ACTION REQUESTED:
Title
Communication from the City Manager and the Director of Human Resources Director with a Request to Authorize the City Manager to Enter into a 1-Year CONTRACT Renewal with HUMANA, INC and a 1-Year CONTRACT Renewal with AETNA/COVENTRY to be Effective 1/1/16 Through 12/31/16 to Serve as Third Party Administrators to Administer the City’s Medical/Dental Benefits and Administer Hospital/Physician Networks.
Body
BACKGROUND: In 2013, the City Council approved the dual option for the City of Peoria’s Health Care Plan as recommended by the City’s Joint Labor/Management Health Care Committee (LMHCC) and its health care consultant, Holmes Murphy & Associates, after conducting an extensive Request for Proposal process for the medical/dental plan and associated networks in 2013.
The Labor Management Health Care Committee conducted an RFP process in 2015 to review the possibility of changing vendors to administer the City’s medical/dental and network benefits and network benefits that could deliver the highest level of service with an integrated approach for the best price for the City. A key expectation of the Committee continues to be that the selected vendors proactively serve as a resource for plan participants, especially those at a high risk of experiencing critical health issues by helping them to effectively focus on managing their health, avoiding the escalation of their disease state, encouraging behavior change and working toward wellness.
After review of the RFP proposals received, the LMHCC unanimously voted to recommend to continue a Dual Option with Humana, Inc. as the City’s administrator with an OSF network and Aetna/Coventry as the City’s administrator with a Unity Point network. By continuing to offer a dual option for networks, the City will continue to realize additional savings to the health care plan with the deep discounts offered by both Humana and Aetna/Coventry. The Committee also feels that continuing to partner with both local hospitals will give more choice to its members.
FINANCIAL IMPACT: The City’s Health Care Plan will continue to receive a 57% discount on all OSF claims and an additional savings with the Unity Point claims for the 2016 Health Care budget. Funds for the administration fees and impact of the network savings will be reflected in the 2016 Health Care budget.
NEIGHBORHOOD CONCERNS: N/A
IMPACT IF APPROVED: The City will continue to receive deep discounts on network medical claims and an integrated approach to administer claims and manage the health of plan members. It is anticipated that overall medical costs to the Plan will not increase as fast with the aggressive network discounts offered by Humana, Inc. through OSF and by Aetna/Coventry through Unity Point, which will result in substantial savings to the City’s Health Care Plan.
IMPACT IF DENIED: The City of Peoria’s Health Care Plan could incur substantially more health care plan expenses if the deep network discounts cannot be utilized and the City will not be able to effectively address spiraling health care costs.
ALTERNATIVES: None
EEO CERTIFICATION NUMBER: #02947-131231 for Humana, Inc.
#03224-151231 for Aetna/Coventry
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Financially Sound City Government, Effective City Organization
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Have an efficient government.
DEPARTMENT: Human Resources