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Home My WebLink About4.D.2. Continuation of Service Agrement with Financial Concepts Inc L i. D City of Shakopee Memorandum °' TO: Mayor and City Council Mark McNeill, City Administrator FROM: Kris Wilson, Assistant City Administrator SUBJECT: Continuation of Service Agreement with Financial Concepts, Inc. DATE: August 30, 2012 Requested Action The City Council is asked to authorize the appropriate officials to enter into the attached agreement with Financial Concepts, Inc. as the City's broker of record for employee health, dental, life and long -term disability insurance. Background While starting to work on the City's insurance renewal for calendar year 2013, I realized that the service agreement between the City and Financial Concepts, Inc. was never fully executed for 2012. The attached agreement reflects a continuation of the relationship the City has had with Financial Concepts, Inc. since the fall of 2009, when they became the City's broker of record for employee health, dental, life and long -term disability insurance. As our broker of record, FCI negotiates contracts and rates with insurance companies on behalf of the City, advises the City on trends and compliance issues within the benefit industry, and helps resolve employee questions and problems with our benefits providers. The services provided and price paid has remained unchanged since 2009, FCI simply asks that we sign a written service agreement and rate verification for each calendar year. Budget Impact As noted, the cost of FCI's services have remained unchanged at $21,000 per year since they were selected as the City's broker of record in 2009. Funding for this service is included in the adopted 2012 budget. Relationship to Vision This is a housekeeping item (F). Requested Action: The Council is asked to offer a motion to authorize the appropriate offices to enter into the attached rate verification and service agreements with Financial Concepts, Inc. for calendar year 2012. F 1 N A N C 1 A L Retirement c o n c e p t s Investments January 11, 2012 Ms. Kris Wilson Assistant City Administrator City of Shakopee 129 Holmes Street S. Shakopee, MN 55379 Dear Ms. Wilson: 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. Strategic Plan 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. F I N A N C I A L Retirement c 0 n C e p t s Investments • 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 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 F 1 N A N C 1 A L Retirement c o n c e p t s 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 F 1 N A N C 1 A L Retiirei;;e„t c o n c e p t s Investments 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 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. Sincerely yours, Sarych, Principal financial Concepts, Inc. Accepted By: Date Mayor, City of Shakopee Date City Administrator, City of Shakopee Date City Clerk, City of Shakopee 4 • F 1 N A N C 1 A L Ret c 0 n c e pt s Investments Renewal Rate Verification Agreement GroupNanie: City of Shakopee Group Number(s): 97161, 98524, 98525,;58534, 58536, 58535 Insurance Type: Medical Insurance Carrier: Medica Renewal Date: January 1, 2012 Category Current Rates Renewal Rates . Passport $500 -$25 Employee $541.49 $611.88 Employee +1 $1,083.00 $1 ,223.79 Family $1,726.79 $1,951.27 ME $500 -$25 Employee $487.34 $550.69 Employee +1 $974.70 $1,101.41 Family $1,554.11 $1,756.14 Choice $1500 -90% HSA Employee $491.16 $490.86 Employee +1 $982.31 $981.72 Family $1,566.23 $1,565.28 ME $1500 -90% HSA Employee $451.86 $451.59 Employee +1 $903.72 $903.17 Family $1,440.94 $1,440.07 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, 2012 through December 31, 2012. Finan I oncepts, Inc. City of Shakopee a° Date Date • F I N A N C I A L Relirernent CO n C e Pt S Investments Renewal Rate Verification Agreement Group Name. City of Shakopee Group Number(s): 3954 -0076 Insurance Type: Dental Insurance Carrier: Delta Dental Renewal Date: January 1, 2012 Category Current Rates Renewal Rates Single $36.95 $38.25 Single + 1 $78.70 $81.45 Family $112.35 $116.30 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, 2012 through December 31, 2012. ina is Concepts, Inc. City of Shakopee ► J ia-u) 3 Date Date a { Rate Verification Agreement ility: 1276 _ .x,..___ 4215 &D: 4215 ren): 4215 ility, Basic Life /AD &D, Voluntary Life /AD &D, Dependent Child(ren) D per $100 C.M.E $0.205 per $100 C.M.E. per $100 C.M.E. $0.740 per $100 C.M.E. 190 per $1000 $0 per $1000 220 per $1000 $0,220 per $1000 030 per $1000 $0.030 per $1000 .00 per $1,000 $1.00 per $1,000 Inc. will remain the Broker of Record and receive all compensation for this fe for the contract period of December 31, 2014. City of Shakopee Date