HomeMy WebLinkAbout5.E.1. 2011 Service Agreement with Financial Concepts for City BenefitsCity of Shakopee
MEMORANDUM
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: Kris Wilson, Assistant City Administrator
SUBJECT: 2011 Service Agreement with Financial Concepts
DATE: January 28, 2011
Introduction
The City Council is asked to authorize the appropriate officials to enter into a 2011 service agreement
with Finance Concepts Inc., the City's broker for employee insurance benefits.
CONSET
Background
The attached document is an updated service agreement with Financial Concepts Inc. (FCI) for calendar
year 2011. FCI was hired by the City in September 2009 to serve as our broker or agent of record for
employee insurance benefits (medical, dental, life and long -term disability). Each year FCI sends us an
updated document that reflects the negotiated premiums with our various insurance carriers (Medica,
Delta Dental, etc.) and the annual fee to be paid to FCI for their services. A majority of the FCI fee is paid
directly to them by the insurance carriers as a commission. At the end of the year the City makes up any
difference between the commissions they've collected and the total agreed upon fee. We just recently
settled up with them for 2010 and ended up paying them just $911.40 directly.
The negotiated insurance premiums on the attached document are the same as those brought before
the City Council at its October 19, 2010 meeting and the proposed annual payment to FCI is identical to
the 2010 amount, which was $21,000.
Relationship to Vision
This is a housekeeping item. (F)
Budget Impact
The City's share of the 2011 employee insurance premiums have already been accounted for within the
adopted 2011 operating budget, and any year -end amount due to FCI to bring their compensation to the
agreed upon $21,000 can be accommodated within the professional services line item of the Personnel
Division's budget.
Requested Action
The Council is asked to offer a motion authorizing the appropriate officials to enter into the attached
agreement with Finance Concepts Inc.
FINANCIAL
c o n c e p t s
AN 4a COMPANY
Planning Beyond Tomorrows""
December 22, 2010
Ms. Kris Wilson
Assistant City Administrator
City of Shakopee
129 Holmes Street S.
Shakopee, MN 55379
Dear Ms. Wilson:
Benefits
Retirement
Investments
Main 763.450.1800
Toll Free 800.693.1175
Fax 763.450.1801
Strategic Plan
9655 Schmidt Lake Road
Plymouth, Minnesota 55442
www.fci - benefits.com
The following outlines the services Financial Concepts, Inc. (FCI) will provide to the City of
Shakopee relative to your health and welfare plans for the period of September 1, 2009 through
December 31, 2012.
Financial Concepts, Inc. provides financial consulting and support to assist the City of Shakopee
with development of a strategic benefits plan, including:
• Perform separate analysis of each employee benefit plan to determine efficiency and
integration.
• Review insurance plan designs and claims experience, as needed, for each benefit.
• Analyze competitiveness of plan positioning, taking into account plan design, employee
choice, and both employer and employee costs.
• Recommend plan design and financial funding alternatives based on analysis and strategic
objectives.
• Assist in preparation of budget projections.
• Work with the City of Shakopee to establish a renewal strategy encompassing all the
components of a cost effective, high quality benefit plan for the upcoming, and future, benefit
renewals.
Compliance
Financial Concepts, Inc. provides compliance services that are critical to managing your benefit
plans, including:
• Assist Human Resources staff with compliance related issues through training seminars,
newsletters and correspondence.
FINANCIAL
c o n c e p t s
• Review industry, legislative and regulatory developments and consultative recommendations
relating to employee benefits.
• Provide consultation on employee relations issues, as needed.
• Grant access to FCI's online human resources library of explanations and analysis of laws,
trends and developments in benefits and related areas.
• Offer ten hours of legal services annually with an attorney named by FCI.
Renewal and Plan Service
Financial Concepts, Inc. provides full carrier management services critical to the renewal
process and maintenance of your benefit plans. It is our understanding that the objective is to
provide a high level of benefits to the City of Shakopee and to keep these benefits within current
and future budgets. FCI employs our proprietary benefits management process to help the City
of Shakopee anticipate cost increases and proactively implement cost containment measures,
including:
• Negotiate with each carrier on renewals.
• Manage the proposal process to ensure competitive programs and pricing.
• Recommend plan design alternatives to best manage costs and offer a competitive benefits
package for employees.
• Secure attractive financial alternatives.
• Negotiate rate guarantees and caps with the carriers, if available.
• Resolve escalated and non - standard carrier issues, including assistance with irreconcilable
claims, enrollment and billing concerns.
• Improve access to claims reporting through our Decision Master Report powered by Zywave
once a year, as needed.
Employee Communication
Benefits
Retirement
Investments
Financial Concepts, Inc. provides assistance to the City of Shakopee in designing and delivering
an employee communications strategy that aligns with your strategic benefit initiatives.
Deliverables may include:
• Conduct/review employee surveys to provide objective and subjective feedback to
management, if applicable.
• Develop and continuously review effective communication methods to educate the City of
Shakopee's employees on their benefits package and the strategic benefit objectives.
• Conduct employee education meetings related to the City of Shakopee's health & welfare
benefits.
2
FINANCIAL
c o n c e p t s
Benefits
Retirement
Investments
The City of Shakopee Support
Financial Concepts, Inc. may require the assistance of the City of Shakopee personnel,
including:
• Management's input on the City of Shakopee's strategic benefit objectives — short -, mid- and
long -term.
• Direction on management objectives related to the adoption of the various plans.
• Communications strategy input and support.
• Support in obtaining benefit plan claims data.
• Confidential census information for renewal purposes.
Service Agreement
Financial Concepts Inc. will receive the current commission level on the health and welfare plans
starting September 1, 2009 through December 31, 2009. On January 1, 2010, Financial
Concepts' compensation for all of these services will be $21,000 annually. This amount is paid
in part by the product vendors on a monthly basis. Any shortage will be billed to the City
quarterly by Financial Concepts. The City of Shakopee and Financial Concepts will review the
fee annually to determine if any adjustments need to be made for the upcoming benefits plan
year.
Either party may terminate this agreement at anytime and for any reason by providing the other
party with 60 days advance written notice.
The parties hereby acknowledge that the services described above, which are provided by
Financial Concepts, Inc. under the letter agreement, "do not relate to an employee benefit plan"
in the context of Section 514 of ERISA.
As a subsidiary of National Financial Partners Corp. ( "NFP "), we are a member of a financial
services network containing approximately 200 owned firms and approximately 300 affiliated
firms. Firms within the NFP. network engage in one or more of its primary lines of business,
which include corporate and executive benefits and property and casualty insurance brokerage.
Firms are compensated through fee and commissions for services provided to clients in each of
these lines of business. In addition to the standard commissions received for the services
provided to you, we or our affiliates may earn additional compensation for our role in providing
certain products and services to you under separate contracts with insurance companies and
group benefits providers. Insurance companies and group benefits providers may pay us or our
affiliate's contingent compensation upon satisfaction of factors such as volume, persistency or
3
F1 NANCIAL
c o n c e p t s
profitability of the business placed with such insurance company or group benefits provider. In
addition, such product and service providers may pay us or our affiliates fixed amounts related to
the support of NFP company conferences, conventions and other marketing efforts.
If the foregoing is in accordance with your understanding, please sign and return to us the
duplicate copy of this letter.
cerely yours,
Accepted By:
Sarych, Principal
ancial Concepts, Inc.
Mayor, City of Shakopee
Benefits
Retirement
Investments
City Administrator, City of Shakopee
City Clerk, City of Shakopee
Date
Date
Date
Category
Passport $500 -$25
Current Rates
Renewal Rates
Employee
$480.13
$541.49
Employee +1
$960.28
$1,083.00
Family
$1,531.13
$1,726.79
ME $500 -$25
Employee
$432.18
$487.34
Employee +1
$864.38
$974.70
Family
$1,378.21
$1,554.11
Choice $1500-100% HSA
Employee
$444.22
$491.16
Employee +1
$888.43
$982.31
Family
$1,416.55
$1,566.23
ME $1500 -100% HSA
Employee
$408.48
$451.86
Employee +1
$816.96
$903.72
Family
$1,302.61
$1,440.94
FINANCIAL
c o n c e p t s
inanpfal Concepts, Inc.
),0(0
Date
Date
Benefits
Retirement
Investments
Renewal Rate Verification Agreement
Group Name:
Group Number(s):
Insurance Type:
Insurance Carrier:
Renewal Date:
City of Shakopee
97161, 98524, 98525, 58534, 58536, 58535
Medical
Medica
January 1, 2011
City of Shakopee agrees that Financial Concepts, Inc. will remain the Broker of Record and receive
all compensation for this contract between City of Shakopee & Medica for the contract period of
January 1, 2011 through December 31, 2011.
City of Shakopee
Date
Group Name:
Group Number(s):
City of Shakopee
3954 -0076
Insurance Type:
Dental
Insurance Carrier:
Delta Dental
Renewal Date:
January 1, 2011
FINANCIAL
c o n c e p t s
Category
Single
Single + 1
Family
Current Rates
$35.70
$76.05
$108.55
Renewal Rates
$36.95
$78.70
$112.35
City of Shakopee agrees that Financial Concepts, Inc. will remain the Broker of Record and receive
all compensation for this contract between City of Shakopee & Delta Dental for the contract period of
January 1, 2011 through December 31, 2011.
Fina ' ial oncepts, Inc.
t) 144
Date
Benefits
Retirement
Investments
Renewal Rate Verification Agreement
City of Shakopee
Date
Category
Long Term Disability:
Current Rates
Renewal Rates
Base
$0.23
$0.23
Buy Down
$0.74
$0.74
Basic Life /AD &D:
$0.170
$0.19
Voluntary Life:
$0.22
$0.22
Voluntary AD &D:
$0.03
$0.03
Dependent Child(ren):
$1.00 per $1,000
$1.00 per $1,000
r inaiicial Concepts, Inc.
AZYD
Date
FINANC c e IAL
c p t s
Benefits
Retirement
Investments
Renewal Rate Verification Agreement
Group Name: City of Shakopee
Group Number(s):
Insurance Type:
Insurance Carrier:
Renewal Date:
Long Term Disability: 1276
Basic Life /AD &D: 4215
Voluntary Life /AD &D: 4215
Dependent Child(ren): 4215
Long Term Disability, Basic Life /AD &D, Voluntary Life /AD &D, Dependent Child(ren)
Madison Life
January 1, 2011
City of Shakopee agrees that Financial Concepts, Inc. will remain the Broker of Record and receive all compensation for this
contract between City of Shakopee & Madison Life for the contract period of January 1, 2011 through December 31, 2011.
City of Shakopee
Date