Memorandum 15-063 Benefit Broker/Consultant RFP

Memorandum 15-063

TO:                      MAYOR WYTHE AND CITY COUNCIL

THRU:                Katie Koester, City Manager

FROM:                Andrea Browning, Personnel Director

DATE:                 May 6, 2015

RE:                       2015 Benefit Broker / Consultant RFP

The City of Homer switched from a self-insured health care plan to a fully-insured plan in January 2015, currently utilizing Premera Blue Cross Blue Shield of Alaska for the employee health insurance plan.

The City issued a Request for Proposal in August 2011 for Insurance Benefit Broker and Consulting Services, which was awarded to Mercer Health Benefits of Spokane, Washington.  The City utilized Mercer through December 31, 2014 – paying them $48,000 annually for their services.

On October 27, 2014 City Council passed Resolution 14-112 authorizing an RFP for employee benefit broker and consulting services, with the contract term to begin on January 1, 2015.

After much consideration, then City Manager Wrede and Personnel Director Browning decided to delay issuing the RFP in order to give the City time in the upcoming months to decide what the scope of work would be, given the City’s switch to a fully-insured plan, and additionally save some funds during the first half of the year.

The City will be able to issue an RFP with a more limited, specified scope of work at this time.  This should bring the cost of the services down, while still allowing the City to define cost-effective opportunities for improvement in design and administration of the health insurance benefit program, as well as assisting the City with navigating through the complexity of compliance with ever-changing state and federal regulations.