TRANSMITTAL LETTER FOR BOARD MEETING OF JUNE 15, 2023
COMMITTEE ON PROCUREMENT
Mr. Brian A. Perkovich, Executive Director
Title
Issue purchase order and enter into an agreement with Benefitfocus.com for Employee Benefits Software, in an amount not to exceed $434,000.00, Accounts 101-25000-612430 and 101-27000-612820, Requisition 1601239 (As Revised)
Body
Dear Sir:
Authorization is requested to issue a purchase order and enter into an agreement with Benefitfocus.com for employee benefits software for three years. The purchase order will begin on July 8, 2023 and will expire July 7, 2026.
On July 12, 2018, the Board of Commissioners authorized the Director of Procurement and Materials Management to issue a purchase order and enter into an agreement with Benefitfocus.com (Benefitfocus) to provide a comprehensive employee benefits platform including an employee portal to the District’s employees for a five-year period in an amount not to exceed $490,000.00. The Benefitfocus portal went live on July 8, 2019. The current agreement with Benefitfocus will expire on July 7, 2023. Benefitfocus is a sole source provider of the Benefitfocus Marketplace platform.
The current contract with Benefitfocus is to provide a comprehensive employee benefits platform for the administration of employee benefits related to the active employee population. The scope of work includes a highly intuitive benefits portal allowing employees to select and manage their benefits via the web or a fully-functional mobile app; a communications portal with detailed information related to each benefit option; a suite of cost estimating and decision-support tools to assist employees in making benefits selections; an administrative portal allowing all benefits elections, changes, and employee acknowledgments to be processed electronically eliminating the need for paper enrollment forms; a robust set of standard reports to assist in monitoring enrollment and election changes; an end-to-end COBRA solution; and an Affordable Care Act reporting module to enable the production of required 1095-C tax forms. The scope of work also includes the administration and maintenance of data file exchanges between the Benefitfocus platform and the SAP system for demographic data and payroll deductions as well as between the Benefitfocus platform and the various insurance carrier systems.
The District has been evaluating the potential expansion of the scope of work to include the administration of health benefits for the retiree population. The retiree health benefits are currently administered through a combination of paper forms, manual data entry of enrollment changes, and electronic eligibility files exchanged with the insurance carriers. The inclusion of the retirees in the Benefitfocus portal would automate this administrative process, including the file exchange with the insurance carriers, providing a more effective and efficient process. It would eliminate the need for paper forms and manual entries mitigating the risk of data entry or other enrollment errors. It would also allow for more accurate reporting of health plan data across the entire District population, given that both active employees and retirees would reside in the same system. The 2023 budget included a project to expand the Benefitfocus platform for the administration of the retiree population.
After discovery related to the administration of the retiree population within the platform, the District requested that Benefitfocus provide a formal cost proposal for an expansion of the existing scope of work to include the retiree population. On May 16, 2023, Benefitfocus provided proposal options to the Human Resources Department.
Based on an evaluation of the capability of the platform to administer the retiree health benefits and the efficiencies and other benefits this would provide, the District is recommending the expansion of the platform to include the retiree population. The scope of work would be amended to include the same administrative functions currently provided for the active employee population. A project implementation plan would be developed by Benefitfocus and the District to add the necessary participant categories, benefits plans, insurance carrier data files, and payroll deduction files to the platform.
An analysis of the cost proposal options provided by Benefitfocus for the administration of both the active employee and retiree populations was conducted. The most favorable option based on cost and flexibility would be a three-year agreement beginning July 8, 2023 and ending July 7, 2026. This three-year agreement would eliminate the CPI escalation that is included in the current agreement by locking rates for the three-year period. The proposal also reduces the minimum participant counts to more accurately reflect the current employee headcount. Under this proposal, the average annual cost for the active population is projected to be $92,000.00 over the three-year period for a projected total cost of $276,000.00. The projected annual cost for the addition of the retiree population is $41,000.00 for a projected total of $123,000.00 over the three-year period. Implementation costs for the addition of the retiree population will be a one-time fee of $35,000.00. The total contract cost for the three-year period is projected to be $434,000.00. Funding for the implementation costs related to the addition of the retiree population is available in the 2023 budget.
In view of the foregoing, it is hereby recommended that the Board of Commissioners authorize the Director of Procurement and Materials Management to issue a purchase order and enter into an agreement with Benefitfocus. Funds for 2023 maintenance and implementation costs are available in Accounts 101-25000-612430 and 101-27000-612820. Funds for 2024, 2025, and 2026 will be requested in Account 101-27000-612820 and are contingent on the Board of Commissioners’ approval of the District’s budget for those years.
Requested, Thaddeus J. Kosowski, Acting Director of Human Resources, TJK:JEF
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Marcelino Garcia, Chairman, Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for June 15, 2023