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HomeMy WebLinkAbout17 - Benefit Broker & Consulting Services Appointment• 0 June 28, 1999 Agenda Item // 17 CITY OF NEWPORT BEACH ADMINISTRATIVE SERVICES DEPARTMENT Resource Management•Human Resources•Risk ManagementoRseal Serviees•M.I.S. •RevenuceAmounting DATE: TO: FROM: SUBJECT: June 21, 1999 Honorable Mayor ONeil and Members of the Newport Beach City Council Lauren F. Farley, Risk Manager 0-11 Appointment of Benefit Broker and Consulting Services RECOMMENDATION: Authorize staff to issue a broker of record letter to AON Consulting for the purpose of providing benefit and consulting services for the city's benefit program. BACKGROUND: The City of Newport Beach offers 15 health plans to its active employees, 9 additional plans to retirees, 6 ancillary programs and a 125 flexible spending program. A survey of other Orange County municipalities, indicated that most cities, with more staff, do not offer more than 10 medical plans to its active and retiree employees combined. Huffman & Associates has provided benefit brokerage and consulting services to the City of Newport Beach for the past 28 years. In an effort to ensure that we are providing employees and retired employees with complete and accurate information and paying a competitive rate for these services, Human Resources sent out a Request For Proposal (RFP) for benefit broker services to nine qualified benefit brokers (see attached list). Our current broker, Huffman & Associates chose not to respond to the RFP. We received eight responses to the RFP. We reviewed the responses and chose four brokers to participate in the interview process. At the conclusion of the interview process and reference checks, the interview panel selected AON Consulting as the brokerage and consulting firm to be best suited to the benefit needs of the City of Newport Beach. AON will assume the same fee structure (commission basis) as the existing broker agreement. The commissions paid to AON are factored into the monthly premium rates and are the standard 1 -3% in the industry. This equals approximately $35,000 to $50,000 in an annual fee that fluctuates based on the number of insured lives in the program on an annual basis. This change in brokers will not affect the amount budgeted for the city's benefit program in FY 99/00. The change in brokers will be effective 7/1/99 and will be renewed annually on the basis of performance. I. •'.n DanHolds AwnedMmageanerrtlm Services 2301 DupornDr, #100 lrvine,CA92612 RFP BrokerlAst I:: I ...: - �Iti Iii•- .i - • 11 1' Y Q.' JamesRm ick Employ©eBme& Marsh &McLerman 4695 MacA&=Gourk Stf_ 550 NeM=Beach,CA92660 RobedF. Driver Go. hic. Atm- RiekGulley 162AFifhAverwe SanDiego,CA 92101 Huffi= &Associates Ath Ed N. Huffman P.O.Box3296 DmmPo4CA 92629 western Group Ag=es Inc. Atbm Eric Blore 2001 S. BaaurgtmAve., #111 LosAngdes,CA 90025 0 i 0