations fail, or result in a Professional Services Agreement not in a form
approved by the City Commission, then a competitive bidding process will be held. The funding
sources for these services will be from the Risk Management Department's budget line item
05002.301001.523000.0000.00000. The contract period will be for two (2) years with no option
to extend, and with a contract cost not to exceed $1,355,743 per year for Parts A, C, and D.
Resolution #04-0 i 084, approved by the City Commission on September 16, 2004, authorized the
City manager to enter into a Professional Services Agreement with CIGNA and United Benefits
for the provision of Employee Benefit Health Plan in the following 4 sections:
Part A — Third Party Administrative Services (CIGNA);
Part B — Stop Loss (United Benefits);
Part C — Prescription Drug Services (CIGNA); and
Part D — Employee Assistance Program Services (CIGNA).
RFP #03-04-066 was issued on April 5, 2004 by the Risk Management through the Purchasing
Department to competitively bid these services. These agreements were for 3 years with 2
options to renew for two years each commencing January 1, 2005.
In regard to Part B — Stop Loss, the Risk Management Department initiated a reprocurement
process by issuing RFP# 244233 through the Purchasing Department on September 20, 2010.
Resolution #10-0555, approved by the City Commission on December 16, 2010, authorized the
City Manager to execute a Professional Services Agreement with CIGNA for the provision of
Stop Loss Insurance. The term of the contract, with an effective date of January 1, 2011, was for
a one year term with (4) 1-year extension options subject to the annual approval of the City
Commission. The (4) 1-year extension options remain to be exercised for Part B, and this section
will be addressed through normal procurement procedures.
The City of Miami is continually in the process of working diligently to reduce healthcare costs
incurred for the provision of administrative services for the Employee Benefit Health Plan. By
continuing to work with the City's current provider, CIGNA, we may be able to achieve the
needed expense reductions in a process to continue administrative services for the Employee
Benefits Health Plan and minimize costs to the City. As a result of the negotiation process, it is
anticipated that additional expense reductions may be realized to the benefit of the City of
Miami.
Funding is available to cover the cost of these services, which is anticipated not to exceed
$1,355,743 per year in the general operating budget of the Department of Risk Management,
Account Code No. 05002.301001.523000.0000.00000.
y Martinez
C. Manager
Chief Purchasing Officer