12-0717_ALLIANT INSURANCE SERVICES, INC_D20_Agenda Report 711712012
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City of San Juan Capistrano
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TO: Karen P. Brust, City n
FROM: Tom Bokosky, Human RM n� m
DATE: July 17, 2012
SUBJECT: Consideration of a Personal Services Agreement to Provide Health
Benefits Consulting and Broker Services (Alliant Employee Benefits
Group) (City Council Urgent Strategic Priority)
RECOMMENDATION:
By motion, approve the Personal Services Agreement with Alliant Employee Benefits
Group to provide Health Benefits Consulting and Broker Services, for a one year term,
with up to three (3) additional one (1) year options, for an amount not to exceed $18,500
per year.
EXECUTIVE SUMMARY:
The Rule Group has been the City's benefit insurance broker for the last 18 years. The
City does not have a contract with The Rule Group, which is compensated $21,000
annually through commissions paid by the insurance companies. Proposals were
solicited from benefit insurance brokers and staff recommends approving a Personal
Services Agreement with Alliant Employee Benefits Group (Alliant). The Personal
Services Agreement compensates Alliant $18,500, for a one year term, with up to three
(3) additional one (1) year options, for a total compensation not to exceed $74,000. To
demonstrate its commitment to provide the City superior customer service, Alliant
agreed to put twenty percent (20%) of its consulting fee at risk. At any time, the City
may invoke the service guarantee, based solely on the City's satisfaction.
DISCUSSION/ANALYSIS:
The Fiscal Year 2012/2013 Budget is $275,265 for dental and vision benefits, life
insurance, disability insurance and the employee assistance program. The insurance
broker's commission averages eight percent (8%) of the premiums paid by the City.
Therefore, as benefit premiums increase the broker's compensation increases
proportionally.
To better manage these benefit costs and to clearly define service standards, City staff
solicited proposals from five benefit consultants: Alliant, David Malt, Intercare Insurance
City Council Agenda Report:
July 17, 2012
Page 2 of 2
Solutions, Keenan & Associates and The Rule Group. The Human Resources Manager
and representatives from the San Juan Capistrano Classified Employees Association
and the San Juan Capistrano Management and Professional Employees Association
interviewed three of the firms: Alliant, Keenan & Associates and The Rule Group. The
committee recommends entering into a Personal Services Agreement with Alliant.
Effective August 1, 2012, the Personal Services Agreement establishes an annual
$18,500 flat fee. The Agreement also clearly defines service standards as contained in
Exhibit "A.", Scope of Services.
FISCAL IMPACT:
The City's benefit insurance plans are purchased on a calendar year basis. For Fiscal
Year 2012/2013, the City budgeted $275,265 in premiums for the dental and vision
benefits, life insurance, disability insurance and the employee assistance program. The
insurance companies pay the current broker $21,000 annually. The proposed Personal
Services Agreement will fix the broker's compensation at $18,500 annually and save the
City $1,040 in fees for the period of August 1, 2012, to December 31, 2012. Beginning
January 1, 2013, the Personal Services Agreement will save the City approximately
$4,600 annually.
ENVIRONMENTAL IMPACT:
Not applicable.
PRIOR CITY COUNCIL REVIEW:
Not applicable.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
Not applicable.
NOTIFICATION:
Alliant Employee Benefits Group
San Juan Capistrano Classified Employees Association
San Juan Capistrano Management and Professional Employees Association
ATTACHMENT(S)-
Attachment 1 — Personal Services Agreement with Alliant Employee Benefits Group
PERSONAL SERVICES AGREEMENT
THIS AGREEMENT is made, entered into, and shall become effective this "Ist day of
August 2012, by and between the City of San ,duan Capistrano (hereinafter referred to as
the "City") and Alliant Insurance Services, Inc. (hereinafter referred to as the"Consultant").
RECITALS:
WHEREAS, City desires to retain the services of Consultant to perform health and
welfare benefit consulting and brokers services, and
WHEREAS, Consultant is qualified by virtue of experience, training, education and
expertise to accomplish such services.
NOW, THEREFORE, City and Consultant mutually agree as follows:
Section 1. Scope of Work.
The scope of work to be performed by the Consultant shall consist of those tasks as
set forth in Exhibit"A," attached and incorporated herein by reference. To the extent that
there are any conflicts t.3tween the provisions described in Exhibit"A"and those provisions
contained within this Agreement, the provisions in this Agreement shall control.
Section 2, Terra.
This Agreement shall commence on the effective date and shall continue through
July 31, 2013. At its sole discretion, the City may extend this Agreement up to three (3)
additional (1) year terms.
Section 3. Compensation.
3.1 Amount.
Total compensation for the services hereunder shall not exceed $18,500
annually as set forth in Exhibit "S," attached and incorporated herein by reference_
.2 Method of Payment.
Subject to Section 3.1, Consultant shall subr-hit monthly invoices based on
total services which have been satisfactorily,completed for such monthly pefigd. The City.
will pay monthly progress payments based on approved invoices in accordance with this
Section.
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ATTACHMENT 1
3.3 Records of Expenses.
Consultant shall keep complete and accurate records of all costs and
expenses incidental to services covered by this Agreement. These records will be made
available at reasonable times to the City. Invoices shall be addressed as provided for in
Section 16 below.
Section 4. Independent Contractor.
It is agreed that Consultant shall act and be an independent contractor and not an
agent or employee of the City, and shall obtain no rights to any benefits which accrue to
Agency's employees.
Section 5. Limitations Upon Subcontracting and Assignment.
The experience, knowledge, capability and reputation of Consultant, its principals
and employees were a substantial inducement for the City to enter into this Agreement.
Consultant shall not contract with any other entity to perform the services required without
written approval of the City, This Agreement may not be assigned, voluntarily or by
operation of law, without the prior written approval of the City. If Consultant is permitted to
subcontract any part of this Agreement by City, Consultant shall be responsible to the City
for the acts and omissions of its subcontractor as it is for persons directly employed.
Nothing contained in this Agreement shall create any contractual relationships between
any subcontractor and City. All persons engaged in the work will be considered employees
of Consultant. City will deal directly with and will make all payments to Consultant.
Section 6. Chances to Scope of Mork.
For extra work not part of this Agreement, a written authorization from City is
required prior to Consultant undertaking any extra work. In the event of a change in the
Scope of Work provided for in the contract documents as requested by the City,the Parties
hereto shall execute an addendum to this Agreement setting forth with particularity all
terms of the new agreement, including but not limited to any additional Consultant's fees.
Section 7. Familiarity with Work and/or Construction Site.
By executing this Agreement, Consultant warrants that: (1) it has investigated the
work to be performed; (2) if applicable, it has investigated the work site(s), and is aware of
all conditions there; and (3) it understands the facilities, difficulties and restrictions of the
work to be performed under this Agreement. Should Consultant discover any latent or
unknown conditions materially differing from those inherent in the work or as represented
by City, it shall immediately inform the City of this and shall not proceed with further work
under this Agreement until written instructions are received from the City.
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Section 8. Time of Essence.
Time is of the essence in the performance of this Agreement.
Section 9. Compliance with Law.
Consultant shall comply with all applicable laws, ordinances, codes and regulations
of federal, state and local government.
Section 10. Conflicts of Interest.
Consultant covenants that it presently has no interest and shall not acquire any
interest, direct or indirect, which would conflict in any manner or degree with the
performance of the services contemplated by this Agreement. No person having such
interest shall be employed by or associated with Consultant.
Section 11. Copies of Work Product.
At the completion of the work, Consultant shall have delivered to City at least one
(1) copy of any final reports and/or notes or drawings containing Consultant's findings,
conclusions, and recommendations with any supporting documentation. All reports
submitted to the City shall be in reproducible format, or in the format otherwise approved
by the City in writing.
Section 12. Ownership of Documents.
All reports, information, data and exhibits prepared or assembled by Consultant in
connection with the performance of its services pursuant to this Agreement are confidential
to the extent permitted by law, and Consultant agrees that they shall not be made available
to any individual or organization without prior written consent of the City. All such reports,
information, data, and exhibits shall be the property of the City and shall be delivered to the
City upon demand without additional costs or expense to the City. The City acknowledges
such documents are instruments of Consultant's professional services.
Section 13. Indemnitv.
To the fullest extent permitted by law, Consultant agrees to protect, defend, and
hold harmless the City and its elective and appointive boards, officers, agents, and
employees from any and all claims, liabilities, expenses, or damages of any nature,
including attorneys' fees, for injury or death of any person, or damages of any nature,
including interference with use of property, arising out of, or in any way connected with the
negligence, recklessness and/or intentional wrongful conduct of Consultant, Consultant's
agents, officers, employees, subcontractors, or independent contractors hired by
Consultant in the performance of the Agreement. The only exception to Consultant's
responsibility to protect, defend, and hold harmless the City, is due to the negligence,
recklessness and/or wrongful conduct of the City, or any of its elective or appointive
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including interference with use of property, arising out of, or in anyway connected with the
negligence, recklessness and/or intentional wrongful conduct of Consultant, Consultant's
agents, officers, employees, subcontractors, or independent contractors hired by
Consultant in the performance of the Agreement. The only exception to Consultant's
responsibility to protect, defend, and hold harmless the City, is due to the negligence,
recklessness and/or wrongful conduct of the City, or any of. its elective or appointive
boards, officers, agents, or employees.
This hold harmless agreement shall apply to all liability regardless of whether any
insurance policies are applicable. The policy limits do not act as a limitation upon the
amount of indemnification to be provided by Consultant.
Section 14. Insurance.
On or before beginning any of the services or work called for by any term of this
Agreement, Consultant, at its own cost and expense, shall carry, maintain for the duration
of the agreement, and ,provide proof thereof that is acceptable to the City, the insurance
specified below with insurers and under forms of insurance satisfactory in all respects to
the City. Consultant shall not allow any subcontractor to commence work on any
subcontract until all insurance required of the Consultant has also been obtained for the
subcontractor. Insurance required herein shall be provided by Insurers in good standing
with the State of California and having a minimum Best's Guide Rating of A- Class VII or
better.
14.1 Comprehensive General Liability.
Throughout the term of this Agreement, Consultant shall maintain in full force
and effect Comprehensive General Liability coverage in an amount not less than one
million dollars per occurrence ($1,000,000.00), combined single limit coverage for risks
associated with the work contemplated by this agreement. If a Commercial General
Liability Insurance form or other form with a general aggregate limit is used, either the
general aggregate limit shall apply separately to the work to be performed under this
agreement or the general aggregate limit shall be at least twice the required occurrence
limit.
14.2 Comprehensive Automobile Liability.
Throughout the term of this Agreement, Consultant shall maintain in full force
and effect Comprehensive Automobile Liability coverage, including owned, hired and non-
owned vehicles in an amount not less than one million dollars per occurrence
($1,000,000.00).
14.3 Workers' Compensation and Employers Liability
Workers' Compensation Insurance in an amount required by the laws of the
State of California and Employers' Liability insurance in the amount of one million dollars
per occurrence ($1,000,000).
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volunteers as additional insureds as respects each of the following: Liability arising out of
activities performed by or on behalf of Consultant, including the insured's general
supervision of Consultant; products and completed operations of Consultant; premises
owned, occupied or used by Consultant; or automobiles owned, leased, hired, or borrowed
by Consultant. The coverage shall contain no special limitations on the scope of protection
afforded City, its officers, employees, agents, or volunteers.
14.5 Professional Liability/Errors and Omissions Coverage
Throughout the term of this Agreement, Consultant shall maintain Errors and
Omissions Coverage (professional liability coverage) in an amount of not less than One
Million Dollars ($1,000,000) per claim made. Prior to beginning any work under this
Agreement, Consultant shall submit an insurance certificate to the City's General Counsel
for certification that the insurance requirements of this Agreement have been satisfied.
14.6 Notice of Cancellation/Termination of Insurance.
The above policy/policies shall not terminate, nor shall they be cancelled, nor
the coverages reduced, until after thirty(30)days'written notice is given to City, except that
ten (10) days' notice shall be given if there is a cancellation due to failure to pay a
premium.
14.7 Terms of Compensation.
Consultant shall not receive any compensation until all insurance provisions
have been satisfied.
14.8 Notice to Proceed.
Consultant shall not proceed with any work under this Agreement until the
City has issued a written "Notice to Proceed"verifying that Consultant has complied with all
insurance requirements of this Agreement.
Section 15. Termination.
City shall have the right to terminate this Agreement without cause by giving thirty
(30) days' advance written notice of termination to Consultant.
In addition, this Agreement may be terminated by any party for cause by providing
ten (10) days' notice to the other party of a material breach of contract. If the other party
does not cure the breach of contract, then the agreement may be terminated subsequent
to the ten (10) day cure period.
Section 16. Notice.
All notices shall be personally delivered or mailed to the below listed addresses, or
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to such other addresses as may be designated by written notice. These addresses shall
be used for delivery of service of process:
To City: City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn.: Tom Bokosky, Human Resources Manager
To Consultant: Alliant Insurance Services
1301 Dove Street
Suite 200
Newport Beach, CA 926602436
Attn: Michael Morales
Section 17. Attorneys" Fees.
If any action at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys`fees, costs and
necessary disbursements in addition to any other relief to which he may be entitled.
Section 18. Dispute Resolution.
In the event of a dispute arising between the parties regarding performance or
interpretation of this Agreement, the dispute shall be resolved by binding arbitration under
the auspices of the Judicial Arbitration and Mediation Service ("JAMS").
Section 19. Entire Agreement.
This Agreement constitutes the entire understanding and agreement between the
parties and supersedes all previous negotiations between them pertaining to the subject
matter thereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
CITY OF SAN JUAN CAPISTRANO
By:
CONSULTANT
By:
ATTEST:
Maria Morris, City Clerk
APPROVED AS TO FORM:
t J1 1
�r
Omar`Sa6&6\41,City Attorney
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Exhibit "A."
City of San Juan Capistrano
Scope of Services
1. General Consulting Services:
Manage all employee benefit offerings, including all voluntary benefits
• Participate in insurance committee meetings as requested
• Provide assistance with any claims, billing, or eligibility issues
• Consult with insurance carriers regarding any carrier specific issues
• Assist the City in effectively communicating all benefit offerings to employees
and retirees
• Establish goals, timelines, and milestones
• Review all contracts and Summary Plan Documents
2. Renewal Process:
• Establish renewal and marketing timeline
• Request, obtain, and negotiate benefit plan renewals
• Prepare and distribute detailed bid specifications to obtain viable, competitive
carrier proposals for all applicable coverage.
• Provide a detailed analysis comparing current offerings with market
proposals (including plan comparisons, rate exhibits, network comparisons,
etc.)
Negotiate the most cost-effective program while maintaining benefits
• Educate the insurance committee on available benefit plans options
• Provide recommendations during provider selection process
Assist in all transitional issues: ID cards, access of care issues, elevated
service issues, etc.
3. Open Enrollment Health Fair:
• Enrollment Packets (including announcements, instructions, brochure,
current elections, etc.)
• Create customized open enrollment communications for active employees
and retirees
• Coordinate and attend the annual health fair (Open Enrollment kickoff)
• Create a Universal Enrollment Form for non-website based enrollments
Assist with the enrollment packets provided at the health fair and thereafter
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4. Education:
• Attend periodic briefings to provide benefit updates to employees
Pian and conduct educational meetings as needed (i.e. Medicare Part D,
Pharmacy, etc.)
• Provide email updates, seminars, and meetings addressing current
legislative and compliance issues (i.e. COBRA, HIPAA, Medicare Part D,
etc.)
• Present utilization and experience results to the insurance committee as
directed
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Exhibit "B."
Compensation
Consultant will charge an $18,500 annual consulting fee for the agreed upon Scope of
Services. The rates with the Insurance Carriers will not be immediately reduced. The
carriers will pay Consultant commission from August 1, 2012— December 31, 2012 not to
exceed the consulting fee of $7,708.33.
On January 1, 2013, Consultant will request that all premium rates be net of commissions
going forward. Consul ant will then be paid directly from the City the consulting fee of
$1,541.67 per month.
Service Guarantee
Consultant is confident that it will be able to exceed the City's service expectations and
provide the best in class consulting. To illustrate its commitment, Consultant is willing to
place 20% of its consulting fee at risk. At any time, the City can invoke the terms of the
guarantee, based solely on the City's satisfaction.
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