Request for Proposals received May 3, 2018 for S69-T26525 – Approve an Ordinance authorizing a contract between the City of Houston and Dearborn National Life Insurance Company in the amount not to exceed $9,187,718.00 for insurance coverage and administration of the City of Houston Basic Life Insurance and Voluntary Life Insurance Plans for the Human Resources Department.
Specific Explanation:
The Director of the Human Resources and the Chief Procurement Officer recommend that City Council approve an Ordinance authorizing an award for five (5) years, with two (1) one-year options to Dearborn National Life Insurance Company in the amount not to exceed $9,187,718.00 for insurance coverage and administration of the City of Houston Basic Life Insurance and Voluntary Life Insurance Plans for the Human Resources Department.
The Life Insurance program at the COH is composed of two (2) plans: Basic and Voluntary Life. Basic Life Insurance is provided to employees under a non-contributory plan. This plan provides benefits upon the death of an eligible employee. The benefit coverage is one-time (1x) the base annual salary for eligible employees rounded up or down to the nearest $1,000. As of November 2017, the total number of Active employees eligible for a Basic Life insurance benefit was 22,528.
The scope of work requires the contractor to provide Basic Life Insurance for eligible active employees and their dependents under a non-contributory plan, and Voluntary Life Insurance at 1x, 2x, 3x or 4x annual salary for active employees and their eligible dependents under a contributory plan funded by the employee. Both plans will provide benefits upon the death of an eligible active employee and covered dependents. Only Basic Life coverage is available for retirees and deferred retirees under a 100% contributory plan. Retirees are not eligible to elect Voluntary Life coverage. As of November 2017, the total number of Retirees with Life insurance was 10,566. Specifically, 8,150 retirees with a $ 5,000 Life Benefit and 2,416 with a $10,000 Life Benefit.
The carrier will provide life insurance coverage, claims processing and other related administrative services for the plans for an initial term of five (5) years beginning October 1, 2018 through September 30, 2023. The City of Houston reserves the option of extending the agreement for two (2) additional one-year terms or portions thereof, for a maximum seven-year contract term.
The Request for Proposals (RFP) was advertised in accordance with the State of Texas bid laws, and thus, submittals were received from six (6) firms: Dearborn National Life Insurance Company, Life Insurance Company of North America (Cigna), Metropolitan Life Insurance Company (MetLife), Securian Financial Group, Standard Insurance Company, and Sun Life Assurance Company of Canada. The evaluation committee consisted of evaluators from the Human Resources Department, the Houston Airport System, and the Solid Waste Management Department. The evaluation was based upon the following criteria:
1. Responsiveness of Proposal
2. Technical Competence
3. Price Proposal
Dearborn National Life Insurance Company was deemed as having met all requirements.
M/WBE Participation:
This RFP was issued with a one and twenty-five hundredths (1.25%) percentage goal for M/WBE participation.
SUBCONTRACTOR LISTING
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PRIME
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SUBCONTRACTOR
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TYPE OF WORK
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PERCENTAGE
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Dearborn National Life Insurance Company
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Magoo’s Printshop, Inc,
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Printing services.
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.625%
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Lacey Newday Consulting, LLC
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Enrollment services.
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.625%
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Pay or Play Program:
The proposed contract requires compliance with the City’s ‘Pay or Play’ Ordinance regarding health benefits for employees of City contractors. In this case, Dearborn National Life Insurance Company will provide health benefits to eligible employees in compliance with City policy.
Hire Houston First:
The proposed contract requires compliance with the City’s ‘Hire Houston First’ Ordinance that promotes economic opportunity for Houston businesses and supports job creation. In this case, Dearborn National Life Insurance Company does not meet the requirements for HHF designation; no HHF firms were within five percent.
Fiscal Note:
Funding for this item is included in the FY2019 Adopted Budget. Therefore, no Fiscal Note is required as stated in the Financial Policies.
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_______________________________________
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___________________________________
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Jerry Adams, Chief Procurement Officer
Finance/Strategic Procurement Division
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Department Approval Authority
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Estimated Spending Authority
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DEPARTMENT
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FY2019
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OUT YEARS
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TOTAL
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Human Resources Department
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$664,669.00
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$8,523,049.00
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$9,187,718.00
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