Addon.Avemed.healthSouth Miami
To: The Honorable Mayor & Members of the City Commission
Via: Buford R. Witt, Acting City Manager
From: Carmen V. Baker, Acting Human Resources Manager pj
Date: August 17, 2010 Agenda Item No.: PM ®N
Subject: Health Insurance Resolution
Request: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH
MIAMI, FLORIDA, AUTHORIZING THE CITY MANAGER TO RENEW THE CONTRACT
WITH AVMED TO PROVIDE GROUP HEALTH INSURANCE FOR CITY OF SOUTH
MIAMI FULL TIME EMPLOYEES TO BE CHARGED TO DEPARTMENTAL ACCOUNT
NUMBERS RESPECTIVELY; PROVIDING FOR AN EFFECTIVE DATE.
Reason /Need: We have received renewal rates from our current group health insurance carrier, AVMED.
AVMED initially proposed 14.0 % increase; however we negotiated the rate increase to
13.5 %. The City had $662.439 in claims vs. $744.364 in premium. Although, renewal
rates were received from AVMED, the Agent of Record recommended that we seek out
bids from other carriers to ensure that we are being offered competitive rates. Our Agent
of Record solicited bids from eight companies. Bids were received from the following
companies:
Aetna
Declined to quote
AVMED
Submitted proposal
Blue Cross & Blue Shield
Declined to quote
United Health Care
Submitted proposal
Cigna
Submitted proposal
NHP
Submitted proposal
Vista
Submitted proposal
Humana
Submitted proposal
The insurance Committee met to review and compare all the different alternatives. The
Committee Members that participated were as follows:
Maria L. Garcia City Manager's Office
Maria Virguez
Carol Bynum
George Greene
Lisa Morton
James McCants
Maria Stout -Tate
Lorenzo Woodley
Slaven Kobola
Finance
Code Enforcement
Motor Pool (AFSCME)
Police (PBA)
South Miami Community Redevelopment Agency
Parks & Recreation
Parks & Recreation
Public Works & Engineering
The Insurance Committee made a recommendation to the City Commission to renew with
AVMED for another year without any changes to the current benefit plan design.
With the Triple Option, the City would cover the employee rate of $423.25 which is a
(13.5 %). Based on current enrollment assumptions (127 FTE), the annual increase from
this year to next year would be approximately $76,817.28. Current staffing levels are at
144 full time employees.
During the Insurance Workshop with the City Commission, the City Commission
concluded on AvMed as the proposed provider but requested to bring forth a third option
which would be the 2nd Renewal Alternative. Below are the proposed options:
Cost: Option I —.Renewal (AvMed)
Employee Rate: $ 423.25
Total Cost per employee per month ( @127 (Full Time Employees)) = $53,752.75
Annual Premium $645,033.00
Option II — Renewal Alternative (AvMed)
Employee Rate: $ 405.47
Total Cost per employee per month (@ 127 (Full Time Employees)) = $51,494.69
Annual Premium $617,936.28
Option III —,2 nd Renewal Alternative (AvMed)
Employee Rate: $ 377.34
Total Cost per employee per month (@ 127 (Full Time Employees)) _ $ 47,922.18
Annual Premium $575,066.16
Backup Documentation:
• Proposed Resolution
• Proposals from Insurance Vendors
LOW HMO
HIGH HMO
POS
EE
$423.25(city Portion)
$490.92
$569.70
EC
$749.16
$868.93
$1,008.37
ES
$833.82
$967.11
$1,122.31
FAM
$1,248.60
$1,448.21
$1,680.61
With the Triple Option, the City would cover the employee rate of $423.25 which is a
(13.5 %). Based on current enrollment assumptions (127 FTE), the annual increase from
this year to next year would be approximately $76,817.28. Current staffing levels are at
144 full time employees.
During the Insurance Workshop with the City Commission, the City Commission
concluded on AvMed as the proposed provider but requested to bring forth a third option
which would be the 2nd Renewal Alternative. Below are the proposed options:
Cost: Option I —.Renewal (AvMed)
Employee Rate: $ 423.25
Total Cost per employee per month ( @127 (Full Time Employees)) = $53,752.75
Annual Premium $645,033.00
Option II — Renewal Alternative (AvMed)
Employee Rate: $ 405.47
Total Cost per employee per month (@ 127 (Full Time Employees)) = $51,494.69
Annual Premium $617,936.28
Option III —,2 nd Renewal Alternative (AvMed)
Employee Rate: $ 377.34
Total Cost per employee per month (@ 127 (Full Time Employees)) _ $ 47,922.18
Annual Premium $575,066.16
Backup Documentation:
• Proposed Resolution
• Proposals from Insurance Vendors
I RESOLUTION NO.:
2
3 A Resolution of the Mayor and City Commission of the City of South Miami,
4 Florida, authorizing the City Manager to renew the contract with AvMed to
5 provide group health insurance for City of South Miami full time employees
6 to be charged to the departmental account numbers respectively; Providing
7 and effective date.
8
9
10 WHEREAS, the Agent of Record (Employee Benefits Consulting Group) secured 8 bids
II for the City's Group Health Insurance and recommended AvMed as the lowest responsive
12 bidder; and
13
14 WHEREAS, the City Commission compared the insurance rates, benefit plan designs,
15 provider network as well as our previous claims experience /ratio; and
16
17 WHEREAS, the Insurance Committee unanimously voted to renew with AvMed for
18 another year; and
19
20 WHEREAS, the City Commission wishes to renew Group Health Insurance with AvMed
21 to all full -time employees; and
22
23 WHEREAS, with the selection of Av Med, the designated Agent of Record is Employee
24 Benefits Consulting Group until contract expiration or until otherwise determined by either
25 party.
26
27 NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY
28 COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, THAT;
29
30 Section 1. The contract shall be effective October 1, 2010 and shall be renewable on an
31 annual basis.
32
33 Section 2. This engagement is at will and shall continue until either party terminates the
34 engagement by giving written notice to the other party. The City shall not be charged for agent
35 of record services; Employee Benefits Consulting Group shall be compensated by the insurer.
36
37 Section 3. This resolution shall take effect immediately upon approval.
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PASSED AND ADOPTED this day of
ATTEST:
CITY CLERK
READ AND APPROVED AS TO FORM:
CITY ATTORNEY
2010.
APPROVED:
MAYOR
Commission Vote:
Mayor Phillip Stoddard:
Vice Mayor Valerie Newman:
Commissioner Brian D. Beasley:
Commissioner Velma Palmer:
Commissioner Walter Harris: