Title
Dental Plans and Services Vendor Recommendation (Ordinance S-44860)
Description
Request to authorize the City Manager, or his designee, to enter into a contract with Cigna Dental for dental plans and services for employees and/or retirees. The projected annual cost for employee dental is $12.9 million. The City pays $10 million and the employees pay $2.9 million of this amount. Retiree dental is fully paid for by the retirees enrolled. Further request authorization for the Controller to disburse all funds related to this item.
Report
Summary
The City issued a Request for Proposals (RFP) on March 28, 2018, seeking proposals for dental PPO administrative services for employees and fully-insured dental PPO and HMO plans for employees and retirees. Six firms submitted proposals: Aetna, Avesis, Cigna, Delta Dental, MetLife and United Concordia.
Procurement Information
The City retained Mercer to receive, review and summarize responses, including analysis of the financial offers, scope of provider networks, and coverage. Evaluation occurred by a committee composed of the Deputy HR Director, Health Care Trust Board Chair, Health Care Trust Accountant, Benefits Supervisor, and two labor representatives: PLEA and AFSCME Local 2960.
On May 8, 2018, the committee convened to review Mercer’s analysis and found that only two of the six proposers were able to provide both dental plan designs requested: a dental HMO and a dental PPO. The committee’s preference to have both plans offered by the same carrier narrowed down the proposers to Cigna Dental and Delta Dental. The committee asked for additional information and clarification and a second review meeting was scheduled for May 24, 2018.
On May 24, 2018, the committee convened to review the additional information gathered by Mercer. Scores were based on Price (300 points), Qualifications & Experience (250 points), and Method of Approach (450 points), for a total of 1,000 possible points. The results were as follows:
Cigna Dental: 886
Delta Dental: 806
Aetna: 528
MetLife: 498
United Concordia: 488
Avesis: 455
Contract Term
The contract term will be three years, starting Jan. 1, 2019. Provisions of the contract will include an option to extend the term for up to two years, in one-year increments, which may be exercised by the City Manager, or his designee.
Financial Impact
The dental carrier sets the fully-insured dental HMO rates and the Health Care Trust Board sets the self-insured dental PPO rates each year based on Administrative Services Only (ASO) rates and claims experience. The projected annual cost for employee dental is $12.9 million. The City pays $10 million and the employees pay $2.9 million of this amount. Retiree dental is fully paid for by the retirees enrolled.
Concurrence/Previous Council Action
This contract was recommended for approval by the Sustainability, Housing, Efficiency, and Neighborhoods Subcommittee on June 19, 2018, by a vote of 3-0.
Department
Responsible Department
This item is submitted by Acting Deputy City Manager Toni Maccarone and the Human Resources Department.