Title
Non-Medicare Retiree Medical Health Plans - RFP HR 21-014 (Ordinance S-48505)
Description
Request to authorize the City Manager, or his designee, to enter into a contract with United HealthCare Services, Inc., to provide medical administration, medical networks, and medical management services for the City’s non-Medicare retiree medical health plans in an amount not to exceed $10,000,000 for a five-year period. Further request to authorize the City Controller to disburse all funds related to this item.
Report
Summary
Currently, the City has a contract which offers four self-funded non-Medicare retiree plans with approximately 1,177 covered members. The current contract is set to expire Dec. 31, 2022. Retirees are responsible to pay their healthcare premium. The Administrative services are paid by the City’s Health Care Benefits Trust Fund and are paid on a per retiree basis.
Procurement Information
RFP HR 21-014 was conducted in accordance with Administrative Regulation 3.10. The Human Resources Department received four proposals. The Notice of Solicitation was emailed to 584 vendors registered in ProcurePHX and known vendors in the medical healthcare industry.
The offers were scored using the following criteria: Qualifications, Experience and References (250 points), Method of Approach (450 points) and pricing (300 points). Evaluation occurred by a five-person panel. The evaluation panel determined that three offers were within the competitive range. Finalist presentations and a Best and Final Offer (BAFO) were conducted with all offerors in the competitive range. After reviewing the BAFO response, it was the consensus of the evaluation committee to recommend awarding the contract to United HealthCare Services, Inc. The BAFO resulted in a reduction in price of approximately $565,000.
The consensus scores are as follows:
United HealthCare Services, Inc. 853 points
Banner Health and Aetna Health Plan 813 points
Blue Cross Blue Shield of Arizona, Inc. 799 points
Cigna Health and Life Insurance 726 points
The Human Resources Director recommends the offer from United HealthCare Services, Inc., be accepted as the highest scored, responsive and responsible offer most advantageous to the City.
Contract Term
The five-year contract term shall begin on or about Jan. 1, 2023.
Financial Impact
The aggregate five-year contract value for these services shall not exceed $10,000,000. Retirees pay their healthcare premium via automatic deduction from monthly pension checks. Administrative services provided by United HealthCare Services, Inc., will be paid on a per retiree basis. These costs are paid by the City’s Health Care Benefits Trust Fund. No General Funds are needed.
Department
Responsible Department
This item is submitted by Assistant City Manager Lori Bays and the Human Resources Department.