~ .'1 COMMISSIONERS' COURT AGENDA REQUEST PLEASE FURNISH ONE ORIGINAL AND TEN (101 COPIES OF THIS REQUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT r MADE BY: Judge Tinley OFFICE: County Judge Gary Looney MEETING DATE: October 22, 2007 TIME PREFERRED: 9:30 AM SUBJECT: Consider, discuss and take appropriate action to adopt Kerr County Employees Health Benefits Plan for 2008. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON) NAME OF PERSON ADDRESSING THE COURT: Gary Looney/Judge Tinley ESTIMATED LENGTH OF PRESENTATION: IF PERSONNEL MATTER -NAME OF EMPLOYEE: Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter SS l and 552, Government Code, is as follows: Meeting scheduled for Mondays: THIS REQUEST RECEIVED BY: THIS RQUEST RECEIVED ON: 5:00 PM previous Tuesday @ .M. All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards your request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court. Gary R. Looney, REBC 3201 Cherry Ridge Drive Suite D 405 San Antonio, Texas 78230 Phone: (210) 930-6665 Fax: (210) 930-1838 Memorandum Date :10/20/2007 TO Kerr County Commissioner's Court From :Gary Looney REBC RE :Medical Plan Claims Administrator and Group Term Life Recommendations Monday October 22, 2007 9:30 A M Review of RFP responses for a Third Party Administrator for group medical and associated services Recommendation based on following i. Fixed Cost 1. Specific and Aggregate Stop Loss Premiums 2. Administrative Charges 3. HRA administration 4. FSA administration 5. Wellness incentives 6. Prescription Benefit Management initiative 7. Run off expenses 8. PPO Network 9. Internet Initiative 10. Web Based enrollment 11. Set up/Renewal Fees ii. Variable Cost 1. Maximum Aggregate Attachment Points 2. PPO Network Savings 3. Communications Materials 4. Enrollment Materials 5. Added Value Kerr County received seven total complete bids; the most received by the County in the last few years. While the number of bids indicates that the County has access to a number of quality providers, it also makes the decision process much more difficult. None of the bidders would have offered their services if they did not feel that they were the best vendor selection for the County. The cost analysis shown on the spreadsheet has been reviewed by each vendor and adjusted for best and final offers and accuracy. The most difficult analysis is not identifying the hard dollar costs as stated on the spreadsheet, but in analyzing the subtle nuances in the services offered by the vendor. 201 Cherry Ridge Drive In speaking with the vendors, each proposal has underlying vendor services that are supposed to separate them from each other. As stated each vendor feels their product SuiteD405 is superior to all others. As a result six (6) vendors will be unhappy with my Son Antonio,Tezas18230 recommendation and will most certainly disagree with me. However, one must be V210.930.6665 selected to provide the ongoing services to Kerr County. As a result of my evaluation F210.930.1838 and discussions with various vendor representatives (recommend that Kerr County contract with Group and Pension Administrators for the 2008 calendar year with two oimm~grpcaiamoinsgrP_rnm one year renewals pending the proper performance of their duties as third party administrator of the medical plan. October 20, 2007 Memo to Kerr County Commissioner's Court Page 2 of 2 It is not necessary to change the active employee contribution levels for dependent charges that are currently being deducted ftom their pay. I do however feel that it is necessary to increase the premium allocations paid by retired County employees. I will return to the Court with my recommendations for future retiree funding. I will also bring to the Court my recommendations for medical plan design changes after conferring with Group and Pension Administrators and reviewing their master plan document to determine if they have any specific change suggestions. There is no intention of significantly changing the current benefit design. However, as we discussed in the previous workshop, recommendations may include: 1. Change the waiting period for new employees 2. Remove dependent pregnancies from coverage 3. Change the definition of dependent to require attendance at a college, trade school or other qualified educational institution from attained age of 19 to age 23. The Mutual of Omaha group term life insurance and accidental death and dismemberment plan which provides $20,000 of coverage for each active employee under the age of 65 may be renewed at the current rate of $.20 base $.02 AD&D for 2008. The plan does not cover retired employees on the medical plan. appreciate your confidence in my efforts to provide the very best vendors and medical plan for Kerr County and its employees. Sincerely, ~~ Gary R. Looney Risk Management Consultant, REBC glooney@alamoinsgrp.com 1~t701 St. tvlary's lane.. Suite 1.50 Houston. TX 77079 Octobee I ~, 2007 "I'he I-Ic~noratile Pat'1"inlet' Kerr County :lodge 700 Main Kerrville, Teas 7028 via facsimile ant a-mail KT: ~r~trr~st eoncerrls regrrrrtiirg the f~tir~aess ~ritrl hossfGle violrrliorts o/' t/te 1 octrl Gaver~trnc~irt Coyle relative fo rlre co~lsult~ruts evrrluaiioir of the Rer~ucst .for S'c>~iler/ Proposals for ;1ledical Sto~~-Loss, TPt4 Services, T.ife Iirsru•rurce R_ .~1Dc4c.r~ ott Geiurlf a,F licrr Corurtp, Teas _ , Dear Judge Tinley: ~1s you are aware, Entrust has expressed concerns about the fairness t>f~ the proposal evaluation perfort~led by your health plan ce~nsultant on behalf of Kerr County. tlside from frequent mistakes in the. calcrtlation of the mtmbers on the spreadsheet presented to the Commissioner's Cotu't on Monday f~etober g, 200? during a health plan workshop open to Che public, the: consultant demonstrated unfairness to liatrust by indicating that [:ntt°ust dill not follow the R[=P guidelines as it relates to ber7etits ~ti~hen, in fact, the Entrust proposal submission cleGn•ly illustrated the numbers being presented to the Conuuissiot~er's Court were a dup(icatie>n of the current laet~e~fit schedule provided by tl~tc County. Furthermore, the consultant cites[ in the issucci Request fior Pt'opasal tl7at Kerr County we>uld bc. following Iexas laacal Govet~nmcnt Code Chapter 252, Subchapter E3 guidelines as it relates to the procurement process of insarance~ plans through the competitive sailed Biel proposal pre>ccss. As an attorney and county official, you are aware that the statute cited by the consultant in the Kere County Rhl' relates to the Purchasing and Contracting Autharit_y of Municipalities. In reviewin~~ the; "Cexas Local Government Cede, Kcrr County would fall under Texas Local Government Code Chapter 2fi2 which relates to the. Purchasing and Contracting tluthority of~Countics. "hhereforc, the consultant would be required to foll~aw the Local Government Code. for counties as Kerr County is not considered a ~Cexas municipality as it relates to the Local tovernment Code regarding the procurernet~t of sealed bids. Setting aside the issue that Kerr County is, in tact, a county and not a nnuiieipality in regard to fhe Lvca( Govcrt~ment Code, the. consultant stated in a meeting with Entrust on Friday, Octabcr 19, 2007 that he was entitled to negotiate bids at any time prior to the award of the contract per the "l~cxas Local Government Code; as cited in the R[~P. "Phis meeting was facilitated for [Intrust at the request of you, Jndgl; f1171ey, Hnd the CUI'rllll II1S[1J'anGe agent 1"C'.gUeSting the COnSUltallt gt'at~t lattl'U5t a nleettngT lCk rCl'1('-44' previously stated concerns. l~.acal Govermnent Code Chapter 252, Subchapter f3, Section 252.042 (a) and (b) would allotiv the consultant to request befit and final offers from all biddet~s that were deemed to be reasonably qualified to submit revisions to their initial bids as long as all bidc[ers reasonably qualiCed were treated fairly ~md equally, flside; Pram the fact Entrust eras not treated, fairly and ec~Iually, the consultant failed to lotto«~ bid protocols that were cited in the Itl-'P as indicated uttdcr 'l~exas Le~eal Government Cvde Chapter 252, Subchapter I3. Se:ction 252.(}tk9 (b} that in summary indicates that all bids Corporate Office P. C3. Sox 4x0309 tionutan, TX 772A4-0349 Cd81~ 3E8-7878 f=ax f,281j 3o8-7fs28 must. rc-nai^ undisclDSed t~-ud not be published tD the public until all negoiiatia7s have been -r-ade final to avoid ~iisclos~u•e ~f the ec~nt~nts ~f heopriet~i-y bids t<~ cc~mpet~in~ ~~1~ferors so ~~s to keep pet~p©s~~ls secret and contidentia( to ~-void unfair disclosure rh-ring negotiatiails. Once again, Kl'rr County would mall under Local Government Code Chapter 262 tivhich provides for similar provisions as those cited in the RFP; ha~~~ever, Chapter 252 wooed not be the appropriate code. Since alt bids were disclosed to the public fo-• open record on Nionda}~, October 8, 2047 curing the ~~-orkshap that began at 1:34 p-t~, the consultant should not have co-uiucted negotiations after this date. furthermore, the consultant i--dicated in our -7ieeti-1g on Friday, t7ctabea~ l~; 2007 that he was aware Entrust based the u• quote, an tl3e eurreni pion of benefits and expressed that his concerns rei;ardi-rg "serious plan design issues" with E--trust were a reficction of his own personal feelings to the Commissioner's (:;Dort and not an accurate statement as to the validity of our actual submitted bid. ,fit this time, Entrust (-opes that Kerr County, in spite of the frequent mis-•epresentations by the c:r,nsultant regarding the competitiveness of the Entrust bid, will, in fact, realize that the initial Entrust laid represents the best overt~tl) value to Kerr County and will rnovc 1c»-ward with awarding the. contract to fa~trust for a term of three consecutive one year terms due to our proposal subn~rissian guaranteeing no increase in Entrust administrative costs for tl-rcc consecutive years. lf, ul fact, the Commissioner's Court of Kerr County does nr~>t decide to b~-sc, their decision an financial facts presented and subsequently correcte~~3 from the public meeting ou it~londay, October 8, 2047; then, Entrust hopes that Kerr Count~~ will disqualify all bidders wl-o entered into negotiations with the consultant after the sealed bids were made public eo---promising the confidentiality and fairness of the sealed bid process. 'the end result will either result in a contract award to the best overall bidder that did nDt adjust numbers once the bid process was violated, Entrust, ar a disqualiticatiDn of all bids requiring an entirely new bid process. The initial bid provided by Entrust offered #tred annual casts of X368,420.44 based on the stated enrollment count provided iu the initial spreadsheet comparison which represents a savings of k34,173.92 over the Wert most campe-titive tixed cost proposal subu~itted by competitive vendors affc:ring similar contract, network, ~uu1 plan provisions. Regarding claims exposure to the county, the ---aximum exposure based on the quoted census count totaled $2,15{), (>87.~2 tivhieh meets the County Budget. Eurthennore, there were a-Ih- two bids that offered a lower marimutn exposure then Entrust; however, the fixed costs submittc d by tl-ese bidders were at a mininnnn X86,418.20 higher than the Entrust submission. "1`hcrefore, F,ntrust offe-°ed Kerr County the lowest fixed crests 4mc best overall value in the initial hid submission. tldrlitionally, Entrust provided the highest level <<~i~ service. capabilities and access to the same provider network currently being used by the cmpioyees of Kerr County. "fo summarize, Entrust was not treated fairly ley the consult~u-t representing Kerr County. In otu• opinion, the consultant violated bid protocols by negotiating final nrunt~crs after making all of the initial birds l~~ublic -~ecard in the heatth plan workshop ou October 8, 2407. f1,mo-lg other i--accurate statements, Che consultant misrepresented t17at Ilntrust had "serious plan design issues" when, in fact, Entrust quoted a clul.~licatian of tf-e current schedule of benefits. In reviewing tl7e initial spreadsheet, the cons--]tant made frcque-lt mistakes when calculating the submitted bids as best illustrated in Option 3 where the actual calculatirn~ Df tl-e numbers submitted was misrepresented by 9;276,135 too low. finally, E-ltr--st never received any communications fi~o-1- the consultant requcstu~g clarification of o-~u- bid submission despite the fact that we Dffc.red the best fixed cost proposal and overall value to Kcrr Cout7ty. Please feet free to contact me directly regarding any of these stated concerns at your earliest cvnvenicnce. Entrust has faith in the C'ommissioner's C"ou~-t of Kerr County fo make ~~ f