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SR-09-29-2015-3H City Council Report City Council Special Meeting: September 29, 2015 Agenda Item: 3.H 1 of 3 To: Mayor and City Council From: Donna Peter, Director, Human Resources Department Subject: Authorization to execute an agreement with Plan Source Benefits Administration, Inc. Recommended Action Staff recommends that City Council authorize the City Manager to execute a two year professional services agreement with PlanSource Benefits Administration, Inc., a Florida-based company, to provide a benefits administration program, in an amount not to exceed $150,000, with future year funding contingent on Council budget approval. Executive Summary In an effort to streamline and automate employee benefit related transactions and ensure the City is compliant with the reporting regulations of the Affordable Care Act (ACA), staff recommends implementing a benefits administration system. Staff recommends that these services be provided by PlanSource Benefits Administration, Inc. at a cost not to exceed $150,000 over a two-year period. Background The City offers a comprehensive benefits program to staff which inc ludes a variety of types of insurance coverages for eligible employees and their dependents. The City contracts with over ten different vendors to provide these benefits. Currently, the City does not have any benefits administration software to manage be nefit related transactions. Most benefit related transactions are performed manually and entered into multiple systems in a variety of ways. Recently, Federal law has imposed significant reporting requirements for employee benefits on large employers. Beginning in 2015, the ACA requires employers to report the following information for each month of the calendar year to the IRS: identify all full time employees (as -needed or permanent) working 30 hours or more, whether minimum essential health coverage providing minimum value was offered, whether the offer was made to dependent children and spouses, whether the offer was affordable, and the employee’s premium contribution to 2 of 3 the lowest cost employee-only plan. A benefits administration program would allow the City the ability to manage enrollment, billing, compliance and ongoing administration of employee benefits in one system, thus saving time, decreasing the margin for errors and increasing productivity. Discussion After an evaluation of current processes in the Human Resources Benefits Division, it was determined that a benefits administration program would better assist in managing the high volume of employee benefit related transactions and provide a mechanism to ensure accurate reporting compliant with the ACA. After interviewing and viewing two demonstrations by companies recommended by the City’s third party insurance broker, Arthur J. Gallagher & Co., PlanSource was selected. BenefitsOne, the technology platform offered through PlanSource, would provide the following services to the City: the ability to manage benefits and eligibility on-line with intuitive cloud-based technology, automate the creation and distribution of Forms 1094 -C and 1095-C as required by the ACA, generate, adjust and reconcile carrier bills, ability to customize reports and workflows, provide a portal for employees to enroll in and access their benefits from any computer or mobile device any time of day or night, and connect with 3rd party systems to exchange and update employee benefits information with insurance carriers and the City’s payroll system. The implementation of BenefitsOne would provide staff with a secure cloud based environment to process and manage daily benefit related transactions with more efficiency and accuracy and the ability to cure long standing inefficiencies derived from manual and antiquated processes. The PlanSource/BenefitsOne system will integrate with the HR/Payroll modules of the City’s new Enterprise Resource Planning (ERP) system, once that system is fully implemented, should there remain a need for a separate benefits administration system. Staff is requesting authorization for the City Manager to execute a two year agreement through September 30, 2017. Vendor Selection The City’s third party fee-based insurance broker, Arthur J. Gallagher & Co. solicited proposals from vendors to provide a benefits administration program. The proposals 3 of 3 were analyzed by Gallagher. Based on the recommendation by Gallagher, Human Resources staff viewed two demonstrations and selected PlanSource Benefits Administration Inc. PlanSource was recommended based on their experience providing benefits administration services, their established relationships with benefit vendors with whom the City currently contracts with, and their competitive pricing. Financial Impacts and Budget Actions The agreement to be awarded to PlanSource Benefit administration, Inc. is for an amount not to exceed $150,000. Funds are available in the FY 2015 -16 budget in the Human Resources Department. The agreement will be charged to account 01252.533580. Future year funding is contingent on Council budget approval. Prepared By: Tatiana Morrison, Executive Administrative Assistant Approved Forwarded to Council Attachments: Reference: Agreement No. 10191 (CCS)