HomeMy WebLinkAboutItem 09 - Group Health BenefitsMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER
MEETING DATE: JUNE 1, 2021
SUBJECT: APPROVAL OF A CONTRACT FOR INSURANCE CONSULTANT
SERVICES FOR GROUP HEALTH BENEFITS
RECOMMENDATION: City Council to consider the approval of a three-year contract for
insurance consultant services for group health benefits with McGriff
Insurance Services, Inc. for the Risk Management Department.
FUNDING SOURCE: Funds are available in the General Fund (Risk Management) for an
amount not to exceed $50,000.
BACKGROUND: The consultant assists with insurance placement for medical, dental,
vision, life, disability, and stop -loss insurance coverages. The consultant
also ensures that benefit designs are consistent with the strategic
benchmarks, provides compliance tools and legislative information, and
provides data analysis on plans and performance. McGriff has provided
these services to the City in the past with successful results and they
agree to a renewal with no increase in fees.
This procurement will be made in accordance with Local Government
Code Chapter 252, Subchapter B, § 252.022. General Exemptions (a) (4),
professional services.
Staff recommends approval.
MH/LW
r McGriff
5080 Spectrum Drive, Suite 900E, Addison, Texas 75001 (469) 232-2100 Fax (469) 232-2101
Brokerage Service Agreement
THIS BROKERAGE SERVICE AGREEMENT (this "Agreement") is between MCGRIFF
INSURANCE SERVICES, INC. ("MCGRIFF") and CITY OF GRAPEVINE (the "Client").
The Client and MCGRIFF agree as follows:
1. Client appoints MCGRIFF as the Client's insurance broker of record in order to solicit, negotiate
and service insurance policies for the Client for the coverages described on Exhibit A hereto
(Insurance Placement). Client also desires for MCGRIFF to provide the employee benefits
consulting services described on Exhibit B hereto (Employee Benefits Consulting Services).
Both Exhibit A and B are attached to and made a part of this Agreement.
2. The Client will provide MCGRIFF with all information necessary to enable MCGRIFF to
provide Insurance Placement and Employee Benefits Consulting Services.
3. MCGRIFF agrees to perform the services described in this Agreement in a professional and
timely manner.
4. The parties agree and understand the Client is not under any legal or other obligation to
purchase any insurance product through MCGRIFF in its capacity as either a producer or
consultant, and that the purchase of any insurance product or employee benefits consulting
services is purely voluntary by the Client.
5. Remuneration:
A. The Client will pay MCGRIFF a fee in the amount of $50.000 (the "Fee") annually for
Insurance Placement and Employee Benefits Consulting Services. The Fee may be
refundable, in whole or in part, in accordance with Section 10 of this Agreement.
B. The Fee will be payable upon receipt of an annual invoice by the Client.
C. If MCGRIFF receives commission (including Tier II commissions) from one or more
insurance companies and/or intermediaries for the placement of insurance policies for
the coverages described on Exhibit A (a "Commission"), the Fee will be reduced by the
amount of such Commission. Final adjustments to the Fee amount will be made by
MCGRIFF after the determination and receipt by MCGRIFF of all Commissions, net of
any adjustments pursuant to any audit, endorsement, accounting reconciliation or other
applicable business process.
1/12/2017 Edition
Confidential
Benefits Type I BSA
D. The Client acknowledges that:
i. receipt of such Commission constitutes remuneration of MCGRIFF for placement
of the applicable insurance policies;
ii. the remaining Fee does not include remuneration of MCGRIFF for placement of
the insurance policies for which MCGRIFF receives Commission; and
iii. the remaining Fee is separate from and in addition to any such Commission.
E. With respect to Insurance Placements and/or Employee Benefits Consulting Services
undertaken on behalf of the Client that are not contemplated by this Agreement, MCGRIFF
may be compensated pursuant to a separate Broker Service Agreement or by the insurance
companies and/or intermediaries utilized in such Insurance Placements. MCGRIFF will
make information regarding such Agreements and compensation available to the Client
upon request.
6. With respect to any insurance placement or employee benefits consulting services for which
MCGRIFF's compensation is fee -based in whole or part, MCGRIFF will not execute or accept
any monetary compensation pursuant to any (1) market service agreement, (2) placement
service agreement, or (3) agreement providing for any bonus, override or contingency that
would be received from any type of intermediary or insurance company. Further, MCGRIFF
will instruct all insurance companies to exclude insurance policies from any contingency
agreements, bonuses and overrides if MCGRIFF receives a fee for placement of such policies.
This does not preclude MCGRIFF from accepting non -monetary awards, including trips and
other prizes, which MCGRIFF believes are important for professional and business
development.
7. MCGRIFF reserves the right to engage its related affiliates and subsidiaries in connection with
the execution of Brokerage Services Agreements. Use of these business partners and service
providers could result in the accrual of additional income to MCGRIFF-related subsidiaries and
affiliates.
8. This Agreement and the respective rights and obligations of the parties hereto shall be
construed in accordance with and governed by the laws of the state of TEXAS. To obtain
information on how to file a complaint regarding fees, Contact the Texas Department of
Insurance at 1-800-252-3439.
9. This Agreement commences on 6/1/2021 and ends on 5/31/2024 . Either parry may
terminate this Agreement upon 30 days advance written notice to the other parry.
10. Unless otherwise prohibited by law or regulation, should this Agreement be terminated by the
Client in accordance with Section 9, the Fee will be deemed earned as follows:
i. 50% of the Fee deemed earned as of the Commencement Date;
ii. 75% of the Fee deemed earned five months after the Commencement Date;
1/12/2017 Edition 2
Confidential
Benefits Type I BSA
iii. 100% of the Fee deemed earned nine months or greater after the Commencement
Date.
IN WITNESS WHEREOF, the Client and MCGRIFF have executed this Agreement.
MCGRIFF INSURANCE SERVICES, INC. CITY OF GRAPEVINE, TEXAS
Lo
Name: Johnny Fontenot Name:
Title: Executive Vice President Title:
Manager's Initial:
1/12/2017 Edition 3
Confidential
Benefits Type I BSA
EXHIBIT A
The Client has requested Insurance Placement for the following lines of coverage.
Medical & Pharmacy
Dental
Vision
Group Life/AD&D
Long Term Disability
Stop Loss
1/12/2017 Edition
Confidential
Benefits Type I BSA
EXHIBIT B
MCGRIFF will provide the following Employee Benefits Consulting Services for the Client:
A. Strategic Benefit Planning. Provide assistance in developing overall plan benchmarks and
targets to ensure that the plan meets the objectives of Client and its employees.
B. Benefit Design. Help to ensure that benefit designs are consistent with the strategic benchmarks
and targets set forth in the strategic benefit planning process.
C. Administration. Identify core administrative services, assess vendor performance, and manage
vendor relationships to provide appropriate program administration.
D. Funding. Provide counsel regarding program funding alternatives, including reviewing fee
proposals and recommending budget rates, employee contribution rates, and COBRA rates.
E. Vendor Selection. Upon client request, MCGRIFF will prepare Request(s) for Proposal (RFP),
analyze RFP's and prepare a summary report outlining responses. Vendors include, but are not
limited to:
• Voluntary Worksite Programs
• Wellness and Disease Management Programs
• Third Party Claims Administration
• Utilization Review Programs
• IRS Code Selection 125 Programs
• Preferred Provider Network Plans
• Online Enrollment Services
• Communication Services
• Health Savings Account Services
F. Communication. Assist in drafting employee communications regarding benefit program
performance and changes, and assist in the review of plan documents and insurance certificates
during the planning and enrollment process.
G. Compliance Tools & Legislative Information. Provide informational materials on legislative
developments impacting Employee Benefit Management plans, including access to online
reference tools on topics such as FMLA, COBRA, HIPAA, HIPAA Privacy, and Section 125.
1/12/2017 Edition 5
Confidential
Benefits Type I BSA
H. Meetings with Client and Vendors. Services will include attendance at and facilitation of the
following meetings with Client and vendors to facilitate program management including day-to-
day operations and planning program changes:
Meet with Client on a quarterly basis to review all activities performed by MCGRIFF during
the prior quarter. The meetings will include discussion of business concerns, including
presentations of options and recommendations.
Upon Client request, MCGRIFF shall meet with Client semi-annually to discuss review of
the program, state of the marketplace, progress made toward strategic plan, and
developments within Clients organization.
• Meet with Client annually to review the stewardship report for the preceding year, create a
stewardship report outlining the goals and objectives for the upcoming year, and agree upon
MCGRIFF's fees for the next twelve month period.
I. Stewardship Report. Will develop and implement a detailed account stewardship plan, which
should include, but not be limited to, the following:
• Specific quantifiable and measurable goals and objectives relating to Client's programs; and
Detailed work plans which lay out the account management plan, work schedules, areas of
concentration, timing, and information requirements.
J. Data Analysis. Provide Client with summary comparisons and work with Client and TPA to
secure additional reports as needed for claims analysis.
1/12/2017 Edition 6
Confidential
Benefits Type I BSA
EXHIBIT C
MCGRIFF will receive commission on the following lines of coverage. These particular lines of
coverage are not subject to the fee for insurance placement included in this BSA.
Voluntary Short Term Disability
Voluntary Life/AD&D
Voluntary Critical Illness
Voluntary Accident
1/12/2017 Edition 7
Confidential
Benefits Type I BSA