City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: FEBRUARY 8, 2022 FROM: HUMAN RESOURCES DEPARTMENT WARDS: ALL
SUBJECT: RFP NO 2108 FOR PROFESSIONAL SERVICES AGREEMENT WITH THE STANDARD INSURANCE COMPANY TO PROVIDE AN OPTIONAL CRITICAL ILLNESS INSURANCE PLAN TO CITY OF RIVERSIDE BENEFITED EMPLOYEES AND REVISIONS TO THE MASTER FRINGE BENEFITS AND SALARY PLAN TO ADD THE CRITICAL ILLNESS PLAN BENEFIT ISSUE:
Approval of the Professional Consultant Services Agreement with The Standard Insurance Company per RFP No. 2108. The fringe benefits will provide benefited employees with an optional voluntary employee-paid critical illness insurance plan. The contract term shall be effective April 1, 2022, through January 1, 2024, with the option to extend for two additional two-year terms, based on acceptable performance, fees and conditions of the agreement.
Additionally, the approval of revisions to the Master Fringe Benefits and Salary Plan to add the critical illness insurance plan.
RECOMMENDATIONS:
That the City Council:
Approve the Professional Consultant Services Agreement with The Standard Insurance Company to provide critical illness insurance to City employees for the term of April 1, 2022, through January 1, 2024, with the option to extend for two additional two-year renewals; Authorize the City Manager, or his designee, to execute the Agreement with The Standard Insurance Company, including making minor and non-substantive changes and contract extensions; and Adopt the attached Resolution amending the Master Fringe Benefits and Salary Plan attached hereto.
BACKGROUND:
In the interest of meeting employees’ optional insurance needs and expanding the City’s fringe benefit offerings, the Human Resources Department released a citywide interest survey to all City employees in April 2021, to gather feedback regarding employee health and wellness. The results indicated that critical illness insurance was the most desired voluntary supplemental insurance that employees found most valuable. Critical illness insurance pays the employee a direct lump sum benefit to cover various expenses if the covered employee or dependent is diagnosed with a major disease, illness, or condition such as cancer, cardiovascular conditions, and infectious diseases.
In June 2021, the Human Resources Department conducted a formal Request for Proposal (RFP) inviting highly qualified vendors that offer a voluntary group critical insurance plan for City employees and eligible dependents to compete in the process. Critical illness insurance will be a new benefit plan to employees. The plan is offered to all benefited City employees and eligible dependents as an optional benefit paid for entirely by the employee.
DISCUSSION:
The Purchasing Division released Request for Proposal (RFP) No. 2108 for Critical Illness Insurance on PlanetBids on June 28, 2021, to solicit proposals from qualified critical illness insurance providers. Services outlined in the request included coverage for the employee and eligible dependents, waiver of pre-existing conditions, customer support, the vendor to participate in on-site and virtual events and programs, communication and marketing materials, and program evaluation. The RFP closed on July 12, 2021, and a total of six proposals were received. Of the six, four proposals were deemed to be responsive. An evaluation committee was established which consisted of one (1) member of the Health and Benefits Committee, and three (3) staff members from the Human Resources Department. The evaluation committee reviewed all qualified proposals and based on the experience, qualifications, and cost evaluation provided by The Standard Insurance Company, it was determined by the selection committee that they were the most qualified provider of critical illness insurance for the City of Riverside. This plan is completely voluntary and enrollment in the plan will be available during the first 30 days that the plan is offered, perpetually during the first 30 days of employment for new hires, and annually during open enrollment for existing employees.
The Standard Insurance Company has over 70 years of insurance experience; they began providing critical illness insurance in 2015 and are currently providing critical illness coverage to 709 groups, with 100 being public entities. The company has provided life insurance and long-term disability plans to the City of Riverside since 2002. Coverage under the plan includes a variety of illnesses for employees’ and their eligible dependents in the form of a lump sum payment of up to $30,000 upon the diagnosis of a covered illness, regardless of treatment costs or what is covered by the employee’s medical insurance plan. The plan covers dependent children up to age 26 automatically at 50% of the employee’s benefit amount, a re-occurrence benefit of 100% after six months, and offers a $100 per year health maintenance screening benefit paid as an annual benefit when the insured member receives one of the twenty-two covered health screening tests. Employees can submit claims, interface with a claims examiner, and access plan certificates and services easily and confidentially through The Standard’s dedicated member portal.
The initial contract term will be through January 1, 2024, with the option to extend for two additional two-year terms, based on acceptable performance, fees, and conditions of the agreement.
Purchasing Manager concurs that the recommendation is in accordance with Purchasing Resolution 23812.
STRATEGIC PLAN ALIGNMENT:
This council item contributes to Strategic Priority 5 – High Performing Government and specifically, Goal 5.1. – Attract, develop, engage and retain a diverse and highly skilled workforce across the entire City organization.
This item aligns with each of the Cross-Cutting Threads as follows:
Community Trust – This selection was made in the partnership with the City’s Purchasing Division utilizing a formal, RFP competitive bid process. The decision to select The Standard Insurance Company was based on sound policy and a consensus of the selection committee which included a member of the Human Resources Benefits Committee and Human Resources staff.
Equity – All required steps were taken to ensure a fair and equitable process was in place during the release of the RFP and evaluation of the proposals. The award was granted to the highest scoring proposal based on qualifications, experience, and plan offerings.
Fiscal Responsibility – The decision to select The Standard Insurance Company was made with fiscal responsibility in mind. Aside from being the most qualified vendor, The Standard was the vendor with the lowest rates. Not only will offering a critical illness insurance plan with The Standard Insurance Company be at zero cost to the City, the proposal included an 8% reduction to the current life insurance rates as well.
Innovation – Group critical illness coverage allows the City to affordably enhance our benefits offerings to help attract and retain employees. This additional benefit offering provides added protection and financial confidence that new and existing employees seek.
Sustainability & Resiliency – Adding critical illness insurance to the City’s employee benefit package is an innovative and cost-effective way to meet the needs of employees during a time of unprecedented events. Although health, life, and disability insurance are essential, critical illness insurance provides additional financial support so that employees can focus on getting well and getting back to work.
FISCAL IMPACT:
There is no fiscal impact associated with this report as plan premiums are fully paid by the employee who choose to participate in the plan.
Prepared by: Rene Goldman, Human Resources Director
Certified as to
availability of funds: Edward Enriquez, Chief Financial Officer/Treasurer Approved by: Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
Professional Consultant Services Agreement with The Standard Insurance Company Resolution Amending the Fringe Benefits and Salary Plan Critical Illness Insurance ● Page 2