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Agenda Item
ASR
Control 15-001494 |
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MEETING DATE: |
11/17/15 |
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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): |
Renee Catanzariti (714) 834-2564 |
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Barbara Voelkel (714) 834-5376 |
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Subject: Amend Contract with Xerox HR
Solutions, LLC
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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: No |
Current Year Cost:
$79,815 |
Annual Cost:
See Financial Impact Section |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
No |
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Current Fiscal Year Revenue: $79,815
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Prior Board Action: 7/26/2013
#25, 3/10/2009 #27, 12/9/2008 #40 |
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RECOMMENDED ACTION(S):
Authorize the Chief Human Resources Officer or designee to execute Amendment No. 4 to the Contract with Xerox HR Solutions, LLC to add terms to the Contract scope of work and compensation sections for tasks and fees relating to the Affordable Care Act reporting requirements under Internal Revenue Code Section 6055 and 6056, at an estimated annual cost of $79,815, effective upon Board approval.
SUMMARY:
Authorizing the Chief Human Resources Officer or designee to execute Amendment No. 4 to the Contract with Xerox HR Solutions, LLC will allow completion of Affordable Care Act reporting requirements under Internal Revenue Code Sections 6055 and 6056.
BACKGROUND INFORMATION:
The County currently contracts with Xerox HR Solutions to provide day to day administrative services for all health and welfare benefit programs offered to active employees and County retirees. The current Contract term is through December 31, 2016. Employee Benefits is satisfied with Xerox’s performance.
As part of the federal Affordable Care Act (ACA) Employer Shared Responsibility the County is required under Internal Revenue Code Sections 6055 and 6056 (see Attachment D) to report to the Internal Revenue Service (IRS): a) offers of health plan coverage by month for each full-time employees (defined as employees averaging 30 hours/week or 1560 hours/year); and b) actual monthly coverage of all employees, retirees, dependents and COBRA participants enrolled in the County’s self-funded PPO health plans and Health Reimbursement Arrangement. The County is also required to provide a Form 1095 to each individual. The forms will contain the information transmitted to the IRS and must be distributed by January 31, 2016. The files must be electronically submitted to the IRS by March 31, 2016.
Human Resource Services/Employee Benefits with the assistance of Auditor-Controller staff evaluated options to meet these new reporting requirements. It has been determined that the current HR/CAPS+ system is not a viable option for 2016 reporting. The detailed health plan enrollment data does not currently reside in HR/CAPS+ system, and the system modification to support reporting is not yet available.
As the holder of health plan eligibility and enrollment information for the County, Xerox HR Solutions already has access to the required health plan data. Xerox HR Solutions also has the systems capability to perform the necessary computations to determine federal full-time employee status. Xerox HR Solutions is performing these tasks for other clients and can support the County in complying with the ACA reporting requirements until the HR/CAPS+ system can fully support it and is determined to be a more cost effective method of reporting.
These reporting services are not currently part of the scope of work for the Contract with Xerox HR Solutions for Total Self-Service Benefits Administration, and the specific payment method is not defined in the Contract.
Human Resource Services requests approval of Amendment No. 4 to the Contract to amend the Contract to add the new ACA reporting services to the scope of work and to define the payment terms. The actual cost of the services will be based on the number of participants who are issued statements and number of files transmitted to the IRS. Based on current enrollment, the annual cost is estimated to be $79,815. In addition, Xerox has agreed to an additional Performance Standard that is specific to these services and is willing to risk 2% of the total cost of these services to ensure the County’s obligations are met.
This Contract includes subcontractors. See Attachment C for information regarding subcontractors and the Contract Summary Form.
On July 26, 2013, the Board approved Amendment No. 3 to renew the Contract with Xerox HR Solutions, LLC for total benefits self-service administration for the period January 1, 2015 through December 31, 2016.
Amendment No. 1 was issued to change the contractor's name from ACS HR Solutions, LLC to Xerox HR Solutions, LLC effective June 1, 2012. No Board action was required.
On March 10, 2009, the Board approved the Contract with ACS HR Solutions LLC for total benefits self-service administration for the period April 1, 2009 through December 31, 2014, renewable for two additional one year periods.
On December 9, 2008, the Board authorized selection of ACS HR Solutions for total benefits self-service administration and authorized negotiation of the agreement for Board approval.
FINANCIAL IMPACT:
The estimated annual cost for ACA reporting under this amendment is $79,815. A budget adjustment requesting additional appropriation and revenue to implement IRS reporting and various other aspects of the ACA is included in the First Quarter Budget Adjustment Request. The cost for this amendment is included in that budget adjustment request and will be offset by benefits administration revenue from the County departments, Courts and Special Districts.
This expense is estimated to be $79,815 annually, payable in the first quarter of each calendar year. Appropriation and revenue for ongoing services will be included in the budgeting process for FY 2016-17.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A – Amendment No. 4 with Xerox HR Solutions,
LLC
Attachment B – Redline Contract with Xerox HR Solutions, LLC
Attachment C – Contract Summary Form
Attachment D - IRC Sections 6055 and 6056