TRANSMITTAL LETTER FOR BOARD MEETING OF SEPTEMBER 4, 2025
COMMITTEE ON PROCUREMENT
Mr. John P. Murray, Acting Executive Director
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Authorization to enter into an agreement for Contract 25-RFP-02 Health Plan Administrator, with Health Care Service Corporation, a Mutual Legal Reserve Company, operating through its Blue Cross and Blue Shield of Illinois Division, for a three-year period, effective January 1, 2026 to December 31, 2028, Account 101-25000-601250
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Dear Sir:
Authorization is requested to enter into an agreement with Health Care Service Corporation, a Mutual Legal Reserve Company, operating through its Blue Cross and Blue Shield of Illinois Division (BCBSIL), to provide a self-insured preferred provider organization (PPO), a health maintenance organization (HMO), and prescription drug coverage for its employees and non-Medicare eligible retirees.
On April 2, 2025, Request for Proposal 25-RFP-02 Health Plan Administrator was publicly advertised. The purpose of this contract was to select a qualified carrier to provide medical and prescription drug coverage for employees and non-Medicare eligible retirees. The program will include a preferred provider organization (PPO), a health maintenance organization (HMO) and prescription drug coverage. The plan design including the deductibles, co-insurance, prescription drug co-payment structure, and maximum out-of-pocket limits will remain the same as under the current program. These services are currently provided by BCBSIL. The current contract expires December 31, 2025.
On May 2, 2025, the District received three (3) responsive proposals. These proposals were submitted by Aetna Life Insurance Company, BCBSIL, and United HealthCare Services, Inc.
The proposals were evaluated by consultants from Deloitte Consulting, LLP and staff of the Human Resources and Procurement and Materials Management Departments. The criteria for the evaluation were outlined in Contract 25-RFP-02 and included: organizational stability; experience with group PPO, HMO, and prescriptions drug plans; experience with governmental health benefit programs; ability to match the current District plan design; network access, size, and quality; claims administration performance; member service performance; administrative performance; disease/condition management and wellness program resources; and financial considerations. In addition to these factors, the District considers the level of disruption employees and retirees might experience with providers and the drug formulary.
Following the preliminary evaluation of proposals, excluding cost, all three proposers were deemed to be finalists and were invited to interviews conducted June 30, 2025, and July 1, 2025. On July 22, 2025, a solicitation was sent to the finalists requesting an unqualified “best and final” offer. The “best and final” offers were returned to the Director of Procurement and Materials Management on July 30, 2025.
Based on the evaluation of the proposals using the criteria described above and the pricing provided in the “best and final” offers, it is recommended that a contract be awarded to BCBSIL. The BCBSIL PPO plan has an extensive network with the largest number of primary care physicians and hospitals in the marketplace. The plan includes 79% of providers, 73% of specialists, 86% of behavioral health providers and 99% of hospitals in the network. The breadth of the network has resulted in 99.3% of District PPO medical claims being paid at in-network rates saving both the participant and the plan on health care costs. BCBSIL continues to offer very competitive network discounts which are maximized by the high in-network utilization. PPO participants may also access care via a virtual visit with a provider using the telemedicine program.
The BCBSIL Blue Advantage HMO is the only capitated HMO in the Chicago market. The capitated payment model pays physicians on a per member basis to manage the member’s health rather than on a fee-for-service basis. This model incents providers to manage a member’s overall health and helps control plan costs. The HMO provides a very strong network with over 5,500 primary care physicians, 13,700 specialists, and 80 hospitals in the Chicagoland area. BCBSIL is the current administrator of the District’s PPO and HMO plans ensuring that participants would experience no provider disruption under the new contract.
The health plan offering will continue to provide a Wellbeing Management (Enable) platform that includes targeted outreach and clinical programs in areas such as high-risk maternity, behavioral health, social determinants of health, and oncology. The wellbeing program also offers digital health programs for hypertension, diabetes management, weight management, Metabolic Syndrome, and chronic musculoskeletal pain management. In addition, the plan will continue to include a wellness allowance which can be utilized for the administration of on-site health fairs, on-site flu shot events, and other wellness activities.
Prescription drug coverage under the BCBSIL plan is provided through its partner Prime Therapeutics, LLC (Prime). Prime is a national pharmacy benefits manager owned by 19 Blue Cross and Blue Shield plans and serves more than 40 million members, 4 million of those in Illinois. There would be no change to the existing pharmacy network. The proposed prescription drug plan would continue to include step therapy, quantity limit, and prior authorization programs. The District would maintain its current plan design and co-payment structure under the new contract.
The Diversity Section reviewed the request for proposal to determine if Affirmative Action Ordinance Revised Appendix A and Appendix V goals would apply. The Diversity Section noted that the services being solicited need to be performed by a single carrier, which will provide all products and services under the plan. As such, the contract does not provide practical opportunities for subcontracting. Therefore, Appendix A and the Appendix V were not included in this request for proposal.
In view of the foregoing, it is requested that the Director of Procurement and Materials Management be authorized to enter into an agreement with BCBSIL to provide a self-insured preferred provider organization (PPO), a health maintenance organization (HMO), and prescription drug coverage for its employees and non-Medicare eligible retirees for a three-year period from January 1, 2026 through December 31, 2028. Funds for 2026, 2027 and 2028 are contingent on the Board of Commissioners’ approval of the District’s budget for those years.
Requested, Thaddeus J. Kosowski, Director of Human Resources, TJK:JEF
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Precious Brady-Davis, Chairperson Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for September 4, 2025
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