Human Resources Department
www.santa-ana.org/human-resources
Item # 22
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 19, 2024
TOPIC: Affordable Care Act Compliance Services
AGENDA TITLE
Agreement with Sterling Health Services, Inc. for Affordable Care Act Compliance Services in an Amount Not to Exceed $50,000 (Non-General Fund)
RECOMMENDED ACTION
Authorize the City Manager to execute an agreement with Sterling Health Services, Inc. to provide Affordable Care Act compliance services for three years, effective November 19, 2024 through October 31, 2027, with provisions for two optional one-year extensions, not to exceed $10,000 per year (Agreement No. A-2024-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
The City maintains continued need for ongoing compliance with the Federal Patient Protection and Affordable Care Act (ACA). This agreement will provide the Human Resources Department with the necessary resources to efficiently meet the annual reporting requirement.
The ACA compliance service includes evaluating the City’s employee population for determining eligibility for mandated minimum essential coverage, electronically filing of Forms 1094-C and 1095-C with the Internal Revenue Service (IRS) information about the health care coverage offered to eligible employees, and printing and mailing of annual Federal Form 1095-C to eligible employees. Failure to meet this compliance requirement can result in penalties for the City.
Keenan, the City’s Benefits Broker, conducted a blind solicitation for proposals and received four vendor responses. The City selected Sterling Health Services based on its lowest responsible bid. The proposed agreement stipulates an annual fee of $3,000 and additional services of printing and mailing IRS forms at a cost per mailing. Total annual costs for the services will not exceed $10,000 per year.
Although this agreement falls within the City Manager's authority of $50,000, the City already has an existing contract with the vendor for other services. As a result, this
Affordable Care Act Compliance Services
November 19, 2024
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new contract would exceed the City Manager’s authority for this vendor and thus requires City Council approval.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
Funding for the Affordable Care Act compliance services is available in the Employee Group Insurance , Contract Services-Professional expenditure account (no. 08109053-62300) for FY 2024-25, and funding for subsequent fiscal years will be included in the proposed budgets for City Council consideration.
Fiscal Year Accounting
Unit –
Account No.
Fund, Account
Description
Amount
2024-25 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
2025-26 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
2026-27 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
2027-28 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
2028-29 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
Total $50,000.00
EXHIBIT(S)
1. Agreement with Sterling Health Services, Inc.
Submitted By: Lori Schnaider, Executive Director of Human Resources Approved By: Alvaro Nuñez, City Manager