Explanation
BACKGROUND:
Funding for medical and prescription drug (Rx) insurance is necessary to insure continuation of the city’s medical and Rx insurance program. Included within the medical program are COBRA and tobacco cessation services. Insurance programs must be maintained in accordance with the negotiated labor contracts. The Human Resources Department requests to contract with United HealthCare Services, Inc. through an extension and to provide funding from February 1, 2025 through January 31, 2026 for this program. This contract was initiated on February 1, 2020.
In February of 2024 the Human Resources Department went out to bid for Medical, Rx, COBRA, and Tobacco Cessation programs under RFP026722. On August 13, 2024, RFP026722 was cancelled. The following notice was provided to all vendors that received notice of the solicitation and any subsequent vendor that expressed interest in the RFP - This RFP is being cancelled due to a previously unknown potential conflict of interest of a scorer. Any submissions and scoring by the City of Columbus are being invalidated. This RFP will be reissued in 2025.
I sincerely apologize for the inconvenience.
Christopher Moses, Director, Department of Human Resources
Due to the cancellation of RFP026722 in August of 2024, the Human Resources Department did not have time to complete an additional RFP process in 2024. Therefore, the Human Resources Department requests a waiver of competitive bidding requirements. The Human Resources Department will comply with the competitive bidding provisions in Chapter 329 of the Columbus City Code in 2025 and enter into a contract beginning February 1, 2026.
Cost estimates for 2025 are based on 2023 and 2024 benefit fund expenditures, using an average of actual city utilization, expected changes due to union negotiations, as well as input from the City's employee benefits consultant. The Human Resources Department requests to extend the contract with United HealthCare Services, Inc. and to provide for funding February 1, 2025 through January 31, 2026.
Outside of the United HealthCare Services, Inc. contract, but included in the medical program appropriations, are the annual PCORI fee appropriations at $75,000.00.
The maximum obligation liability for medical, Rx, COBRA, tobacco cessation services, and PCORI fees from February 1, 2024 through January 31, 2025 is $243,874,000.00.
This ordinance is contingent on the passage of the 2025 insurance appropriation ordinance 3201-2024.
Emergency action is requested to ensure the programs for city employees and eligible terminated participants are able to commence as soon as contractually possible, thereby maintaining continuity of service.
FISCAL IMPACT: Funding is available in the 2025 Employee Benefits Fund for this contract and PCORI fees.
Title
To authorize the Director of the Human Resources Department to enter into a contract with United HealthCare Services, Inc. and to provide all eligible employees medical, Rx and tobacco cessation programs and eligible terminated participants with COBRA coverage from February 1, 2025 through January 31, 2026; to authorize the expenditure of $243,874,000.00 from the Employee Benefits Fund, or so much thereof as may be necessary to pay the costs of said contract and PCORI fees; to waive the competitive bidding provisions of Chapter 329 of the Columbus City Codes; and to declare an emergency. ($243,874,000.00)
Body
WHEREAS, it is in the best interest of the City of Columbus to enter into a contract with United HealthCare Services, Inc. to provide all eligible employees medical, Rx and tobacco cessation programs and eligible terminated participants with COBRA coverage from February 1, 2025 through January 31, 2026; and
WHEREAS, it is necessary to authorize the expenditure of up to $243,799,000.00, or so much thereof as may be necessary to pay contract costs for medical, Rx, COBRA, and tobacco cessation programs; and
WHEREAS, it is necessary to authorize the expenditure of up to $75,000.00, or so much thereof as may be necessary to pay PCORI fees; and
WHEREAS, an emergency exists in the usual daily operations of the Department of Human Resources in that it is immediately necessary to authorize the Director of Human Resources to enter into contract and expend funds to ensure the medical, Rx, COBRA and tobacco cessation programs are able to commence as soon as contractually possible, thereby maintaining continuity of service; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of the Department of Human Resources is hereby authorized to enter into contract with United HealthCare Services, Inc. to provide medical, Rx, COBRA, and tobacco cessation programs from February 1, 2025 through January 31, 2026.
SECTION 2. That the expenditure of $243,874,000.00 or so much thereof as may be necessary for coverage is hereby authorized to be expended as follows:
Department: 4602 | Fund: 5502 | Subfund: 550206 | Program: RM005 | Amount: $4,600,000.00 (Medical Admin fees)
Department: 4602 | Fund: 5502 | Subfund: 550206 | Program: RM006 | Amount: $170,075,000.00 (Medical Claims and PCORI fees)
Department: 4602 | Fund: 5502 | Subfund: 550207 | Program: RM005 | Amount: $110,000.00 (Rx Admin fees)
Department: 4602 | Fund: 5502 | Subfund: 550207 | Program: RM006 | Amount: $69,000,000.00 (Rx Claims)
Department: 4602 | Fund: 5502 | Subfund: 550206 | Program: RM003 | Amount: $40,000.00 (COBRA fees)
Department: 4602 | Fund: 5502 | Subfund: 550206 | Program: RM004 | Amount: $49,000.00 (Tobacco cessation fees)
SECTION 3. That the funds necessary to carry out the purpose of this ordinance are hereby deemed appropriated, and the City Auditor shall establish such accounting codes as necessary.
SECTION 4. That City Council hereby finds it to be in the best interests of the City of Columbus to waive the competitive bidding provisions of Chapter 329 of the Columbus City Codes, and does hereby waive the same.
SECTION 5. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor or ten days after passage, if the Mayor neither approves nor vetoes the same.