Explanation
BACKGROUND: As a result of a Request For Proposal process in accordance with Section 329.12 of the Columbus City Codes, seven medical insurance bid responses were reviewed by the City's Evaluation Committee, comprised of five members.
Each proposal was evaluated on the following criteria as required by section 329.12: competency to perform, quality and feasibility of the offerors technical proposal, ability to perform the required service competently, past performance, and the cost structure of the proposal. United Health Care Services, Inc. is recommended as the medical plan administrator. United Health Care offered the lowest net costs. The medical administrative rate of $24.37 per employee per month for the first two year, $25.12 in year two, and $26.37 the third year; renewable annually. The discount guarantee is based on the fixed amount of fees at risk. UHC placed fees at risk with target discount percentages. Cost containment, disease management, training, and utilization review services, are also included in the medical administrative fee. United Health Care represents the ability to duplicate negotiated benefits in both traditional and PPO programs, provides dedicated claims and customer service and, offers a broad PPO hospital and physician network.
Contract compliance number is 36-2739571
To maintain insurance programs in accordance with the negotiated labor contracts, additional funding of the medical insurance program is necessary to insure continuation of employee insurance coverage. Cost estimates were based on 2004-2005 trust fund expenditures using a three year average of actual city utilization, expected changes due to union negotiations, as well as input from insurance carriers and input from the City's employee benefits consultant.
FISCAL IMPACT: To enter into a contract with United Health Care Services, Inc. to establish the maximum obligation liability, and to authorize the expenditure of $51,721,317.00 for medical plan administration services from February 1, 2006 through January 31, 2007. Funding is available in the 2006 budget for this contract. This ordinance is an emergency measure to ensure continued insurance coverage as negotiated by union contracts.
Title
To authorize the Human Resources Director to enter into a contract with United Health Care Services Inc. to provide all eligible employees medical insurance coverage from February 1, 2006 through January 31, 2007 and to authorize the expenditure of $51,721,317.00 from the Employee Benefits Fund, or so much thereof as may be necessary to pay the costs of said contract; and to declare an emergency. ($51,721,317.00)
Body
WHEREAS, it is in the best interest of the City of Columbus to enter into a contract with United Health Care Services, Inc. to provide all eligible employees medical insurance from February 1, 2006 through January 31, 2007; and
WHEREAS, United Health Care Services, Inc. has indicated its intention to use an SBE and report the dollar amount quarterly.
WHEREAS, it is necessary to authorize the expenditure of up to $51,721,317.00, or so much thereof as may be necessary to pay contract costs for medical insurance services; and
WHEREAS, an emergency exists in the usual daily operation of the City of Columbus in that it is necessary to enter into a contract and to pay the associated contract costs to ensure continued insurance coverage and for the preservation of the public health, peace, property, safety and welfare;
Now, Therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Human Resources Director is hereby authorized to enter into a contract with United Health Care Services, Inc. to provide medical insurance to all eligible employees from February 1, 2006 through January 31, 2007.
SECTION 2. That the expenditure of up to $51,721,317.00 or so much thereof as may be necessary for coverage from the Employee Benefits Fund, Fund 502, Department of Human Resources NO. 46-01, is hereby authorized and directed.
Div. No. |
OL1 |
OL3 |
OCA |
Subfund |
Amount |
Type |
46-01 |
3 |
3362 |
460007 |
208 |
2,306,790.00 |
Administrative Fee Medical |
46-01 |
3 |
3363 |
460004 |
208 |
49,414,527.00 |
Medical Claims |
TOTAL |
|
|
|
|
51,721,317.00 |
|
SECTION 3. 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