HomeMy WebLinkAboutResolution - 2018-R0143 - Marsh & Mclennan Agency - 04/26/2018Resolution No. 2018-RO 143
Item No. 6.18
April 26, 2018
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to
execute for and on behalf of the City of Lubbock, a Professional Services Agreement for
health benefits brokerage and consulting services, by and between the City of Lubbock and
Marsh & McLennan Agency LLC, and related documents. Said Agreement is attached
hereto and incorporated in this resolution as if fully set forth herein and shall be included
in the minutes of the City Council.
Passed by the City Council on April 26, 2018
DANIEL M. POPE, MAYOR
ATTEST:
Rebe (aGarza, City Secretary
APPRO ED AS TO eONTENT:
Leisa Hutcheson
Director of Human Resources & Risk Management
C . , First Assistant City Attorney
RES.Agrmt-MMA LLC. [services]
04.05.2018
MARSH & MCLENNAN
AGENCY
APRIL 5, 2018
CITY OF LUBBOCK
SERVICES AND
CONSULTING AGREEMENT
Abilene• Austin • Dallas • Fort Worth • Houston • Lubbock • Midland I MarshMMASW.com
CONTENTS
Agreement 3
Exhibit A: Scope of Services 7
Exhibit B: Employee Benefits Coverage Types 10
Exhibit C: Service Fees 11
Exhibit D: Compensation Disclosure and Limit of Liability 12
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WORLD CLASS. LOCAL TOUCH.
Agreement
This Consulting and Confidentiality Agreement, hereinafter referred to as "Agreement" is between
City of Lubbock, hereinafter referred to as "Client" and Marsh & McLennan Agency LLC, hereinafter
referred to as "MMA or Consultant."
WHEREAS, the parties wish to set forth their respective expectations;
Now, therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby
mutually acknowledged, the parties hereby agree as follows:
1. SCOPE OF SERVICES TO BE PROVIDED BY CONSULTANT
Consultant shall provide Client with consulting and brokerage services for the Scope of Services
listed in Exhibit A and for the benefit programs listed in Exhibit B.
2. DISCLOSURE, INTERMEDIARIES AND RECORD KEEPING
A. Full Disclosure/Intermediaries. Client has the right to approve or disapprove any
arrangements and/or the utilization of any intermediaries in connection with, or arising out of, or in
any way related to Client's employee benefit program. Consultant must seek approval from
Client prior to the use of any of the above in connection with the Client's insurance programs.
B. Record Keeping. Consultant shall maintain accurate and current files including, but not limited
to, insurance policies and correspondence with insurers in accordance with industry standard
record retention practices or as otherwise directed by Client.
3. TERM & TERMINATION
A. Term. This initial term of this Agreement shall be for five (5) years, commencing on June 1,
2018 ("Initial Term") and may be extended for up to four (4) additional one year terms with
advanced mutual written agreement. Thereafter, this Agreement shall remain in effect until
terminated as described below. In the event such termination is effective, Client shall be
responsible to Consultant for any services performed prior to the date of termination and
Consultant shall be responsible to Client to continue to provide services in connection with the
Scope of Services listed in Exhibit A.
B. Termination. This Agreement may be terminated by either party only as follows:
a) Effective upon thirty (30) days advance written notice to the other party stating that such other
party is in breach of any of the provisions of this Agreement, provided such breach (if able to
be cured) is not cured within fifteen (15) days after the notice is received;
b) Effective upon sixty (60) days advance written notice to the other party given with or without
reason; provided such notice is given after the Initial Term; or
c) By mutual written agreement of the parties.
4. COST OF SERVICES
The determination of the fee level is based upon several factors — a) the size and characteristics of
the group, b) where the group's facilities are located, c) the capacity and resource needs of the
Human Resources staff, d) specific services to be delivered e) the extent of vendor interaction and
support required.
A. Annual Compensation.
WORLD CLASS. LOCAL TOUCH.
MMA agrees to provide the Services outlined in Exhibit A (Scope of Services) for the fees outlined
in the Exhibit C (Services Fees).
B. Out -of -Scope Services.
In the event that additional services are requested by Client, which fall outside the Scope of
Services described in Exhibit A, MMA reserves the right to evaluate services and fees and if
necessary shall contact Client to discuss a mutually -agreed cost for completion of the additional
services. A written description of these additional services and the agreed -upon compensation
shall be provided each time as an addendum to this Agreement which addenda are authorized to
be executed by the City Manager.
C. Compensation Disclosure.
Please see Exhibit D for MMA's Standard Compensation Disclosure which may be updated from
time to time.
5. PERSONNEL
Consultant shall assign its personnel as requested by the Client and according to the disciplines
required to complete the appointed task in a professional manner. Consultant retains the right to
substitute personnel with reasonable cause.
6. CLIENT SHALL BE RESPONSIBLE FOR FINAL APPROVAL OF ALL COMMUNICATION
MATERIALS.
7. CONFIDENTIALITY
Consultant agrees that all non-public information communicated to Consultant by Client with respect
to Client's ongoing business operations is Confidential, whether that information was directly or
indirectly communicated, and whether the information was otherwise obtained by Consultant or its
staff. Consultant agrees that it shall not disclose any Confidential Information to any other person
unless specifically authorized by Client. Confidential information shall not be deemed to include any
information that: (a) was already lawfully known to Consultant at the time of disclosure by Client as
reflected in written records of the Consultant; (b) was or has been disclosed by Client to a third party
without obligation of confidence; (c) was or becomes lawfully known to the general public without
breach of this Agreement; (d) is independently developed by Consultant without access to, or use of,
the Confidential Information; (e) is approved in writing by Client for disclosure by the Consultant; or (f)
is required to be disclosed by law or by the order of a court or similar judicial or administrative body,
however, Consultant shall notify Client of such requirement promptly and shall cooperate reasonably
with Client, at Client's expense, in obtaining a protective or similar order with regard thereto. If an
authorized representative of Client gives Consultant written authorization to make disclosures,
Consultant shall do so only within the limits and to the extent of that authorization. Consultant shall
use its best efforts to prevent inadvertent disclosure of Confidential Information to any third party and
shall be guided by the parameters of the privacy language of The Health Insurance Portability and
Accountability Act (HIPAA) as may be amended from time to time. Consultant shall instruct its staff to
treat Confidential Information with the same care and discretion that they use with similar data
designated by Consultant as Confidential. Consultant agrees that all of Consultant's obligations with
respect to Confidential Information shall survive the termination of this Agreement and any
relationship with Client for a period of three years.
8. INDEPENDENT CONTRACTOR
It is understood and agreed that Consultant is engaged by Client to perform services under this
Agreement as an independent contractor. Consultant shall use its best efforts to follow written, oral,
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WORLD CLASS. LOCALTOUCH.
or electronically transmitted (i.e., sent via facsimile or e-mail) instructions from Client as to policy and
procedure.
9. FIDUCIARY RESPONSIBILITY
Client acknowledges that: (i) Consultant shall have no discretionary authority or discretionary control
respecting the management of any of the employee benefit plans; (ii) Consultant shall exercise no
authority or control with respect to management or disposition of the assets of Client's employee
benefit plans; and (iii) Consultant shall perform services pursuant to this Agreement in a non -fiduciary
capacity. Client agrees to notify Consultant as soon as reasonably possible of any proposed
amendments to the plans' legal documents to the extent that the amendments would affect
Consultant in the performance of its obligations under this Agreement. Client agrees to submit (or
cause its agent, consultants, or vendors to submit) all information in its (or their) control reasonably
necessary for Consultant to perform the services covered by this Agreement.
10. HOLD HARMLESS
Consultant shall indemnify, defend, release from liability, protect and hold harmless the Client from
and against any and all liability to the extent resulting from the negligence of Consultant in providing
professional services hereunder.
To the extent allowed by law, the Client shall indemnify, defend, release from liability, protect and hold
harmless the Consultant, its managers, shareholders, partners, employees, officers, trustees,
directors and agents from and against any and all liability incurred by reason of any act, error or
omission arising out of this Agreement, except to the extent caused by the negligence of the
Consultant, its managers, shareholders, partners, employees, officers, trustees, directors and agents.
11. CONTROLLING LAW, JURISDICTION AND VENUE
This Agreement shall be interpreted, enforced and governed under the laws of the State of Texas,
without respect to conflicts or law principles. The Parties expressly agree that venue for any action
brought to enforce this Agreement or any part hereof shall be maintained exclusively in a court of
competent jurisdiction in Lubbock County, Texas.
12. COMPENSATION DISCLOSURE
The Compensation Disclosure set forth on Exhibit C hereto is hereby incorporated into this
Agreement by reference.
13. ENTIRE AGREEMENT
This constitutes the entire Agreement between the parties, and any other warranties or agreements
are hereby superseded.
Subsequent amendments to this Agreement shall only be in writing signed by both parties.
In WITNESS WHEREOF, the parties, through their authorized representatives, hereby execute this
agreement and all exhibits incorporated herein.
WORLD CLASS. LOCAL TOUCH.
Client:
Signature
Ci Yl I 2� Ak �0 p {
Name
U or
itle
Marsh & McLennan Agency LLC:
Signature
Mike Harris
Name
Chief Operating Officer
Title
• � W l�
Date
(2of J
Date
WORLD CLASS. LOCAL TOUCH.
ATTEST:
R-e-blr
Garza, City Secre ry
APP VED -CONTENT:
7
Leisa Atcheson
Director of Human Resources & Risk Mgmt.
APPROVED -.AS TO FORM:
First A"46is�t City Attorney
Exhibit A
SCOPE OF SERVICES
® Strategic Benchmarking and Stewardship
Consultant shall provide guidance in identifying market trends and assist in developing overall
plan benchmarks and targets to ensure that the plan meets objectives of Client and its
employees.
® Benefit Design
Consultant shall analyze marketplace and carrier options received during the request -for -proposal
(RFP) process and to ensure that the benefit designs are consistent with Client's overall
objectives identified in the strategic benchmarking process.
® Vendor and Carrier Management
Consultant shall identify core administrative services, assess vendor and carrier performance,
and manage relationships and processes to provide appropriate program administration.
® Funding Arrangements
Consultant shall advise and counsel regarding program funding alternatives, including as
appropriate, the review of fee proposals, recommending budget rates, reviewing employee
contribution rates, calculating COBRA rates, selecting and procuring appropriate stop loss terms,
and monitoring program costs against expectations.
® Communications
Consultant shall 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. Final approval shall be necessary from Client.
® HR Workplace Services
Consultant shall provide a telephonic and email service where employer can contact a Human
Resource expert regarding Hiring/Firing/Discipline/FMLA and other related human resource and
employment related issues. Consultant shall cover the cost of a select group of basic services.
Additional services including but not limited to, online training, drafting of employee handbook,
and nondiscrimination testing can be accessed for a separate fee.
® HRAnswers Now
Consultant shall provide an online self-service resource that includes Daily News, State
employment laws and sample employment policies including job descriptions and performance
reviews.
® Compliance Assistance
Consultant shall provide periodic briefings and whitepapers on legislative developments
impacting employee benefit plans, including but not limited to, FMLA, COBRA, HIPAA, Section
125 and ACA.
WORLD CLASS. LOCAL TOUCH.
® Day-to-day Administration and Management
Consultant shall provide assistance in the daily administration of programs, including resolution of
vendor and carrier services issues. Concerns and questions raised by Client's employees and
management shall also be managed.
® Meetings with Clients and Vendors
Services shall include attendance at and facilitation of regular meetings with Client and vendors
as needed to facilitate program management including day-to-day operations and planning
program changes.
Consultant shall meet with Client on a as -needed basis to review all activities performed by
Consultant during the prior period. The meetings shall include discussion of business concerns,
including presentations of options and recommendations.
At a minimum, Consultant shall meet with Client semi-annually to review the program, state of the
marketplace, progress made toward strategic goals and developments within Client's
organization. Consultant shall also meet annually to review the stewardship for the preceding
year, define the goals and objectives for the upcoming year and agree upon Consultant's
compensation for the next twelve month period.
® Communication Application
Consultant shall provide a communication app (Benefit Cloud, or I Benefits), which is a smart
phone benefits communication portal that provides interactive communication between employer
and employee.
❑ Service Center
Client's employees shall have access to a dedicated toll -free number and email address for
assistance with employee contributions, plan information, claims issues, network issues,
enrollment, and eligibility. Trained Benefit Specialists shall be available by phone Monday
through Friday from 8:00 a.m. to 6:00 p.m. CST with additional times available by appointment.
Service center is closed on standard holidays.
❑ Data Analytics (❑ iCAF or ❑ Verisk)
Consultant shall provide Client with a) a summary of health plan management analytical report as
agreed upon to analyze the health care, pharmacy and dental claims paid, b) a periodic analytical
report as needed (usually three times) throughout the plan year including IBNR calculations and
renewal projections, and c) an analytical report using the full previous twelve months of claims on
an annual basis including Consultants sample book of business benchmarking along with other
national benchmarking studies.
Consultant may access information via carrier sites, data feeds and bswift or Market Link as
applicable to facilitate analytical reporting.
® Actuarial Services (® Milliman Actuarial or ❑ MMAActuarial)
Consultant shall provide Client with access to actuarial services as requested by Client. Either
service can provide a series of reports and analysis based on client needs (e.g. Renewal
projections, IBNR Calculation, Financial Monitoring, Renewal Analysis, etc.).
Consultant may access information via carrier sites, data feeds and bswift or Market Link as
applicable to facilitate analytical reporting.
WORLD CLASS. LOCAL TOUCH.
❑ Benefit Enrollment Administration (❑ bswift or ❑ MarketLink)
Consultant shall provide benefit administration technologies capable of providing client and their
employee's access to a full service, turnkey online benefits enrollment system. A separate
professional services agreement shall be provided if this service is elected.
❑ Manual Benefit Administration
Consultant shall perform manual enrollment processes involving the additions, changes and
terminations of Client's employees into the carrier or vendor service systems selected by the
client for their eligible employees.
❑ Bill Audit Services
Consultant shall perform the audit of the stipulated bills on a monthly or quarterly basis as
outlined in Exhibit E. Only available when carrier monthly bill and payroll deduction report are
provided in excel format.
® Health Management
® Option 1: Wellness Director shall consult with client telephonically (under 100
Employees) or in person (100+ Employees) to provide strategic planning for
wellness/health promotion employer sponsored programming, identify and provide
comparative analysis with wellness vendors or identify and provide comparative analysis
with Disease management / Targeted population health vendors, and/or outcomes -based
model. Consult shall also include a review of employee benefits and plan design to
encourage preventive care.
❑ Option 2: iNGAGEDhealth is a program designed to be customized for each clients'
needs which includes features such as, but not limited to, population risk analysis,
biometric screenings, outreach coaching, pharmacy review, preventive care reminders
and health risk assessment.
Client:
Signature
�ni-ePope
Name
AA- CSC U r)-c
T-ftle
Date
WORLD CLASS. LOCAL TOUCH.
Exhibit B
EMPLOYEE BENEFITS COVERAGE TYPES
The following plans/programs are understood to be in Client's current benefit portfolio and are included in
the services offered (Exhibit A) and the pricing outlined in Exhibit C. Changes to the current
plans/programs or plan design may impact pricing. MMA and client will mutually agree in advance of any
pricing changes necessitated by plan, program or design changes.
COVERAGEDO-
Additional Services Vendor
• Consultation Services Marsh & McLennan Agency
Actuarial Services Milliman Actuarial
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WORLD CLASS. LOCAL TOUCH.
Exhibit C
SERVICE FEES
FEE (Dallas Consulting Team) - Client agrees to pay Consultant $30,000 in increments of $2,500 paid
on a(n) monthly basis for the term defined above. This fee arrangement shall remain in effect for
subsequent years unless modifications are agreed to by both parties and such modifications are included
as an addendum to this document. The first installment is due approximately 30 days from receipt of the
invoice. Future installments shall be due on the 1" of each month.
SERVICE
PAYMENT PROCESS
Milliman Actuarial Core Services ($1.56 pepm)
(Milliman is a 100% pass -through expense)
CYCLE PAID TO
Monthly MMA
TOTAL MMA/MILLIMAN PROPOSED OPTION #1 FEE IS $78.321.12
Compensation above is inclusive of below as indicated:
❑ The fees indicated above are in addition to any commissions normally paid to us by the insurance
company(ies) involved. Commissions are included in the premiums for
® The fees indicated above are in lieu of any commissions normally paid to us by the insurance
company(ies) involved. If a carrier is unable to issue a policy net of commission or inadvertently
issues the policy with commission, Consultant shall refund the commission to client or offset an
equal amount on future invoices.
In addition to commission and any fees listed above, Agency may be eligible for contingency or
override commission based on the overall performance of the Agency clients being insured or
services by individual carriers. This is not a guaranteed program and can be changed or eliminated
by the carrier each year.
Additional programs and services may be provided on a project basis for an additional fee to be
disclosed in writing via amendment to this Agreement and upon mutual consent between Consultant
and Client.
Client:
Signature
bankO A. 4C
Name
AC'1 .i I C>J-
itle
I
10
WORLD CLASS. LOCAL TOUCH.
11
Exhibit D
COMPENSATION DISCLOSURE AND LIMIT OF
LIABILITY
Marsh & McLennan Agency ("MMA") prides itself on being an industry leader in the area of transparency
and compensation disclosure. We believe you should understand how we are paid for the services we
are providing to you. We are committed to compensation transparency and to disclosing to you
information that will assist you in evaluating potential conflicts of interest.
As a professional insurance services provider, MMA and its subsidiaries facilitate the placement of
insurance coverage on behalf of our clients. In accordance with industry custom, we are compensated
either through commissions that are calculated as a percentage of the insurance premiums charged by
insurers, or fees agreed to with our clients.
MMA receives compensation through one or a combination of the following methods:
• Retail Commissions —A retail commission is paid to MMA by the insurer (or wholesale broker) as a
percentage of the premium charged to the insured for the policy. The amount of commission may
vary depending on several factors, including the type of insurance product sold and the insurer
selected by the client. Retail commission rates can vary from transaction to transaction.
• Client Fees — Some clients may negotiate a fee for MMA's services in lieu of, or in addition to, retail
commissions paid by insurance companies. Fee agreements are in writing, typically pursuant to a
Client Service Agreement, which sets forth the services to be provided by MMA, the compensation to
be paid to MMA, and the terms of MMA's engagement. The fee may be collected in whole, or in part,
through the crediting of retail commissions collected by MMA for the client's placements.
Contingent Commissions — Many insurers agree to pay contingent commissions to brokers who
meet set goals for all or some of the policies the brokers place with the insurer during the current
year. The set goals may include volume, profitability, retention and/or growth thresholds. Because
the amount of contingent commission earned may vary depending on factors relating to an entire
book of business over the course of a year, the amount of contingent commission attributable to any
given policy typically will not be known at the time of placement.
Supplemental Commissions — Certain insurers and wholesalers agree to pay supplemental
commissions, which are based on a broker's performance during the prior year. Supplemental
commissions are paid as a percentage of premium that is set at the beginning of the calendar year.
This percentage remains fixed for all eligible policies written by the insurer during the ensuing year.
Unlike contingent commissions, the amount of supplemental commission is known at the time of
insurance placement. Like contingent commissions, they may be based on volume, profitability,
retention and/or growth.
Wholesale Broking Commissions — Sometimes MMA acts as a wholesale insurance broker for
certain transactions. In these placements, MMA is engaged by a retail agent that has the direct
relationship with the insured. As the wholesaler, MMA may have specialized expertise, access to
surplus lines markets, or access to specialized insurance facilities that the retail agent does not
have. In these transactions, the insurer typically pays a commission that is divided between the retail
and wholesale broker pursuant to arrangements made between them.
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WORLD CLASS. LOCAL TOUCH.
• Other Compensation — From time to time MMA may be compensated by insurers for providing
administrative services to clients on behalf of those insurers. Such amounts are typically calculated
as a percentage of premium or are based on the number of insureds.
We will be pleased to provide you additional information about our compensation and information about
alternative quotes upon your request. For more detailed information about the forms of compensation we
receive please refer to our Marsh & McLennan Agency Compensation Guide at
http•//res cloudinarycom/mma/image/upload/vl437281898/ayzkoli0*zsgcy6rzom6.pdf
MMA's aggregate liability arising out of or relating to any services on your account shall not exceed
$10,000,000, and in no event shall we be liable for any indirect, special, incidental, consequential or
punitive damages or for any lost profits or other economic loss arising out of or relating to such services.
In addition, you agree to waive your right to a jury trial in any action or legal proceeding arising out of or
relating to such services. The foregoing limitation of liability and jury waiver shall apply to the fullest
extent permitted by law.
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WORLD CLASS. LOCAL TOUCH.
MARSH & MUENNAN
AGENCY
Marsh & McLennan
Agency LLC company
8144 Walnut Hill Lane
Suite 1600
Dallas, TX 75231
800-443-0185
WORLD CLASS. LOCAL TOUCH.
14
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
1of1
Complete Nos. 1- 4 and 6 if there are interested parties.
Complete Nos. 1, 2, 3, 5, and 6 if there are no interested parties.
OFFICE USE ONLY
CERTIFICATION OF FILING
Certificate Number:
2018-335433
1 Name of business entity filing form, and the city, state and country of the business entity's place
of business.
Marsh & McLennan Agency LLC
Dallas, TX United States
Date Filed:
04/06/2018
Date Acknowledged:
2 Name of governmental entity or state agency that is a party to the contract for which the form is
being filed.
City of Lubbock
g Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
18-13972
Consultant shall provide Client with consulting and brokerage services
Nature of interest
4
Name of Interested Party
City, State, Country (place of business)
(check applicable)
Controlling I
Intermediary
5 Check only if there is NO Interested Party. ❑
X
6 UNSWORN DECLARATION CAMQ-A T �`
My name is ,and my date of birth is
My address is V l 1 `I `rN V,� �1 L L I1 I., V \v V AG
(street) (city)
` X✓�� I V , .
(state) (zip code) (country)
I declare under penalty of perjury that the foregoing is true and correct.
-T r k C
Executed in �r ,J County, State of `y' ` J on
I - Q
the V day of NMI L 20 � D
(month) (year)
5�5'SignatJ84f aulAorized agent of contracting business entity
(Declarant)
Forms provided by Texas Ethics Commission www.etrncs.state.tx.us •.
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
1 of 1
Complete Nos. 1 - 4 and 6 if there are interested parties.
OFFICE USE ONLY
Complete Nos. 1, 2, 3, 5, and 6 if there are no interested parties.
CERTIFICATION OF FILING
Certificate Number:
1
Name of business entity filing form, and the city, state and country of the business entity's place
of business.
2018-335433
Marsh & McLennan Agency LLC
Dallas, TX United States
Date Filed:
04/06/2018
2
Name of governmental entity or state agency that is a party to the contract for which the form is
being filed.
City of Lubbock
Date Acknowledged:
04/11/2018
3
Provide the identification number used by the governmental entity or state agency to track or identify the contract, and provide a
description of the services, goods, or other property to be provided under the contract.
18-13972
Consultant shall provide Client with consulting and brokerage services
4
Name of Interested Party
City, State, Country (place of business)
Nature of interest
(check applicable)
Controlling
Intermediary
5
Check only if there is NO Interested Party.
X
6
UNSWORN DECLARATION
My name is and my date of birth is
My address is
(street) (city) (state) (zip code) (country)
I declare under penalty of perjury that the foregoing is true and correct.
Executed in County, State of on the day of , 20
(month) (year)
Signature of authorized agent of contracting business entity
(Declarant)
Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.5523