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Agenda Item
ASR
Control 13-001691 |
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MEETING DATE: |
01/28/14 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
All Districts |
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SUBMITTING
Agency/Department: |
Human Resource Services (Approved) |
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Department contact
person(s): |
Tracy Vonada 834-2081 |
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John Willard 834-2564 |
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Subject: Approve Contract with
ICMA-RC
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ceo Concur |
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Clerk of the Board |
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Concur |
Approved Agreement to Form |
Discussion |
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3 Votes Board Majority |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: N/A
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RECOMMENDED ACTION(S):
Authorize the Assistant Human Resources Officer/Employee Benefits or his designee to execute a contract with International City Management Association - Retirement Corporation (ICMA-RC) for administration of the Health Reimbursement Arrangement (HRA) program, effective April 1, 2014 through March 31, 2017, renewable for two additional one-year periods subject to approval requirements established by CEO/Procurement, as approved by the Board of Supervisors.
SUMMARY:
ICMA-RC was the selected vendor to provide administrative services for the HRA program through a Request for Proposal (RFP) process. Human Resource Services (HRS) requests the Board of Supervisors to authorize the Assistant Human Resources Officer/Employee Benefits or his designee to execute a contract with ICMA-RC to provide administrative services for the HRA program.
BACKGROUND INFORMATION:
The HRA program was established in 2007 for employees of the Association of Orange County Deputy Sheriffs (AOCDS). The HRA is a defined contribution health benefit that allows current AOCDS employees to create individual personal investment accounts to pay for health care expenses in retirement. Participants can chose from a wide variety of investment options and all contributions and investment earnings are tax-free when used for qualified health care expenses in retirement.
Presently, AOCDS employees contribute two-percent of biweekly base salary to the HRA program, while the County contributes three-percent of biweekly base salary. In 2009, the Association of County Law Enforcement Managers (ACLEM) was approved by the Board to participate in the HRA program. For ACLEM members, both the County and employees contribute one-percent of biweekly base salary to the HRA program.
To provide program oversight and direction, an HRA Advisory Committee (Committee) was created and meets on a quarterly basis. The Committee is comprised of AOCDS, ACLEM, CEO, and HRS staff. As of the quarter ended September 30, 2013, the HRA program had 2,482 participants with total assets of $53,062,190. The average participant balance was $21,379.
The County’s current HRA administrator is ICMA-RC. ICMA-RC’s contract expires on March 31, 2014 and in anticipation of the contract expiration, HRS issued RFP number 056-201304-BV on June 19, 2013.
Over 9,000 vendors were notified of the HRA RFP through the County’s BidSync system. 38 vendors viewed the RFP and 20 downloaded the documents. The RFP closed on July 22, 2013 and the County received two responsive proposals from the following vendors:
· ICMA-RC
· ING
RFP EVALUATION PROCESS:
An RFP evaluation committee was established and consisted of the HRA Advisory Committee representing AOCDS, ACLEM, CEO, and HRS/Employee Benefits. A County Deputy Purchasing Agent (DPA) was in attendance at all committee meetings to monitor the selection process.
The evaluation committee was charged with selecting a proposal that best meets the needs of the County based on the following criteria:
· Organization, staff qualifications, and experience
· Implementation capabilities, account management, and reporting
· Claims administration
· Investment services and trust administration
· Participant and client services
· Data and systems capabilities
· Performance guarantees and compliance with the County’s proposed model contract
· Proposed cost
The evaluation process consisted of two phases:
PHASE I:
The committee individually evaluated each proposal in accordance with the pre-determined criteria outlined above and independently scored each proposal. The members of the evaluation committee met to
discuss their individual observations, comments, and scores for each criteria in the proposals. The DPA documented the committee member’s scores and established a rank order for the proposals.
PHASE II:
Both vendors were requested to make an oral presentation to the evaluation committee. Following the oral presentations, the members of the evaluation committee completed the scoring process. See Exhibit I for the final scores for each proposal.
RFP SCORING:
The table below represents the collaborative scoring effort made by the committee and is the basis for HRS recommendation included in this ASR. Based on the evaluation results, ICMA-RC received the highest overall evaluation score as shown below.
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PROPOSER |
FINAL SCORE |
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ICMA-RC |
81.3 |
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ING |
69.9 |
Under the Scope of Services for this agreement, the chosen HRA administrator will assist the County in the management and administration of the HRA program, provide a diverse offering of investment options, monitor investment performance, and present timely reports and results to the County. For active employees, the HRA administrator will provide program management, responsive customer service, an on-site education plan, and a customize website with on-line tools and investment education for County participants. For retired participants, ICMA-RC will provide responsive customer service, claims processing, and timely payment of healthcare claims from participant accounts. ICMA-RC maintains individual participant accounts and ensures that all transactions and activities are in compliance with IRS regulations and the HRA Plan Document.
ICMA-RC has over 40 years of public sector experience serving over 4,800 defined contribution plans with over one-million plan participants and over $48 billion in assets under their administration. ICMA-RC is a U.S. based non-profit organization with a focus on building retirement security for the public sector.
ICMA-RC’s proposed contract contains a number of enhancements and pricing reductions from their current contract. The proposed contract has reductions in participant fees and includes $70,000 in administrative funding. The administrative funding will be held in a separate ICMA-RC account to provide funding for administrative costs the County incurs in overseeing and maintaining the program. ICMA-RC’s proposed contract also has a number of enhanced performance guarantees and customer satisfaction measures, including a quarterly account management report card and an account management satisfaction guarantee.
ICMA-RC’s proposed contract language is consistent with revisions previously approved by the Board regarding indemnification and insurance provisions and has been reviewed and approved by County Counsel and Risk Management.
FINANCIAL IMPACT:
There is no financial impact to the County in the administration of the HRA program. All HRA administrative fees are borne by plan participants.
ICMA-RC participant and asset fees as negotiated under this agreement are very competitive and represent a reduction in fees compared to their current HRA contract. The annual participant fees were reduced from $30 to $20 and will be assessed on a quarterly basis. The proposed asset based fees were also reduced from 30 basis points to 25 basis points (a basis point is 1/100th of one-percent). Based on the September 30, 2013 HRA data, ICMA-RC’s HRA asset based fee will lower annual program administrative expenses by $26,531 or approximately $10.69 per participant.
In addition to lower HRA participant fees and the asset based fee reduction, ICMA-RC has guaranteed their annual participant fees for three years with an option for the County to renew at the guaranteed rates for two additional one-year periods. ICMA-RC’s proposed contract contains $70,000 in administrative funding to reimburse the County for costs it incurs overseeing and maintaining the program.
A copy of ICMA-RC’s contract is on file in the office of the Clerk of the Board.
STAFFING IMPACT:
N/A
REVIEWING AGENCIES:
County Counsel
EXHIBIT(S):
Exhibit 1 - Final Scoring Sheets
ATTACHMENT(S):
Attachment 1 - Contract with ICMA-RC
Attachment 2 - Redline Model Contract to ICMA-RC Contract
Attachment 3 – Redline ICMA-RC Contract to Model Contract