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2017-173-3278 - Agreement with AvmedRESOLUTION NO. 2017-173-3278 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS, FLORIDA, AUTHORIZING THE CITY MANAGER TO RENEW THAT CERTAIN AGREEMENT WITH AVMED, INC., FOR EMPLOYEE GROUP MEDICAL INSURANCE FOR CALENDAR YEAR 2018; PROVIDING FOR THE ADOPTION OF REPRESENTATIONS; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, in 2013, the City of Miami Gardens conducted a formal bid to obtain Employee Health Insurance Plan services for Calendar Year 2014, and WHEREAS, the contract was awarded to AvMed, Inc. ("AvMed"), with the option to renew annually, as agreeable by both parties, and WHEREAS, the City's current employee group medical insurance coverage with AvMed expires on December 31, 2017, and WHEREAS, AvMed has agreed to a zero percent (0%) increase from our current 2017 rates, resulting in a forty percent (40%) savings, compared to the initial proposal, with no change to premiums or benefits, and WHEREAS, City Staff recommends the City Council authorize the City Manager to renew that certain Agreement with AvMed for employee group medical insurance for Calendar Year 2018, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS, FLORIDA AS FOLLOWS: Section 1: ADOPTION OF REPRESENTATIONS: The foregoing Whereas paragraphs are hereby ratified and confirmed as being true, and the same are hereby made a specific part of this Resolution. Section 2: AUTHORIZATION: The City Council of the City of Miami Gardens hereby authorizes the City Manager to renew that certain Agreement with AvMed, Inc., for employee group medical insurance for Calendar Year 2018, with no increase to premiums. Section 3: EFFECTIVE DATE: This Resolution shall take effect immediately upon its final passage. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS AT ITS REGULAR MEETING HELD ON NOVEMBER 8, 2017. ERHABORiOFfO^DARti J/ICE MAYOR ATTEST: RONETTA TAYLOR, j^MC, CITY CLERK PREPARED BY: SONJA KNIGHTON DICKENS, CITY ATTORNEY SPONSORED BY: CAMERON D. BENSON, CITY MANAGER MOVED BY COUNCILWOMAN DAVIS SECONDED BY COUNCILWOMAN ROBINSON VOTE: 6-0 Mayor Oliver Gilbert, III (Yes) (No) Not present Vice Mayor Erhabor Ighodaro, Ph.D. _x (Yes) (No) Councilwoman Lisa C. Davis _x (Yes) (No) Councilman Rodney Harris _x (Yes) (No) Councilwoman Lillie Q. Odom _x (Yes) (No) Council Woman Felicia Robinson _x (Yes) (No) Councilman David Williams Jr. _x (Yes) (No) RESOLUTION NO. 2017-173-3278 18605 NW 27 Avenue Miami Gardens, Florida 33056 City of Miami Gardens Agenda Cover Memo Council Meeting Date: November 8, 2017 Item Type: (Enter X in box) Resolution Ordinance Other X Fiscal Impact: (Enter X in box) Yes No Ordinance Reading: (Enter X in box) 1st Reading 2nd Reading X Public Hearing: (Enter X in box) Yes No Yes No X Funding Source: General Fund Advertising Requirement: (Enter X in box) Yes No X Contract/P.O. Required: (Enter X in box) Yes No RFP/RFQ/Bid #: RFP 12-13-045 X Sponsor Name Cameron D. Benson, City Manager Department: Human Resources Short Title: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS, FLORIDA, AUTHORIZING THE CITY MANAGER TO RENEW THAT CERTAIN AGREEMENT WITH AVMED, INC., FOR EMPLOYEE GROUP MEDICAL INSURANCE FOR CALENDAR YEAR 2018; PROVIDING FOR THE ADOPTION OF REPRESENTATIONS; PROVIDING FOR AN EFFECTIVE DATE. Staff Summary: Background In 2013, the City conducted a formal bid to obtain Employee Health Insurance Plan services for Calendar Year 2014. The contract was awarded to AvMed, with a 1.5% rate increase for HMO Plan Coverage and 8.5% rate increase for POS Plan coverage, with the option to renew annually, as agreeable by both parties. Calendar Year 2015 When the City’s Group Health Insurance coverage expired on December 31, 2014, AvMed initially proposed a 4.5% overall cost increase to renew the City’s Group Employee Health Insurance for Calendar Year 2015. In an effort to reduce renewal cost for employee health insurance for Calendar Year 2015 staff explored the viability of modifying the insurance plan design to realize cost savings. As a result, staff identified a plan modification which reduced the current overall cost by 2.9%, a 7.4% savings compared to the initial proposal. Accordingly, the HMO Plan Coverage and the POS Plan coverage were renewed. AGENDA ITEM K-11 AVMED RENEWAL 18605 NW 27 Avenue Miami Gardens, Florida 33056 Calendar Year 2016 In an effort to reduce renewal cost for employee health insurance for Calendar Year 2016 staff explored the viability of modifying the insurance plan design to realize cost savings. As a result, staff identified a plan modification which reduced the overall cost by 5%. Calendar Year 2017 The City’s Group Health Insurance coverage expired December 31, 2016. AvMed proposed a 3.1% rate increase to our current 2016 in-force rates and current benefits to renew the City’s Group Employee Health Insurance for Calendar Year 2017. After staff negotiations AvMed agreed to a 5% rate concession from our current 2016 in- force rates. Resulting in an 8.1% savings compared to the initial proposal. This concession equated to approximately a $332,000 annual savings to the City from the 2017 renewal increase. Current Situation: The City’s Group Health Insurance coverage expires December 31, 2017. AvMed proposed a 40% rate increase to our current 2017 in-force rates and current benefits to renew the City’s Group Employee Health Insurance for Calendar Year 2018. After staff negotiations AvMed agreed to a 0% increase from our current 2017 in-force rates. Resulting in a 40% savings compared to the initial proposal with no change to premiums or benefits. Analysis Of the 410 employees and retirees currently enrolled under the City’s Group Health Insurance Plans – HMO, POS and POS Choice combined; 96% (393) are covered under the HMO Plan, 4% (17) are covered under the POS Plan, and 0% (0) is covered under the POS Choice Plan. The City currently contributes 100% of the cost of the employee premium for the HMO Plan and a portion of the cost of the employee premium for HMO dependent coverage. The table below provides an analysis of the AvMed proposal to renew the City’s Group Employee Health Insurance Coverage for Calendar Year 2018. HMO Current Cost Proposal % Increase % Savings Employee Only $467.36 $467.36 0% 0% Employee and Spouse $887.98 $887.98 0% 0% Employee plus Family $1,261.82 $1,261.82 -0% 0% POS Current Cost Proposal % Increase % Savings Employee Only $597.02 $597.02 0% 0% Employee and Spouse $1,134.33 $1,134.33 0% 0% Employee plus Family $1,611.89 $1,611.89 0% 0% POS CHOICE Current Cost Proposal % Increase % Savings Employee $581.71 $581.71 0% 0% 18605 NW 27 Avenue Miami Gardens, Florida 33056 Only Employee and Spouse $1,105.25 $1,105.25 0% 0% Employee plus Family $1,570.57 $1,570.57 0% 0% Proposed Action: For the City Council to renew AvMed as the City’s carrier for Group Employee Health Insurance for Calendar Year 2018 with no increase to premium. Attachment: Attachment A – 2018 Benefits Proposal