SR 01-14-2020 3B
City Council
Report
City Council Meeting: January 14, 2020
Agenda Item: 3.B
1 of 3
To: Mayor and City Council
From: Lori Gentles, Chief People Officer, Human Resources Department
Subject: Approval of Agreement with Magellan Health Services for Administration of
Employee Assistance Program
Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to negotiate and execute a professional services
agreement, for the administration of an Employee Assistance Program (“EAP”),
with Magellan Health Services of California, Inc. – Employer Services, a
California corporation, in an amount not to exceed $169,000.00 (includ ing a 10%
contingency) over a three-year period, with two one-year renewal options for
$56,000 (including a 10% contingency), with future year funding contingent on
Council budget approval.
Executive Summary
The City of Santa Monica has a full-time workforce of over 2200 City staff. As part of
the City’s employee benefits program, the City provides an Employee Assistance
Program (“EAP”) for staff members. The focus of the service is to give staff who may be
experiencing work or home life stresses the opportunity for rapid access to help with
counseling, family and legal assistance and other tools to ensure their ability to perform
their public service duties. The current provider of this benefit, Holman Professional
Counseling Center (“Holman”), has been unable to provide these services at a
satisfactory level, and cost. As a result, staff requested that the City’s insurance broker,
Alliant Insurance Services, Inc. (“Alliant”), solicit proposals for a new vendor to provide
these services. A Request for Proposals (“RFP”) was conducted and based on their
ability to provide the scope of services and a three -year rate guarantee, Magellan
Health Services of California, Inc. – Employer Services was selected(“Magellan”).
Magellan offers more robust EAP services at a cost that enables the City to provide
these benefits to both permanent and as-needed employees.
2 of 3
Background
The City makes available an EAP to all permanent employees as part of their benefit
package, and as a best practice, will now offer this service to our as-needed employees
as well. Through the EAP, permanent and as-needed employees and eligible
dependents can access services such as five free face-to-face outpatient counseling
sessions per year, computerized cognitive behavioral therapy, a 24-hour hotline staffed
by licensed counselors for crisis intervention, critical incident response services, access
to on-line webinars and articles on wellness topics, a 25% discount on legal services,
financial planning consultation, work/life services including access to an on -line library
of information and tools, and referrals to services in connection with child care, elder
care, parenting issues, children with special needs, schooling and education, teen and
young adult issues, relocation aid and adoption assistance.
Discussion
Holman has been contracted with the City since August 2015 to provide EAP services.
Annual service renewal agreements were facilitated through the City’s third -party fee-
based insurance broker, Alliant. The services provided by Holman have received
negative reviews by City employees who encountered challenges in accessing and
obtaining services, and staff experienced challenges scheduling critical incident
response services. Additionally, the Holman per employee per month cost was high
based on the level of services provided. Based on these factors, staff requested that
Alliant solicit proposals for the City’s Employee Assistance Program. A Request for
Proposals was conducted by Alliant in June 2019.
Vendor/Consultant Selection
As our broker, Alliant prepared the bid specifications and conducted the procurement on
the City’s behalf. The following companies responded to the RFP:
1. Empathia
2. Magellan Health Services of California, Inc. – Employer Services
3. MHN CSA EIA
3 of 3
Based on Alliant’s analysis of plan costs and evaluation of services available to
employees, Magellan emerged as the preferred vendor based on cost and ability to
provide the full scope of requested services. Magellan’s overall rate structure for the first
year (FY 2020-21) is projected to result in an overall savings to the City of 46% or
approximately $44,031 in EAP costs which will enable the City to provide EAP services
to as-needed employees in addition to permanent employees.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund to award a contract with
Magellan Health Services of California, Inc. – Employer Services to provide an
Employee Assistance Program.
Contract
Request Amount
FY 2020-21 Budget
Account #
Total Contract
Amount
01800004.515005 $169,000
The agreement will be charged to account listed above and expenditures will be
transferred to the departments incurring EAP services. Future year funding is contingent
on Council budget approval.
Prepared By: Amanda Elek-Truman, Senior Human Resources Analyst
Approved
Forwarded to Council
Attachments:
A. 2017 Oaks Initiative Form signed by R Clarke 20200108
REFERENCE:
Agreement No. 10984 (CCS)