HomeMy WebLinkAboutA020 - Resolution approving contract renewal with Gallagher Benefit Services for health benefit brokerage, consulting and acturial services for July 1, 2026 - June 30, 2027ITEM #:23
DATE:05-26-26
DEPT:HR
SUBJECT:
HEALTH BENEFITS BROKERAGE, CONSULTING, AND ACTUARIAL
VALUATION SERVICES CONTRACT RENEWAL
COUNCIL ACTION FORM
BACKGROUND:
The City provides health benefits to full-time and regular part-time employees including
medical insurance with prescription drug coverage, dental insurance, life and accidental
death/dismemberment (AD&D) insurance, disability insurance, prescription drug coverage,
flex spending, an employee wellness plan, and optional vision coverage. The medical and
prescription drug plans are administered by Wellmark/Blue Cross of Iowa. The dental and
vision plans are administered by Delta Dental of Iowa, and the flex spending plan is
administered by TASC. Life/AD&D and disability insurance is provided by National Insurance
Services.
The City has three group benefit plans including Wellmark’s Classic Blue (indemnity plan that
is closed to new enrollments), Alliance Select (PPO plan), and Blue Advantage (HMO plan).
These plans are “non-grandfathered medical plans” under the Patient Protection and
Affordable Care Act (ACA). As permitted by the ACA, a non-grandfathered medical plan can
make changes to certain aspects of the plan, including employee contributions, as long as
they meet the minimum requirement under ACA regulations, such as 100% covered
preventive services and not exceeding the maximum out of pocket expenses for extenuating
services.
The ACA regulations include significant compliance requirements, and the complexity of
analyzing and valuing proposed plan changes is not something City staff is equipped to
address without the assistance of contracted, qualified professionals. Along with this type of
service, professional assistance is necessary to broker best in class offers for insurance
coverage and other benefits, including the continued actuarial valuation services.
On March 9, 2023, the City issued a Request for Proposals (RFP) for health benefits
brokerage, consulting and actuarial valuation services for the self-funded health plan. After an
extensive process, the City awarded a one-year contract to Gallagher Benefit Services,
Inc., with an option to renew for four additional one-year periods. The second renewal
term expires on June 30, 2026. Gallagher's rate for the third of the four renewal periods
(July 2026 - June 2027) is $59,000. The adopted FY 2026/27 Budget contains $59,145 for
these services.
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ALTERNATIVES:
1. Approve a renewal of the contract with Gallagher for health benefits brokerage,
consulting, and actuarial valuation services for the period of July 1, 2026 through June
30, 2027.
2. Direct staff to conduct a new RFP for these services.
CITY MANAGER'S RECOMMENDED ACTION:
Gallagher has an extensive record of providing benefits brokerage, consulting, and
actuarial services to city government and public organizations throughout Iowa.
Utilizing Gallagher ’s services will continue to assist with the administration of City self-
funded health and life/disability benefits by providing actuarial analysis, evaluating,
and supporting compliance, and analyzing cost saving approaches. Renewing this
contract will provide the best value to the City by providing independent professional
assistance in administering the City's health insurance plan. Therefore, it is the
recommendation of the City Manager that the City Council adopt Alternative No. 1 as
described above.
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