Title
Resolution Authorizing the Award of Contract # 2016-0951 to United Healthcare, for Administrative Services for the City’s Medical Insurance
Body
Department: Human Resources
Council District: N/A
Public Hearing: N/A
Advertising Date/By: N/A
Contact 1 and Phone: Connie Hammond, Human Resources Department Director, 336-373-4629
Contact 2 and Phone: Joan Blackburn, Total Compensation Manager, 336-373-2710
PURPOSE:
The City of Greensboro contracts for administrative services for its medical insurance. This contract will exceed $100,000 which requires City Council approval.
BACKGROUND:
During its August 16, 2016 Council meeting, Council approved extending its contract with United Healthcare for provision of administrative services for its medical insurance for one year, effective January 1, 2017 through December 31, 2017. In addition, Human Resources staff is also working with its health and welfare professional services consultant to initiate and administer a new RFP process for these services in 2017. A project timeline has been requested from the consultant and will be available in January, 2017.
BUDGET IMPACT:
The total estimated contract value is $1,485,960. Funds for this contract are available in fiscal year 2016-17 and funds for the remaining contract period will be available in subsequent fiscal year budgets.
Costs: The total administrative only costs vary depending on the number of employees enrolled in the plans. The following year to year comparison is projected based on medical plan enrollment of 3,500 active and retired employees.
|
Category |
2016 Projected Costs |
2017 Projected Costs |
Savings |
|
Administrative (ASO) Fee |
$1,706,040 |
$1,485,960 |
$220,000 |
|
Pharmacy Costs |
$10,106,700 |
$9,113,700 |
$993,000 |
Credits One Year Contract:
• $25,000 Communications Credit
• $50,000 Wellness Credit
• 44.20% Provider Network Discount Guarantee
Total Negotiated Savings and Credits over the one year contract period are $1,288,000
RECOMMENDATION / ACTION REQUESTED:
City Council is requested to approve the renewal of the medical administrative services contract # 2016-0951 with United Healthcare.