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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Director of Human Resources
DATE: September 19, 2018
SUBJECT:
A Resolution Authorizing Renewal of Benefit Consulting Services with Group Alternatives, Inc. For the Period of January 1, 2019 through December 31, 2021.
PURPOSE:
To obtain authorization to renew the agreement with Group Alternatives, Inc. for benefit consulting services.
BACKGROUND:
Group Alternatives, Inc. is a benefit consulting firm specializing in large employers, partnering with clients to control costs and maximize benefit offerings. The City first began utilizing Group Alternatives' services in 2015 to facilitate the RFP process for the third party administration of benefits. They assisted the City through the evaluation period which resulted in CIGNA being selected for the City's third party administration (TPA). Since that time, Group Alternatives has provided services including but not limited to, securing the Aetna Health Plan for Medicare eligible retirees, funding analysis, financial and compliance implications of legislative changes, provider network analysis including access and claim impact, ombudsmen with Cigna, Blue Cross and Blue Shield and Aetna Medicare Advantage.
DISCUSSION:
Group Alternatives has been instrumental in assisting the City with implementing cost effective changes while at the same time maintaining a robust benefit plan for our employees and retirees. Their recommendation to convert the Medicare eligible retirees to Aetna Medicare Advantage this year, beginning January 1, 2018, has resulted in a reduction to city funding of $3,946,924. Group Alternatives has negotiated a 2019 renewal cost at a 9.2% decrease, which will yield a savings of $166,533. They also negotiated a renewal agreement with Blue Cross Blue Shield HMO for a 2.4% decrease or $258, 482. in annual savings for 2019. The Cigna OAP 2019 renewals comes with a 5 month administration credit of $123,965, a $100,000 Wellness Fund and the addition of new wellness programs, Cigna One Guide and Motivate M. There is no cost to the City and the programs are valued at approximately $50,000. There is also 100% prescription pass through.
The City has been able to negotiate significant plan design changes and has already launched a Wellness program they will result in additional cost savings as well as encourage employees to live a healthier life. The data analytics that Group Alternatives uses will continue to help us mitigate rising cost and plan for the future. Group Alternative has not increased their service fee since they have partnered with the City.
This is a 3 year contract, $43,400 for 2019 and $ 50,000 for 2020-2021.
Council approval is needed for professional services over $25,000.
The City Budget provides for this item in account 101-1220-602-0000-410-4599. Attached is the agreement for your reference.
IMPACT STATEMENT:
N/A
RECOMMENDATIONS:
That the City Council authorize renewal of a three (3) year agreement with Group Alternatives, Inc. to provide benefit consulting services.
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Authorizing an Agreement with Group Alternatives, Inc. to Provide Benefit Consulting Services For the Period of January 1, 2019 through December 31, 2021.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City of Aurora is in need of benefit consulting services; and
WHEREAS, the City desires to enter into a renewal contract with Group Alternatives, Inc. for consulting service related to benefits management; and
WHEREAS, the 2019 City Budget provides $43,500 for this item in account 101-1220-602-0000-410-4599
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that a renewal contract for year beginning January 1, 2019 through December 31, 2021 is hereby approved for the purpose of benefit consulting services.