HomeMy WebLinkAboutItem 06.kFebruary 1, 2012 0 4 a Item No.
Service Agreement between Financial Concepts, Inc.
and City of Lakeville
Proposed Action
Staff recommends adoption of the following motion: Move to approve Service
Agreement between Financial Concepts, Inc. and City of Lakeville.
Passage of this motion will approve Financial Concepts, Inc. as Broker of Record for the
health, life, and disability insurance plans.
Overview
Financial Concepts, Inc., (FCI) has been providing a service team to the City of
Lakeville dedicated to providing assistance relative to our employee benefit plans for
health, life and disability insurance. FCI assists with strategic planning, compliance,
renewal and employee communication.
FCI successfully assisted in the negotiation of our contract with Medica which reduced
the cost of health care for the City and our employees for 2012 and has the potential for
reducing our costs through 2014. Value added services include training, cobra
administration, medical claims analysis tools, employee access to the HRConnection
web site, and general compliance and regulatory support.
The attached service agreement will allow us to continue this relationship for the
calendar year.
Primary Issues to Consider
• Does this service agreement commit the City of Lakeville to working with FCI
for the duration of our contract with Medica?
Supporting Information
• Service Agreement between Financial Concepts, Inc. and the City of
Lakeville.
4
Human Res urces M
Financial Impact: $ $0 Budgeted: _N /A_ Source:
Related Documents (CIP, ERP, etc.):
Notes:
ANALYSIS OF PRIMARY ISSUES
Does this service agreement commit the City of Lakeville to working with FCI for
the duration of our contract with Medica?
FCI assisted the City in negotiating an agreement with Medica to provide a decrease in
rates for 2012 as well as rate cap guarantees for 2013 and 2014. Also included in the
agreement is a $50,000 wellness credit which will be used over the next few years to
encourage employees to complete health assessments and targeted coaching which
will ultimately lead to healthier life styles.
With a successful program, we can reduce the City's rate cap by up to 6% in 2014. In
addition, healthier life style changes will help reduce the overall claims and directly
impact our future rates.
Medica has given us the $50,000 up front; however, we will be required to repay a pro-
rated portion of the money if we withdraw from Medica prior to 2014. Since this
program has been brokered by FCI, and their expertise will assist us in completing a
successful program, staff recommends continuing to work with FCI. However, this
agreement only commits us to one year of service.
Benefits
F C remem
C o n c e p t s Investments
AN F ° COMPANY
eaain 763.450.1800 9655 Schmidt Lake Road
N111." 800.693.1175 Plymouth. Minnesota 55442
Pox 763.450.1801 1 www.fri- benefits.crm
Planning Beyond TomorroWl
January 24, 2012
Cindi Joosten
City of Lakeville
20195 Holyoke Ave.
Lakeville, MN 55044
Dear Cindi:
The following outlines the type of services Financial Concepts, Inc. (FCI) provides to City of Lakeville
relative to your employee benefit plans (health, life and disability) for the period of January 1, 2012 to
December 31, 2012.
Strategic Plan
Financial Concepts, Inc. provides financial consulting and support to assist City of Lakeville with
development of a strategic benefits plan, including:
• Perform separate analysis of each employee benefit plan to determine efficiency and integration.
• Review insurance plan designs and claims experience, as needed, for each benefit.
• Analyze competitiveness of plan positioning, taking into account plan design, employee choice, and
both employer and employee costs.
• Recommend plan design and financial funding alternatives based on analysis and strategic
objectives.
• Assist in preparation of budget projections.
• Work with City of Lakeville to establish a renewal strategy encompassing all the components of a
cost effective, high quality benefit plan for the upcoming, and future, benefit renewals.
Compliance
Financial Concepts, Inc. provides compliance services that are critical to managing your benefit plans,
including:
• Assist Human Resources staff with compliance related issues through training seminars,
newsletters and correspondence.
• Review industry, legislative and regulatory developments and consultative recommendations
relating to employee benefits.
• Provide consultation on employee relations issues, as needed.
• Grant access to FCI's online human resources library of explanations and analysis of laws, trends
and developments in benefits and related areas.
• Offer ten hours of legal services annually with an attorney named by FCI.
• Cobra administration provided by Optum Health Financial Services.
• Assist in resolving issues associated with the Flexible Spending Account, Health Reimbursement
Arrangement, and Health Savings Account provided by Genesis Employee Benefits.
Renewal and Plan Service
Financial Concepts, Inc. provides full carrier management services critical to the renewal process and
maintenance of your benefit plans. It is our understanding that the objective is to provide a high level
of benefits to City of Lakeville and to keep these benefits within current and future budgets. FCI
employs our proprietary benefits management process to help City of Lakeville anticipate cost
increases and proactively implement cost containment measures, including:
• Negotiate with each carrier on renewals.
• Manage the proposal process to ensure competitive programs and pricing.
• Recommend plan design alternatives to best manage costs and offer a competitive benefits
package for employees.
• Secure attractive financial alternatives.
• Negotiate rate guarantees and caps with the carriers, if available.
• Resolve escalated and non - standard carrier issues, including assistance with irreconcilable claims,
enrollment and billing concerns.
• Improve access to claims reporting through our Decision Master Report powered by Zywave once a
year, if needed.
Employee Communication
Financial Concepts, Inc. provides assistance to City of Lakeville in designing and delivering an
employee communications strategy that aligns with your strategic benefit initiatives. Deliverables may
include:
• Conduct/review employee surveys to provide objective and subjective feedback to management, if
applicable.
• Develop and continuously review effective communication methods to educate City of Lakeville
employees on their benefits package and the strategic benefit objectives.
• Conduct employee education meetings related to the City of Lakeville health & welfare benefits.
City of Lakeville Support
Financial Concepts, Inc. may require the assistance of City of Lakeville personnel, including:
• Management's input on City of Lakeville strategic benefit objectives — short -, mid- and long -term.
• Direction on management objectives related to the adoption of the various plans.
• Communications strategy input and support.
• Support in obtaining benefit plan claims data.
• Confidential census information for renewal purposes.
Service Agreement
Our compensation for all of these services is based on the amount received from the product vendors
throughout the contract period as part of the compensation that is built into the products. City of
Lakeville agrees that Financial Concepts, Inc. will remain the broker of record with all vendors for the
entire contract periods between City of Lakeville and said vendors. If for some reason, other than
Cause, Financial Concepts, Inc. is not the broker of record with the vendors, we agree to pay Financial
Concepts, Inc. for the balance of the compensation not yet received through the vendors for the
contract period.
Either party may terminate this agreement with 30 days advance written notice delivered to the party
with "Cause." Cause shall be defined as (i) the failure to perform any material term of this Agreement,
or (ii) material dishonesty in the performance of services under this Agreement.
The parties hereby acknowledge that the services described above, which are provided by Financial
Concepts, Inc. under the letter agreement, "do not relate to an employee benefit plan" in the context of
Section 514 of ERISA.
As a subsidiary of National Financial Partners Corp. ( "NFP "), we are a member of a financial services
network containing approximately 200 owned firms and approximately 300 affiliated firms. Firms within
the NFP network engage in one or more of its primary lines of business, which include corporate and
executive benefits and property and casualty insurance brokerage. Firms are compensated through
fee and commissions for services provided to clients in each of these lines of business. In addition to
the standard commissions received for the services provided to you, we or our affiliates may earn
additional compensation for our role in providing certain products and services to you under separate
contracts with insurance companies and group benefits providers. Insurance companies and group
benefits providers may pay us or our affiliate's contingent compensation upon satisfaction of factors
such as volume, persistency or profitability of the business placed with such insurance company or
group benefits provider. In addition, such product and service providers may pay us or our affiliates
fixed amounts related to the support of NFP company conferences, conventions and other marketing
efforts.
If the foregoing is in accordance with your understanding, please sign and return to us the duplicate
copy of this letter.
yours,
R. Sarych
Accepted By:
Date:
City of Lakeville agrees that Financial Concepts, Inc. will remain the Broker of Record and receive all compensation
for this contract between City of Lakeville & Medica for the contract period of January 1, 2012 through December
31, 2012.
City of Lakeville
Renewal Rate Verification Agreement
OA $30 -100%
Employee
$565.01
Employee + Spouse
$1,206.72
Employee + Child(ren)
$1,139.98
Family
$1,489.16
Select Choice
$30 -100%
MIC PP /ME/MES $30-100%1
PP
ME/MES
Employee
$508.51
Employee
$587.77
$528.99
Employee + Spouse
$1,086.07
Employee + Spouse
$1,255.32
$1,129.79
Employee + Child(ren)
$1,025.96
Employee + Child(ren)
$1,185.89
$1,067.30
Family
$1,340.26
Family
$1,549.14
$1,394.22
National One HRA
$2,000 -100%
MIC PP /ME/MES
HRA $2,000 -100%
Employee
$441.51
Employe
$459.28
$413.35
Emplo ee + Spouse
$942.95
Employee + Spouse
$980.91
$882.82
Employee + Child(ren)
$890.79
Employee + Child(ren)
$926.66
$833.99
Family
$1,163.65
Family
$1,210.49
$1,089.45
National One HSA
$2,400 -100%
MIC PP /ME /MES
HSA $2,400 -100%
Employee
$385.33
Employee
$400.86
$360.77
Employee + Spouse
$822.97
Employee + Spouse
$856.13
$770.52
Employee + Child(ren)
$777.44
Employee + Child(ren)
$808.78
$727.90
Family
$1,015.59
Family
$1,056.51
$950.86
City of Lakeville agrees that Financial Concepts, Inc. will remain the Broker of Record and receive all compensation
for this contract between City of Lakeville & Medica for the contract period of January 1, 2012 through December
31, 2012.
City of Lakeville
Renewal Rate Verification Agreement
Renewal Rate Verification Agreement
City of Lakeville agrees that Financial Concepts, Inc. will remain the Broker of Record and receive all compensation for this contract
between City of Lakeville & Standard for the contract period of January 1, 2012 through December 31, 2012.
City of Lakeville
Group Number(s):
Long Term Disability: 645003
Basic Life /AD &D & Basic Dependent Life: 645003
Voluntary Life /AD &D: 645003
Dependent Child(ren) Life: 645003
Insurance Type:
Long Term Disability, Basic Life /AD &D & Basic Dependent Life, Voluntary Life /AD &D, Dependent
Child(ren) Life
Insurance Carrier:
Standard
Renewal Date:
January 1, 2012
City of Lakeville agrees that Financial Concepts, Inc. will remain the Broker of Record and receive all compensation for this contract
between City of Lakeville & Standard for the contract period of January 1, 2012 through December 31, 2012.
City of Lakeville
Long Term Disability:
$0.23
$0.23
Basic Life /AD &D:
$0.125
$0.125
Basic Dependent Life:
$0.22
$0.22
Voluntary Life /AD &D:
Employee
Spouse
Employee
Spouse
<20:
$0.09
$0.075
$0.09
$0.075
20 -24:
$0.09
$0.075
$0.09
$0.075
25 -29:
$0.09
$0.075
$0.09
$0.075
30 -34:
$0.12
$0.081
$0.12
$0.081
35 -39:
$0.12
$0.102
$0.12
$0.102
40-44:
$0.13
$0.138
$0.13
$0.138
45-49:
$0.20
$0.219
$0.20
$0.219
50 -54:
$0.27
$0.322
$0.27
$0.322
55 -59:
$0.46
$0.508
$0.46
$0.508
60 -64:
$0.77
$0.787
$0.77
$0.787
65 -69:
$1.39
$1.544
$1.39
$1.544
70+
$2M
$2.648
$2.09
$2.648
AD &D:
$0.03
N/A
$0.03
N/A
Dependent Child(ren):
$0.44 for $5,000 / $0.66 for $10,000
$0.44 for $5,0001$0.66 for $10,000
City of Lakeville agrees that Financial Concepts, Inc. will remain the Broker of Record and receive all compensation for this contract
between City of Lakeville & Standard for the contract period of January 1, 2012 through December 31, 2012.
City of Lakeville