Agenda Item 8AAGENDA ITEM 8A
JULY 23 2012
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM Insurance Broker of Record for City of Atlantic Beach
for Employee Benefits and PropertyCasualty Risk
Management Services
RFP No 12 02
SUBMITTED BY Susan Danhauser Human Resources Director
DATE June 22 2012
RE SUBMITED July 12 2012
REQUEST THAT RECOMMENDATION BE APPROVED AT JULY
23 2012 MEETING DUE TO TIME CONSTRAINTS FOR OBTAINING
QUOTES FOR UPCOMING PLAN YEAR OF
PROPERTYCASUALTY INSURANCES 100112
BACKGROUND RFP No 12 02 for insurance brokerage services was
completed by the City of Atlantic Beach Six firms responded The proposals
were evaluated and ranked by the committee on the following service related
criteria market knowledge access client knowledge depth and technical
knowledge of staff account management scope of services communication
performance and strategy The highest possible score was 82 Below is the
average score of each firm
1 Harden Associates 770
2 Gallagher Benefit Services 730
3 Brown Brown PRIA 690
4 Green Hazel 655
5 McKinley 650
6 Florida League of Cities 400
Presentations from the top two firms Harden Associates and Gallagher
Benefits Services were given to the committee and the City Manager on June 19
and June 20 2012 During these presentations insurance brokerage fees were
discussed with the firms The staff recommendation of Harden Associates was
based on their proposal score 770 and the fee schedule offered to the City
Attached is a letter of clarification from Mr Ceree Harden Chief Executive
Officer of Harden Associates regarding Mr Paul Harden
Using the projected premiums for the upcoming year the current broker
commission rates and the proposed fixed fee rate as basis in the calculation the
cost savings is in excess of 16000 per year Although other firms proposed
lower fees they were not comparable with Harden Associates for brokerage
services offered access to insurance pools depth of local staff and did not offer a
three year rate guarantee
1
AGENDA ITEM 8A
JULY 23 2012
The following is based on estimated premiums for upcoming plan year
Current Brokers Harden Assoc
Est Commission
Premium Rate Fixed Fee Savings
Medical 1056000 6 63360 48000 15360
P L 464000 10 46400 45000 1400
Total 109760 93000 16760
The use of a local firm is imperative to achieve the service level that is strongly
preferred Our employees often have questions or claim issues Having a local
staff readily available will enable the employees to have their issues resolved
quickly and with the least amount of frustration Additionally a local firm that is
accessible to the Human Resources department is vital to the administration of the
claims billings and resolution of issues Local and regional benchmarking
conducted by a firm with clients in the surrounding area is optimal
BUDGET Fee rate payment for brokerage service is recommended by the staff
The fee is guaranteed for three years and would not fluctuate due to increases in
premiums In 2014 healthcare reform will potentially increase the need for
additional brokerage services That coupled with the continued rising cost of
health and P L insurance the fee based payment for brokerage services will
eliminate the Citys exposure to any increase for the next three years The fee
rate is guaranteed and all services are included
Fee Rates for Top 2 Ranked Firms
Harden Gallagher
MedicalEmployee Benefits 48000 50000
P L 45000 46400
Guaranteed for 3 years
RECOMMENDATION Award a contract to Harden Associates to act as the
City of Atlantic Beachs Broker of Record for employee
benefits and propertycasualty risk management services
and authorize the City Manager to sign the contract to
include the above noted fee agreement
ATTACHMENTS 1 Proposal Scoring Sheet titled Combined Evaluation
Matrix RFP12 02 with rates noted Letter of
clarification from Mr Ceree Harden
2 Request for Proposal No 12 02 and Proposals are
available for review from City Clerk
REVIEWED BY CITY
MANAGER
2
Combined Evaluation Matrix RFP 12 02
Each brokerconsultant will be rated on the selection criteria listed below
Sample questions have been included as a guide in rating each criterion Points will
be totaled from all categories and compared against the maximum score of 82
Scoring 0 Unacceptable
2 Does not meet most expectations
4 Adequate
6 Good
8 Superior
Gallagher PRIA Florida
Harden Benefit Brown Greene McKinley League
Associates Services Brown Hazel Superior of Cities
Rating Criteria
A Market Knowledge 7 7 7 6 6 4
Does the broker understand the market dynamics for both the benefits and propertycasualty
Does the broker have market access to all necessary carriers
B Access 8 6 5 8 2 4
Is the brokers team geographically accessible to us
Does the broker have secure email for communication
C Client Knowledge 7 8 8 5 7 8
Does the broker understand municipalities
Can the broker benchmark our cases and benefits with like organizations
Do they have a thorough understanding of our goals objectives
D Depth of Staff 8 8 6 6 7 8
Does the broker have enough team depth and experience to handle our
accounts including claim resolution and employee issues
Can the broker shift resources if necessary to meet the nature of our account
Can the resources be available on site as needed
Open Enrollment Meetings Employee Meetings etc
E Technical Knowledge of Staff 8 8 8 75 7 8
Can the broker make us aware of changes in the marketplace that could impact our programs
Does the broker have technical expertise in risk management claims analysis health
management interpretation of coverage and overall insurance program structure Z
to manage our account
Does the broker have the expertise to assist in compliance issues
Does the broker have the technical competency to deal with industry changes
O
N
co
maUaghe PRIA Florida
Harden Benefit Brown Greene McKinley League
Associates Services Brown Hazel Superior of Cities
E Account Management 6 x 7 6 0
Does the broker have a specifically identified team of support staff
Do the team member have defined responsibilities
Does the model of account management meet our objectives
G Scope fServices 8 8 8 7 8 0
Can the broker provide the broad Iist of services
lnsurance program audit and review
Insurance program specifications
Verify all requested new and renewal policy terms
Claims advocacy and management meetings
Budget planning
Benchmarking
Health management competency
Periodic claims management meetings
onineeeahandcumpUanceou
Employee communication capabilities
cnmmunication o 7 6 7 7 0
Ability tnlisten
Response time to client issues
Proactive comrnunication on new developments
Explanation of technical materials
Quality of written documents communications
Scheduled regular meetings on risk management
Perfnmance s 7 6 6 7 2
Meet deadlines
I Effectively explained their program and services
Quality nfRnQ submission
Possess the financial stability to represent us
C
Jstrote@y 8 6 5 6 6 4
C
Was a strategy
Sub 75 71 67 655 63 38
i t
Preference isto select asinQrmcapabeufprovidin0asemicewopaneing Add 2 2 2 0 2 2 w
TOTAL U7773 69 655 40
Gallagher PRIA Florida
Harden Benefit Brown Greene 1 McKinley League
Associates Services Brown Hazel 1 Superior of Cities
I
Please Note Rates were considered from the top 2 firms when making this recommendation 1
11RateswerenotacriteriaintherankingsincetheRFPwasforbrokerageservicesnotarequestforbid
k
Commission Rates as a of total premium 1
Medical 1 4 6 3 6 1 40 1 3 not disclosed1
P L II 10 10 10 8 15 not disclosed not disclosed
Workers Comp 9 not disclosed
Fee
i
Medical j 48000 50000 1
P L and Workers Comp j 45000 46400
11 based on
j FY13 est
premiums
Note Florida League of Cities submitted an incomplete proposal therefore it was only reviewed by the HR Director
C
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AGENDA ITEM 8A
JULY 23 2012
HARDEN
July 12 2012
Mr Jim Hanson
City Manager
City of Atlantic Beach
800 Seminole Road
Atlantic Beach FL 32233
Re Clarification of Paul M Harden relationship RFP 12 02
Dear Mr Hanson
Thank you for considering our firm to support the insurance risk management and employee
benefits objectives of the City of Atlantic Beach
I understand there was some confusion with regard to the relationship of Paul M Harden to our
firm As we discussed Paul M Harden is neither an employee nor principal of our firm nor has
he ever served in such capacity For the record Paul M Harden is engaged in the practice of law
unaffiliated with Harden
I can assure you that Harden will serve dutifully as your advocate in all matters entrusted to us
and that we will appropriately avoid any conflicts of interest
Please do not hesitate to call if I can clarify or elaborate on any issues of concern to you or any
commissioner
Sincerely
M C Harden Ill
Chief Executive Officer
MCH cah
cc Susan Danhauser
Director of Human Resources
501 Riverside Avenue Suite 1000 Jacksonville FL 32202 9043543785 f 9046341302 hardeninsightcom