Subject:
Title
Agreement with UMR, Inc., a UnitedHealthcare company, for requirements of group medical, employee assistance, and managed behavioral and mental health benefits. Termination for convenience of current contract with Cigna Health and Life Insurance and Evernorth Behavioral Health, Inc., effective December 31, 2024.
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Recommended Action:
Recommended Action
Approval of the agreement with UMR, Inc. for requirements of group medical, employee assistance, and managed behavioral and mental health benefits; termination for convenience of current contract with Cigna Health and Life Insurance and Evernorth Behavioral Health, Inc. (Cigna), effective December 31, 2024.
• The agreement provides third-party administrator services for the County’s employee medical benefits plan.
• The agreement has a term of sixty-months, with a service start date of January 1, 2025, and a total expenditure of $15,000,000.00 with an annual expected expenditure amount of $3,000,000.00 per year. The agreement may be extended for one additional twenty-four-month term.
• The Cigna Health and Life Insurance Contract will be terminated for convenience, effective December 31, 2024, with provisions of run-out for twelve months at no cost to the County.
• Gallagher conducted a market study and concluded along with Human Resources staff that the fees in the new contract with UMR are competitive in the marketplace.
• Funds for this contract are included in the Fiscal Year 2025 Proposed Budget in the Health Benefits Fund. The contract has a fiscal non-funding clause if this portion of the budget is not adopted.
Contract No. 21-0162-P for a sixty-month contract value of $15,000,000.00; Authorize the Chairman to sign and the Clerk of the Circuit Court to attest.
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Strategic Plan:
Create a Quality Workforce in a Positive, Supportive Organization
1.1 Recruit, select, and retain the most diverse and talented workforce
1.3 Make workforce safety and wellness a priority
1.4 Maintain a fair and competitive compensation package
Summary:
Summary
This contract provides third-party administration services for the County’s sponsored and self-insured employee health plan, a comprehensive and consolidated Employee Assistance Program (EAP), and Managed Behavioral Health Benefits for employees and their covered dependents. To estimate the sixty (60) month expenditure, a 6% annual renewal increase range was used; this percentage may vary year to year for this policy.
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Background Information:
A request for proposal (RFP) was released on January 22, 2021, for requirements of group medical, employee assistance, and managed behavioral and mental health benefits. Three (3) submittals were received, with Cigna selected as the highest-ranked firm and UMR, Inc. as the second ranked firm. Cigna was awarded the contract as the top-ranked firm, effective January 1, 2022.
Since the inception of the contract, the County has experienced service-related issues. As a result, it was determined by the County to move to the second-ranked firm, UMR and terminate the agreement with Cigna for convenience.
Gallagher recently conducted a market study (attached) and concluded, along with the HR staff, that the fees in the new contract with UMR are very competitive in the marketplace. The proposed program under UMR provides employees with the same choice of plans, both point-of-service (POS) and a high deductible plan (HDHP) with a health savings account (HSA). Enhancements include four onsite representatives, including a claims administration representative, with a health savings account (HSA). Enhancements include four onsite representatives, including a claims administration representative.
Fiscal Impact:
Sixty (60) month Administrative fees not to exceed $15,000,000.00
Estimated sixty (60) month claims liability not to exceed $366,411,000.00*
*Note that the liability claims are not part of this agreement and are paid by the County as a self-insured plan using the premiums paid by both the County and employees.
The contract is not included in the FY24 Adopted Budget as it is not in effect until FY25. It is included in the FY25 Proposed Budget. The contract has a fiscal non-funding clause if this portion of the budget is not adopted. The annual amount expected to be spent on the contract is approximately the same as has been spent in recent years.
Staff Member Responsible:
Wade Childress, Director, Human Resources Department
Merry Celeste, Purchasing Director, Administrative Services
Joe Lauro, Director, Administrative Services
Partners:
N/A
Attachments:
Agreement