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City of North Miami Beach
17011 NE 19 Avenue
North Miami Beach, FL 33162
305-947-7581
www.citynmb.com


MEMORANDUM

 
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TO: Mayor and City Council
FROM: Ana M. Garcia, City Manager
VIA: Rose Amberson, Director of Human Resources
Brian K. O’Connor, Chief Procurement Officer
DATE: Tuesday, July 21, 2015
RE: Resolution No. R2015-63 (Brian O'Connor, Chief Procurement Officer)
BACKGROUND ANALYSIS:

After five years with the same major medical health insurance carrier and following the City's Strategic Plan for a financially sound organization, the City of North Miami Beach (“City”) issued the subject Request for Proposals (RFP) No. 2015-06 for the purpose of selecting a health insurance carrier to provide high-quality medical care with competitive rates.  The City’s health insurance options benefit 795 lives, including 444 subscribers including City employees and retirees.

Notices were electronically sent to more than 800 potential local and national vendors, as well as advertised in the Miami Daily Business Review (4/21/15), and posted on DemandStar by Onvia, the City’s website and in the lobby of City Hall.  Additionally, all registered City of North Miami Beach vendors under the commodity(s) matching this solicitation’s scope were notified via email.  The solicitation (available for download) and a brief description were posted on the City’s website.

A non-mandatory pre-proposal conference was held on May 6, 2015.  On May 13, 2015, the City took receipt of responses from three (3) carriers.  One submittal was deemed non-responsive due to missing required documentation and forms.  The remaining two submittals, from Aetna and UnitedHealthcare, were evaluated by the Review Committee and approved for final consideration.  The Committee directed the City’s health insurance broker of record, Wells Fargo Insurance Services, to meet individually with the proposing carriers and their underwriting teams, to further refine their plan designs and corresponding pricing. As a result, concessions made by the proposers and competitive HMO plan designs, and the carriers prepared final presentations which were reviewed by the Committee.  Procurement conducted reference checks of the two firms, revealing no major issues of concern from governmental agencies.

Taking into account the proposals, presentations and reference checks, the Review Committee’s final ranking revealed UnitedHealthcare as the number one ranked firm and Aetna as second ranked.

RECOMMENDATION:

It is the Review Committee’s recommendation that the City Manager or designee negotiate an agreement with UnitedHealthcare pursuant to RFP No. 2015-06.  If said negotiations are unsuccessful, negotiations shall begin with the second-ranked proposer, Aetna.  Initial agreement will be for one fiscal year beginning October 1, 2015.  Additional renewals will be at the discretion and direction of the Human Resources Director, City Manager and the City’s Health Insurance Broker.

 

FISCAL/BUDGETARY IMPACT: The City of North Miami Beach annually remits approximately 3.8 million dollars to its major medical carrier for costs associated with health insurance for employees and retirees.  There are various levels of cost sharing with employees and retirees which result in a lesser total cost to the City, however, the City must be cognizant of the total value of the contracts when negotiating. The City’s actual claims/utilization, combined with several consecutive years of minimal rate increases, has led to prospective increases of more than thirty percent (30%) to some of our products without negotiation or plan changes.  With rigorous negotiation and the calibration of plan design changes which factor in the local market, a target of fifteen percent (15%) should be expected.
 
ATTACHMENTS:
Intent To Award
Resolution No. R2015-63