The URL can be used to link to this page

Home My WebLink About4.D.2. Extension of Broker of Record Agreement -4 D. . r SHAKO] F r - TO: Mayor and City Council Mark McNeill, City Administrator FROM: Kris Wilson, Asst City Administrator DATE: 01/08/2013 SUBJECT: Extension of Broker of Record Agreement (F) Action Sought The City Council is asked to authorize the appropriate officials to enter into a two -year professional services agreement with Financial Concepts, Inc. Background Financial Concepts, Inc. has served as the City's broker of record for employee medical, dental, life and long -term disability insurance since September of 2009. As our broker of record, Financial Concepts represents the City in all negotiations with insurance companies such as Medica and Delta Dental, assists me in evaluating benefit options, trends and competitiveness and provides education and resources related to legal compliance, for issues such as implementation of the federal health care reform law. Attached is a three year extension of the professional services agreement with Financial Concepts, covering calendar years 2013, 2014 and 2015. The agreement reflects the same set of services the City has been receiving for the past three years at the same price. Budget Impact Financial Concepts receives $21,000 per year for their services. The vast majority of this amount comes from commissions paid to them directly from the insurance companies we contract with, such as Medica and Delta Dental. At the end of each year, the City and Financial Concepts settle -up to ensure that the exact $21,000 is received. In some years this requires a small payment from the City to Financial Concepts and in other years it has lead to the City receiving a refund from Financial Concepts. For years in which the City owes money to Financial Concepts at the end of the year, those funds are taken from the professional services line of the Human Resources Division's budget. Relationship to Vision This is a housekeeping item. Recommendation Financial Concepts has provided the City with excellent service for the past three years at a fair and stable price. I recommend that we extend the professional services agreement for the period of January 1, 2013 - December 31, 2015. Requested Action If the Council concurs, it is asked to authorize the appropriate officials to enter into a professional services agreement with Finanical Concepts, Inc. for calendar years 2013, 2014 and 2015. Attachments: Financial Concepts Professional Services Agreement F 1 N A N C 1 A L Benefits Retirement C 0 f C e p t 5 Wealth Management December 19, 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 January 1, 2013 through December 31, 2015. 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. 9655 Schmidt Lake Road \ Plymouth, MN 55442 \ Ph 763.450.1800 F 763,450.1801 \ wwwi.fci- benefits.corn < ;o ^.r ties o:f red lhrourh NF rkrisitiEs. M?r...:' . ;retxx Irn'estrn t t soft' Sesys;eE offered throtaaf. ° it en r..vzJ C.0 u Pts. li Re!.ist..:e:` I r 901 dvisa CZ CtiN ,, .:J. is v: alfiii4a of NIP er,. r rtva .. 6 r.. mud a Bruce, my f .r i<t k)1 Elwin .i,. 1 .: t t .�. C:rf f H4 . ,, l rJU. =K: ,ou,il.i u.,:)_7 ?Ik"ri +)'Hato? Uk k+ - 'Y.i r .141. OC t) :lief Sc :v t:3..r I ire:lrirf,: t Ad {r..:.... • 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 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 Tong -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 January 1, 2013 through December 31, 2015, 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 profitability of the business placed with such insurance company or group benefits provider. In 3 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, rincipal (nancia Concepts, Inc. Accepted By: Date Mayor, City of Shakopee Date City Administrator, City of Shakopee Date City Clerk, City of Shakopee 4