Agenda Item

AGENDA STAFF REPORT

 

††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† ASR Control 19-000690

 

MEETING DATE:

07/16/19

legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

County Executive Office†† (Approved)

Department contact person(s):

Renee Catanzariti (714) 834-2564

 

 

Kellie Aumond (714) 834-2482

 

 

Subject: Amendment Number Two to Contract with Standard Insurance Company

 

††††† ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement to Form

Discussion

 

 

3 Votes Board Majority

 

 

 

††† Budgeted: Yes

Current Year Cost: $648,550

Annual Cost: FY 2020-21: $648,550

 

 

 

††† Staffing Impact:

No

# of Positions:

Sole Source: No

††† Current Fiscal Year Revenue: N/A

Funding Source: ISF 298: 100%

County Audit in last 3 years: No

 

 

††† Prior Board Action: 08/14/2018 #26; 11/10/2015 #34

 

RECOMMENDED ACTION(S):

 

Authorize the Chief Human Resource Officer, or designee, to execute Amendment Number Two to renew the Contract with Standard Insurance Company for Provision of Long-Term Disability Insurance and Administration of Short-Term Disability Insurance Plan and Reserve Deputy Sheriff Disability Income Protection Plan for a one-year period effective January 1, 2020, through December 31, 2020, estimated at $1,297,100.

 

 

 

 

SUMMARY:

 

Approval of Amendment Number Two to the Contract with Standard Insurance Company provides for continued administration of the Countyís self-funded Short-Term Disability Insurance Plan and Reserve Deputy Sheriff Disability Income Protection Plan and for the provision of Long-Term Disability Insurance as required under various Memorandums of Understanding.

 

 

 

 

BACKGROUND INFORMATION:

 

The County utilizes the services of a third party to administer the self-insured Short-Term Disability (STD) Plan for Administrative Management, Executive Management, Law Enforcement Management, Attorney and Craft and Plant Units (eligible employees) and the Reserve Deputy Sheriff Disability Income Protection Plan.

 

The County provides a STD Plan to eligible employees to help protect their income should an injury or illness keep them from working for an extended period of time. The plan provides eligible employees with up to 60 percent of covered earnings when they become disabled, with a maximum benefit period of 12 months. After the maximum benefit period, covered employees may also be eligible for Long-Term Disability (LTD) benefits. Should that occur, the Administrator would coordinate the transition of the STD claim to LTD.

 

The County is fully insured for LTD for eligible employees. The LTD insurance provides eligible employees with income protection if they have a disability that prevents them from performing their regular job duties upon exhausting their Short-Term Disability benefits.

 

The County provides a self-insured Disability Insurance Protection Plan to individuals appointed as Reserve Deputy Sheriffs if injuries, which are sustained while performing assigned duties as a Reserve Deputy Sheriff, result in a total or partial disability. Administration of this plan is only required if a claim is filed. One claim has been filed since inception of the plan.

 

Contract and Prior Board Actions

The current Contract with Standard Insurance Company (Standard) was awarded following a Request for Proposal solicitation. The Board approved execution of the Contract with Standard for the period January 1, 2016, through December 31, 2018, for an estimated amount of $902,700, with two additional one-year renewal periods.

 

On August 14, 2018, the Board approved Amendment One to renew the Contract with Standard for one additional year, from January 1, 2019 to December 31, 2019. Amendment One reflected a rate increase for LTD Insurance and changes in Payment Terms and Payment Invoicing Instructions, and Performance Guarantees, for an estimated amount of $918,000.

 

Approval is requested for Amendment Two to the Contract with Standard to renew the contract for the period January 1, 2020, through December 31, 2020, in the amount of $648,550. This is the final year of the Contract and prior to contract expiration, Human Resource Services (HRS) plans to issue a solicitation to continue services.

 

This contract does not currently include subcontractors or pass through to other providers. See Attachment C for Contract Summary Form.

 

The Contractor's performance has been confirmed as at least satisfactory. HRS has verified there are no concerns that must be addressed with respect to Contractor's ownership/name, litigation status or conflicts with County interests.

 

Performance Guarantees:

Included with the contract are Performance Guarantees (PGs), which set minimum standards for services provided under the Contract while also assisting the County in measuring the performance of Standard. The Contract includes 10 PGs measured on a yearly basis.

 

For calendar year 2017, Standard met or exceeded eight of the 10 PGs measurements, or 80 percent of the measures. For calendar year 2018, Standard met or exceeded nine of the 10 PG measurements, or 90 percent of the measures. PGs for Contract year 2019 are not yet available; however, HRS is satisfied with Standardís current performance. Total penalties for 2017 and 2018 are $1,200 and $600, respectively. The 2017 and 2018 PG results and explanations of unmet PGs are shown in Attachment D.

 

 

 

FINANCIAL IMPACT:

 

The estimated FY 2019-20 cost is $648,550 with $212,500 in LTD premiums, $20,750 in STD administrative fees and $415,300 in STD claims (January 1, 2020 - June 30, 2020).

 

The estimated annual (calendar year) 2020 cost for this action is $1,297,100. The estimated annual (calendar year) 2020 cost is $425,000 for LTD premiums. The estimated annual (calendar year) 2020 cost is $41,500 for STD administrative fees and $830,600 for STD claims. The actual amounts will vary based on enrollment and utilization.

 

This Contract is contingent upon funding by the County during the term of this Contract. If such funding is not approved, this Contract will be immediately terminated without penalty to the County.

 

Appropriations for this contract are included in the FY 2019-20 Budget and will be included in the budgeting process for the future fiscal year.

 

 

 

STAFFING IMPACT:

 

N/A

 

 

 

ATTACHMENT(S):

 

Attachment A - Standard Insurance Company Amendment Number Two
Attachment B - Redline Changes to Contract with Standard Insurance Company
Attachment C - Contract Summary Form
Attachment D - Standard Insurance Company Performance Guarantees for Calendar Year 2017 and 2018