Title
Flexible Spending Account and COBRA Administration Services (Ordinance S-48239)
Description
Request to authorize the City Manager, or his designee, to authorize additional payment authority of $220,000 (S-46757) with ConnectYourCare, LLC to provide Flexible Spending Account (FSA) administration services and the Consolidated Omnibus Budget Reconciliation Act (COBRA) administration services. The total revised aggregate amount of $440,000 will not exceed $160,000 for FSA services and $280,000 for COBRA services over five years. Further request authorization for the City Controller to disburse all funds related to this item.
Report
Summary
This request is needed as a result of negotiations with the vendor who misunderstood the billing terms in the Request for Proposal (RFP). City staff determined it best to negotiate rates with this vendor as the benefits provided are annually-calculated federally regulated benefits. Negotiations resulted in rates comparable to other offers in the RFP process.
A FSA is a tax-favored program offered by employers which allows its employees to pay for eligible out-of-pocket health care and dependent care expenses with pre-tax dollars. Currently, there are approximately 1,100 employee healthcare FSA accounts and 300 employee dependent care FSA accounts.
COBRA requires employers with group health plans to provide temporary continuation of group health coverage (medical, dental and vision), when such coverage would otherwise be lost, to covered employees and their dependents. The City typically has 600 to 700 COBRA qualified participants.
Contract Term
The five-year contract began on Jan. 1, 2021 and will expire on Dec. 31, 2025.
Financial Impact
The revised aggregate five-year value shall not exceed $440,000. The contract value is based on current and projected enrollment. Funds are available in the Human Resources Department's budget.
Concurrence/Previous Council Action
RFP HR 20-107 was conducted in accordance with Administrative Regulation 3.10 and approved by Council on June 17, 2020.
Department
Responsible Department
This item is submitted by Assistant City Manager Lori Bays and the Human Resources Department.