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CITY SECMARY
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6 PROFESSIONAL SERVICES AGREEMENT
y� FOR BENEFIT CONSULTING SERVICES
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This PR SERVICES AGREEMENT("Agreement")is made and entered into by and between the
CITY OF FORT WORTH(the"City"), a home rule municipal corporation of the State of Texas, acting by and
through Susan Alanis, its duly authorized Assistant City Manager, and Holmes Murphy and Associates, LLC
("Consultant" or "Contractor"), an Iowa limited liability company authorized to do business in the State of
Texas and acting by and through Dennis Bishop, its duly authorized President, each individually referred to as a
"parry"and collectively referred to as the"parties."
1.0 CITY'S OBLIGATIONS
1.01 The City shall use its best efforts to provide non-confidential City records, including utilization
information,for the Consultant's usage in performing the Services for and on behalf of the City.
1.02 During the Initial Term, the City shall pay the Consultant an annual fee of ONE HUNDRED
FORTY-FIVE THOUSAND AND N0/100 DOLLARS ($145,000.00) per Contract Year to
perform the Services specified herein subject to the Performance Guarantee Adjustment as
detailed below. For purposes of this provision a "Contract Year" refers to a twelve-month
period commencing on November 1 and ending on the following October 31. The annual fee
shall be paid in twelve equal monthly installments. Consultant shall not perform any additional
services for the City not specified by this Agreement unless the City requests and approves in
writing the additional costs for such services. The City shall not be liable for any additional
expenses of Consultant not specified by this Agreement unless the City first approves such
expenses in writing.
1.03 Performance Guarantee Adjustment
Compensation under Section 1.02 shall be subject to adjustment based on objective and
subjective savings (i.e. "hard dollar and soft dollar value") in fees and costs realized by City
with respect to its Employee Benefits programs during each Contract Year. The Consultant
guarantees a minimum of ONE HUNDRED FORTY FIVE THOUSAND DOLLARS
($145,000) in savings per Contract Year (Minimum Savings Threshold). The evaluation of the
objective and subjective savings will be determined annually and a reconciliation will occur at
the end of each Contract Year to validate that the performance guarantee has been met. If City
does not realize savings that meet or exceed the Minimum Savings Threshold, Consultant shall
remit to City a Performance Guarantee Rebate in an amount equal to the total by which actual
savings fall below the Minimum Savings Threshold for the preceding Contract Year.
Remittance of the Performance Guarantee Rebate shall occur no later than the close of business
on the 900' day after the end of the Contract Year subject to rebate. If Consultant is able to
generate savings in excess of the Minimum Savings Threshold, Consultant shall be entitled to
no additional compensation.
2.0 CONSULTANT'S OBLIGATIONS
2.01 The Consultant will provide the following services for and on behalf of the City in accordance
with best commercial practices:
a. Review of employee health benefits for quality of the benefits provided, cost
effectiveness, competitiveness, and plan administration (by both the City and the
provider). Make recommendations concerning any changes in terms, conditions, and
limits;
b. As necessary, perform actuarial studies to determine the long-term cost/savings of
benefits,benefit revisions, and proposed benefit enhancements;
C. Perform the City of Fort Worth's annual GASB valuation as required;
d. Conduct review of health and welfare benefit programs and their cost effectiveness,
including suggesting innovative solutions as issues evolve;
e. Assist in the general management of benefit plans, including but not limited to
developing and monitoring administrative processes to assure performance by selected
vendor(s);
f. Evaluate benefit trends.and conduct benchmark (City of Fort Worth specific) surveys
and market surveys as needed;
g. Act as contact between insurance agents and representatives who make inquiries
regarding the City's health and welfare benefits offered through the City;
h. For health and welfare benefit plans, review performance of the vendor and negotiate
contract renewal rates;
i. Assist in drafting and redrafting the health care plan's Plan Document and its Summary
Plan Description;
j. Attend and make presentations at meetings of the retiree and/or employee Health
Benefits Advisory Committee regarding employee/retiree benefits;
k. Attend, participate and make presentations at City Council and/or Council Committees
meetings as needed;
1. Assist with preparation of Federal and State agency reports;
in. Annually prepare five year budget projections for the healthcare fund;
n. Annually prepare report showing claims that are incurred but not reported(IBNR);
o. Annually prepare financial reporting related to the healthcare plans needed for the
City's comprehensive annual financial report(CAFR);
P. Perform and provide benefit modeling as needed or requested;
q. Serve as lead on Contract Negotiations and Implementation of benefit contracts;
r. Attend Open Enrollment meetings as requested;
S. Serve as lead on Development of Open Enrollment Strategy;
t. Assist with the review of SPDs as needed or required for benefit plans: i.e., healthcare,
dental,life/AD&D, Supplemental Life,LTD,HSA with City Legal Counsel and or third
party Legal Counsel;
U. Develop all required employee/retiree benefit notices;
V. Develop customized communications as needed for open enrollment and other
communications as needed or requested;
W. Provide consulting services for the City's Wellness, Disease Management, and Near
Site Clinic programs, including possible development of a narrow network or similar
measure;
X. Assist,to the extent qualified,in dealing with escalated EE&Family Advocacy issues;
Y. Conduct and report on online employee/participant surveys as recommended or
requested by the City of Fort Worth;
Z. Present annual benefit strategy,to include review of prior-years' utilization information
to prepare models/data showing trends on claims and utilization including medical,
dental, and vision coverages for the purpose of making recommendation to the City for
optimizing future health benefits while controlling costs;
aa. Assist with annual renewals of contracts associated with health benefits, TPA, EAP,
Stop Loss, etc., , including negotiation of any changes in contracts, including, but not
limited to,the following:
(1) Management of the negotiations with the carriers geared to achieving cost
containment;
Professional Services Agreement—UW/Holmes Murphy Page 2 of 10
(2) RFP Development to involve tailoring the RFP to the exact desires, needs and
financial directions provided by the City;
(3) Exploration of funding alternatives;
(4) Evaluation of vendor responses to assure that variation in coverage and costs
are identified;
(5) Conducting finalist interviews, along with the City, to explore intangibles such
as personalities, service orientation and responsiveness;
(6) Providing renewal analysis report, based on renewal negotiation, to cover
program and claims cost projections as well as complete information on benefit
designs; and
(7) Closely collaborating wih City on all recommendations;
bb. If Health Benefits, TPA, EAP, Stop Loss, etc., plans are marketed, prepare bid
specifications, identify the appropriate 'markets, analyze proposals submitted, make
recommendations, and assist in negotiation of (preferably multi-year) contracts and
review resulting contracts to ensure accuracy of coverage, terms, and conditions in
comparison to request for proposals;
CC. Monitor and, on request, audit ongoing contracts, including provider plan
administration, provider compliance with contract, provider compliance with
performance goals, and incurred claims;
dd. Provide annual claims review and recommendations on funding, projections, rate
structures and required reserves to maintain financial viability of the health benefits
program. This will include assisting the City staff in the preparation of projected new
budget figures for the Health/Dental Benefits, Stop Loss,etc.;
ee. Inform the City of health care benefits or industry practices, costs, and trends on a local,
regional and national basis and their effects on the public and private sector;
ff. Inform the City of the regulatory environment and of any State or Federal legislation or
regulation affecting employee benefits, including but not limited to HIPAA, COBRA,
HSA, FSA and other IRS updates and regulations. Assist the City with maintaining or
achieving compliance with such regulations. Such assistance shall include, but not be
limited to,the following:
(1) Providing legislative updates;
(2) Evaluating plan design to confirm compliance with state and federal
regulations;
(3) Reviewing benefit plan documents for accuracy;
(4) Conducting comprehensive review of summary plan description, contracts and
employee summaries to outline variances and inconsistencies which may lead
to employee litigation;
(5) Ensuring that ACA, COBRA, HIPAA, HSA and FSA processes are in
compliance; and
(6) Conducting periodic training sessions on regulatory issues as needed;
gg. Be available as needed to answer questions and resolve issues that arise during the year
regarding the employee benefits contract administration and service provisions;
hh. Provide advice on improving the City's wellness program and measuring effectiveness;
ii. Prepare and provide detailed monthly, quarterly, and annual reports on the plan's
expenditures by items such as coverage lines, employee/retiree classifications,
dependent classes, service zones, types of provider, and other items as requested by the
City;
J. Fully inform the City as to its options for providing existing and future health/dental
and any other benefit plans;
kk. Assist the City with implementation plans for any coverage/services, integrating
appropriate assignments of duties to vendors;
Professional Services Agreement—CFW/Holmes Murphy Page 3 of 10
I Provide assistance with developing/coordinating data from carriers for reporting
requirements such as GASB regulations and other financial reporting;
mm. Maintain claims data for City of Fort Worth Group Health Plan and respond to requests
for claims data as needed;
nn. Provide claims data analysis as requested to determine cost drivers,utilization,etc.; and
oo. Provide coordination, monitoring and filing of reinsurance claims with the stop loss
carrier.
2.02 The Consultant shall provide the Services required herein in accordance with the experience and
services outlined in Consultant's proposal dated July 7, 2016, which section by this reference is
incorporated herein for all intents and purposes.
2.03 The Consultant shall perform all services under this Agreement with the care and skill
ordinarily used by members of Consultant's profession practicing under the same or similar
circumstances, time and locality. Consultant shall use its areas of expertise in marketing
leverage, clinical management for utilization monitoring, disease management and wellness
management; compliance services; actuarial services; and underwriting. The Consultant shall be
responsible for the technical accuracy of its services and documents resulting therefrom.
2.04 Consultant agrees to and shall indemnify and hold harmless and defend the City, its officers,
agents, and employees (collectively the "City Indemnitees") from and against any and all
claims, losses, damages, causes of action, suits and liability of every kind, including all
expenses of litigation, court costs, and attorney's fees, for injury to or death of any person, for
damage to any property, or for any breach of contract, arising out of, or in connection with the
work done by Consultant under this Agreement caused by the negligence of Consultant. It is the
expressed intention of the parties hereto, both Consultant and the City, that the indemnity
provided for in this paragraph is indemnity by Consultant to indemnify and protect the City
Indemnitees from the consequences of Consultant's own negligence, whether that negligence is
the sole cause or a concurring cause of the resulting injury, death or damage. Such indemnity
shall not apply, however,to liability arising from the personal injury, death, or property damage
of persons that is caused by or results from the sole negligence of the City or the City
Indemnitees. The indemnity provided for in this section shall survive the termination or
expiration of this Agreement.
2.05 Throughout the term of this Agreement, Consultant at its own expense shall purchase, maintain
and keep in force and effect insurance against claims for injuries to or death of persons or
damages to property which may arise out of or result from Consultant's operations and/or
performance of the Services under this Agreement,whether such operations and/or performance
be by Consultant, its agents, representatives, volunteers, employees or subcontractors or by
anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them
may be liable.
Any insurance or self-insurance maintained by the City, its officials, agents and employees shall
be considered in excess of Consultant's insurance and shall not contribute to it.
The following is a list of standard insurance policies along with their respective minimum
coverage amounts required in this contract:
Commercial General Liability(CGL)
General Aggregate: $1,000,000
Products &Completed Operations: $1,000,000
Personal&Advertising Injury: $1,000,000
Professional Services Agreement—CFW/Holmes Murphy Page 4 of 10
Per Occurrence: $500,000
a. Coverage shall be at least as broad as ISO CG 00 01
Business Automobile Policy(BAP)
Combined Single Limits: $1,000,000
a. Coverage for"Any Auto."
Workers' Compensation Insurance
Statutory Limits
Employer's Liability:$500,000
Waiver of Subrogation required
Errors&Omissions (E&O)
Limit: $1,000,000
a. Claims-made form is acceptable.
Upon execution of this Agreement, Consultant shall file with the City valid Certificates of
Insurance and endorsements acceptable to the City. Such Certificates shall contain a provision
that coverage afforded under the policies will not be canceled, until at least thirty (30) days'
prior written notice has been given to the City.
The following are general requirements applicable to all policies:
a. AM Best Rating of B+:VII or better for all liability policies.
b.
c. Liability policies will be on occurrence form. E&O can be on claims-made form.
d. The City, its officials and employees are to be added as Additional Insured to the
commercial general liability and business automobile policies.
e. Certificates of insurance showing evidence of insurance coverage shall be provided to
City's representative prior to execution of this Agreement.
3.0 TERM
This Agreement governs all services for an initial three-year period commencing on November 1, 2016
and continuing through October 31, 2019 (the"Initial Term") and can be renewed for up two additional
renewal periods of one-year(1) each at the discretion of the City of Fort Worth. This Agreement has a
three-year rate guarantee and may be terminated at any time with or without cause by either parry with
30 days' advance written notice.
4.0 COMPLIANCE WITH LAWS,ORDINANCES,RULES AND REGULATIONS
Consultant agrees to comply with all applicable federal, state, and local laws, ordinances,rules, and
regulations. If the City notifies Consultant of any violation of such laws, ordinances, rules, or
regulations, Consultant shall immediately desist from and correct the violation.
5.0 NON-DISCREVHNATION COVENANT
Consultant, for itself, its personal representatives, assigns , subcontractors, and successors in
interest, as part of the consideration herein, agrees that in the performance of Consultant's duties
and obligations hereunder, it shall not discriminate in the treatment or employment of any
individual or group of individuals on any basis prohibited by law. If any claim arises from an
Professional Services Agreement—CFW/Holmes Murphy Page 5 of 10
alleged violation of this non-discrimination covenant by Consultant, its personal representatives,
assigns, subcontractors, or successors in interest, Consultant agrees to assume such liability and to
indemnify and defend the City and hold the City harmless from such claim.
6.0 NOTICES
Notices required pursuant to the provisions of this Agreement shall be conclusively determined to
have been delivered when (1) hand-delivered to the other parry, its agent, employee, servant, or
representative, (2) delivered by facsimile with electronic confirmation of the transmission, or (3)
received by the other party by United States Mail registered,return receipt requested as follows:
To City: To Consultant:
City of Fort Worth Holmes,Murphy and Associates,LLC
Attn: City Mgr for Human Resources Attn: Jarrad Willis, Vice President
200 Texas Street 12712 Park Central Dr., Ste: 100
Fort Worth TX 76102-6311 Dallas, TX 75251
Facsimile: (817)392-8654 Facsimile: 214-346-3221
With copy to:
Law Department at same address
7.0 GENERAL CONDITIONS
7.01 The City, besides all other rights or remedies it may have, shall have the right to terminate this
Agreement with or without cause upon ten(10)days' written notice from the City to Consultant
of the City's election to do so. Upon delivery of any notice of termination required herein,
Consultant shall discontinue all services in connection with the performance of the Agreement.
Within ten (10) days after receipt of the notice of termination, Consultant shall submit a final
statement showing in detail the services satisfactorily performed and accepted and all other
appropriate documentation required herein for payment of services through the effective date of
termination. If this Agreement is terminated for cause, Consultant shall be liable for any
damage to the City resulting therefrom. This liability includes any increased costs incurred by
the City in completing Consultant's work. The rights and remedies of the City in this section are
in addition to any other rights and remedies provided by law or under this Agreement. In the
event no funds or insufficient funds are appropriated by the City in any fiscal period for any
payments due hereunder, City will notify Contractor of such occurrence and this Agreement
shall terminate on the last day of the fiscal period for which appropriations were received
without penalty or expense to the City of any kind whatsoever, except as to the portions of the
payments herein agreed upon for which funds have been appropriated. In the event that this
Agreement is terminated prior to the expiration of the Initial Term or of a then-current agreed
renewal term, the City shall pay Contractor for services actually rendered up to the effective
date of termination,and Contractor shall continue to provide the City with services requested by
the City and in accordance with this Agreement up to the effective date of termination. Upon
termination of this Agreement for any reason, Contractor shall provide the City with copies of
all completed or partially completed documents prepared under this Agreement. In the event
Contractor has received access to City information or data as a requirement to perform services
hereunder, Contractor shall return all City provided data to the City in a machine readable
format or other format deemed acceptable to the City.
Professional Services Agreement—CFW/Holmes Murphy Page 6 of 10
7.02 Neither the City nor Consultant shall sell, assign, or transfer any of its rights or obligations
under this Agreement in whole or in part during the term hereof.
7.03 Notwithstanding anything to the contrary contained in this Agreement, the City and Consultant
hereby agree that no claim or dispute between the City and Consultant arising out of or relating
to this Agreement shall be decided by any arbitration proceeding including, without limitation,
any proceeding under the Federal Arbitration Act (9 U.S.C. Sections 1-14), or any applicable
state arbitration statute, including, but not limited to, the Texas General Arbitration Act,
provided that in the event that the City is subjected to an arbitration proceeding notwithstanding
this provision, Consultant consents to be joined in the arbitration proceeding if Consultant's
presence is required or requested by the City of complete relief to be recorded in the arbitration
proceeding.
7.04 Failure of either parry hereto to insist on the strict performance of any of the agreements herein
or to exercise any rights or remedies accruing thereunder upon default or failure of performance
shall not be considered a waiver of the right to insist on and to enforce by an appropriate
remedy, strict compliance with that or any other obligation or the right to exercise any right or
remedy occurring as a result of any future default or failure of performance.
7.05 By this Agreement,the City does not consent to litigation or suit, and the City hereby expressly
revokes any consent to litigation that it may have granted by the terms of this contract or any
other contract or agreement, any charter, or applicable state law. Nothing contained herein shall
be construed in any way so as to waive in whole or part the City's sovereign immunity.
Consultant assumes full responsibility for its work performed hereunder and hereby releases,
relinquishes and discharges the City, its officers, agents, and employees from all claims,
demands, and causes of action of every kind and character, including the cost of defense
thereof, for any injury to or death of any person (whether they be either of the parties hereto,
their employees, or other third parties) and any loss of or damage to property (whether the
property be that of either of the parties hereto, their employees, or other third parties) that is
caused by or alleged to be caused by, arising out of, or in connection with Consultant's work to
be performed hereunder. This release shall apply with respect to Consultant's work regardless
of whether said claims, demands, and causes of action are covered in whole or in part by
insurance.
7.06 This Agreement shall in all respects be interpreted and construed in accordance with and
governed by the laws of the State of Texas, regardless of the place of its execution or
performance. The place of making and the place of performance for all purposes shall be Fort
Worth, Tarrant County, Texas. Should any action, whether real or asserted, at law or in equity,
arise out of the execution, performance, attempted performance of this Agreement, venue for
said action shall lie in Tarrant County,Texas.
7.07 All parties agree that should any provision of this Agreement be determined to be invalid or
unenforceable, such determination shall not affect any other term of this Agreement, which
shall continue in full force and effect.
7.08 This Agreement, including all Exhibits attached hereto and the Consultant's response to the
RFP, contains all the agreements of the parties relating to the subject matter hereof and is the
full and final expression of the agreement between the parties. This Agreement shall not be
amended or modified without the express written consent of both parties hereto. In the event of
any conflict between the documents, the terms and conditions of this Professional Services
Agreement shall control.
Professional Services Agreement—CFW/Holmes Murphy Page 7 of 10
7.09 Contractor agrees that the City shall, until the expiration of three (3) years after final payment
under this contract, or the final conclusion of any audit commenced during the said three years,
have access to and the right to examine at reasonable times any directly pertinent books,
documents, papers and records of the Contractor involving transactions relating to this Contract
at no additional cost to the City. Contractor agrees that the City shall have access during normal
working hours to all necessary Contractor facilities and shall be provided adequate and
appropriate work space in order to conduct audits in compliance with the provisions of this
section.The City shall give Contractor reasonable advance notice of intended audits.
7.10 It is expressly understood and agreed that Contractor shall operate as an independent Contractor
as to all rights and privileges and work performed under this Agreement, and not as agent,
representative or employee of the City. Subject to and in accordance with the conditions and
provisions of this Agreement, Contractor shall have the exclusive right to control the details of
its operations and activities and be solely responsible for the acts and omissions of its officers,
agents, servants, employees, Contractors and subcontractors. Contractor acknowledges that the
doctrine of respondent superior shall not apply as between the City, its officers, agents, servants
and employees, and Contractor, its officers, agents, employees, servants, Contractors and
subcontractors. Contractor further agrees that nothing herein shall be construed as the creation
of a partnership or joint enterprise between City and Contractor. It is further understood that the
City shall in no way be considered a Co-employer or a Joint employer of Contractor or any
officers, agents, servants, employees or subcontractors of Contractor. Neither Contractor, nor
any officers, agents, servants, employees or subcontractors of Contractor shall be entitled to any
employment benefits from the City.
7.11 During the Initial Term or any renewal term of this Agreement and additionally for a period of
one year after the Agreement's final expiration or termination, neither the City nor Consultant
(each a "Hiring Parry") shall, without the prior written consent of the person's employer, solicit
for employment or employ, whether as employee or independent contractor, any person (i)who
is or has been employed by the other party during any term of this Agreement and (ii) with
whom the Hiring Party had contact during any term of this Agreement. However,this provision
shall not prohibit either party from hiring an individual who is employed by the other party and
who responds to a general solicitation or advertisement of employment.
7.12 If any portion or provision of this Agreement is held to be invalid, illegal, or unenforceable,
the validity, legality, and enforceability of the remaining portions and provisions shall not
in any way be affected or impaired.
7.13 The City and Consultant shall exercise their best efforts to meet.their respective duties and
obligations as set forth in this Agreement. If either party is unable, either in whole or part,
to fulfill its obligations under this Agreement due to acts of God ; strikes, lockouts, or other
industrial disturbances; acts of public enemies; wars; blockades; insurrections; riots;
epidemics; public health crises; earthquakes; fires; floods; restraints or prohibitions by any
court, board, department, commission, or agency of the United States or of any state;
declaration of a state of disaster or of emergency by the federal, state, county, or City
government in accordance with applicable law; issuance of a Level Orange or Leyel Red
Alert (or their equivalent) by the United States Department of Homeland Security; any
arrests and restraints; civil disturbances; or explosions; or some other reason beyond the
party's reasonable control (each a "Force Majeure Event"), the obligations so affected by
such Force Majeure Event will be suspended only during the continuance of such event.
Professional Services Agreement—CFW/Holmes Murphy Page 8 of 10
7.14 Headings and titles used in this Agreement are for reference purposes only and shall not
be deemed a part of this Agreement.
7.15 The parties acknowledge that each party and its counsel have had the opportunity to
review and revise this Agreement and that the normal rules of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any exhibit hereto.
7.16 This Agreement may be executed in one or more counterparts, each of which when so
executed and delivered shall be considered an original, but such counterparts shall
together constitute one and the same instrument and agreement. Any signature
delivered by a party by facsimile or other electronic transmission (including email
transmission of a portable document file (pdf) or similar image) shall be deemed to be
an original signature hereto.
7.17 The person signing this Agreement hereby warrants that he/she has the legal authority to
execute this Agreement on behalf of the respective party, and that such binding authority has
been granted by proper order, resolution, ordinance or other authorization of the entity. The
other party is fully entitled to rely on this warranty and representation in entering into this
Agreement.
IN TNESS WHEREOF, the parties hereto have executed this Agreement in multiples thi d y of
2017.
CITY OF FORT WORTH HOLMES MURPHY AND ASSOCIATES, LLC
Susa anis Dennis Bishop
Assistant City Manager President
ATTEST: ®� fop
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City Sec ry
APPROVED AS TO FOR �(AS
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DeniscEVey
Assistant City
Contract Authorization:
M&C C-27980
Professional Services Agreement—CFW/Holmes Murphy Page 9 of 10
CONTRACT MANAGER:
By signing, I acknowledge that I am the
person responsible for the monitoring
and administration of this contract,
including ensuring all performance
and reporting require nts.
c
Maria Gray
Benefits Manager
Professional Services Agreement—CFW/Hohnes Murphy Page 10 of 10
M&C Review Page 1 of 2
Official site of the City of Fort WortP�,Texas
CITY COUNCIL AGENDAORTII
COUNCIL ACTION: Approved on 11/1/2016
REFERENCE ** 14BENEFITS
DATE: 111/11/2016 NO.: C-27980 LOG NAME: CONSULTANTS 2016
CODE: C TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: Authorize Execution of Three-Year Contracts with Holmes, Murphy and Associates, LLC,
and Trion Group, a Marsh & McLennan Agency LLC Company for Group Benefits
Consulting Services in a Combined Annual Amount Up to $231,863.00 (ALL COUNCIL
DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council authorize three-year contracts with Holmes, Murphy and
Associates, LLC, and Trion Group, a Marsh & McLennan Agency LLC, for group benefits consulting
services for the City in a combined annual amount up to $231,863.00. The initial term of three-years
shall not exceed $695,589.00. The City will have two one-year renewal options available.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C) is to approve contracts with Holmes,
Murphy and Associates, LLC (Holmes Murphy) and Trion Group, a Marsh & McLennan Agency LLC
(Trion) for group benefits consulting services for the City in a combined annual amount up to
$231,863.00. The proposed contracts are for a three-year term with two one-year renewal options at
a combined amount of$231,863.00 per year. The initial term of three-years shall not exceed
$695,589.00.
Since January 1, 2014, Gallagher Benefits Services, Inc., has served as the City's consultant for
issues related to its benefit plans. The current Agreement, City Secretary Contract No. C-45199
ended on October 31, 2016.
On June 8, 2016, a Request for Proposals (RFP) was issued and responses were required by July 7,
2016. The RFP was designed to solicit comprehensive consulting services regarding the City's health
and welfare benefit plans for an effective date of November 1, 2016. Proposers could bid on one or
both services for Medical and Pharmacy Consulting.
Staff received 10 proposals in response to the RFP. An evaluation team with representatives from the
Human Resources Department, the Purchasing Division, Health Benefits Advisory Committee, and
the Minority &Women Business Enterprise Office evaluated proposals based on five factors:
1. Firm's qualifications and experience;
2. Value Proposition/Proposed Fees;
3. Quality of proposal/acceptability of proposal;
4. Compliance with City's MBE requirement; and
5. Price - demonstrated experience with plan sponsors who have
lowered costs while maintaining quality of benefits.
The committee agreed that the Holmes Murphy proposal offers the best overall quality of service and
pricing of the submissions for the medical benefit consulting services portion and Trion offers the best
quality of service and pricing of submissions for the pharmacy benefit consulting services portion.
Both provide expanded services and saving opportunities to lower health plan costs compared to
other proposers.
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=22957&councildate=11/1/2016 6/6/2017
M&C Review Page 2 of 2
Holmes Murphy will provide medical consulting services, actuarial services, budget forecasting, plan
communication materials development, and market renewals for dental, life and disability insurances
as required year after year at no additional cost. Trion will provide pharmacy consulting services and
a prescription drug benefit management buying coalition with estimated savings of$4.3 million per
year if the City uses Trion's Rx Coalition or estimated savings of$1.0 million per year if the City
continues with its current PBM, Envision Rx. Both have placed 100 percent of their fees at risk based
on reaching targeted saving thresholds.
AGREEMENT TERMS - Upon City Council's approval, the contracts will be effective on November 1,
2016 and will expire on October 31, 2019.
RENEWAL OPTIONS -The contracts are for an initial term of three years and may be renewed for up
to two consecutive one-year periods at the City's option. This action does not require specific City
Council approval provided that the City Council has appropriated sufficient funds to satisfy the City's
obligations during the renewal term.
M/WBE OFFICE - Holmes Murphy is in compliance with the City's BDE Ordinance by committing to a
goal of 10 percent MBE participation. At the request of the Purchasing Division and as approved by
the M/WBE Office, Trion Group was granted a waiver of the goal for MBE/SBE subcontracting
requirements, in accordance with the BDE Ordinance, because the purchase of goods or services is
from a source where subcontracting or supplier opportunities are negligible.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that funds are available in the current operating budget, as
appropriated, of the Group Health and Life Insurance and Retiree Healthcare Trust Funds. Funding
for the balance of terms of these contracts will be requested as part of the Fiscal Year 2018 budget
process.
TO
Fund Department Account Project Program Activity Budget Reference# Amount
IDID Year (Chartfield 2)
FROM
Fund Department Account Project Program Activity Budget Reference# Amount
ID I I ID Year (Chartfield 2)
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Brian Dickerson (7783)
Additional Information Contact: Margaret Wise (8058)
ATTACHMENTS
1295 -Certificate of Interested Parties Holmes Murphy 10 5 16.pdf
Form 1295-Trion.pdf
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=22957&councildate=11/1/2016 6/6/2017