Request for Proposals (RFP) received on October 3, 2024 for Doc1145745814 - Approve an ordinance awarding contracts to KS Plan Administrators LLC, dba KelseyCare Advantage and Emphesys Insurance Company (Humana) in the maximum contract amount of $151,660,000.00 for Medicare Advantage and Prescription Drugs PPO and HMO Health Plans for a three (3) year contract, with two (2) one-year renewal options for the Human Resources Department.
Specific Explanation:
The Director of the Human Resources Department (HR) and the Chief Procurement Officer recommend that City Council approve an ordinance awarding a three (3) year contract, with two (2) one-year renewal options, for a total of five (5) years to KS Plan Administrators LLC, dba KelseyCare Advantage and Emphesys Insurance Company (Humana) in the maximum contract amount of $151,660,000.00 to provide Medicare Advantage and Prescription Drugs Heath Plans to City covered retirees and their eligible dependents.
Since 2021, the City has successfully sponsored two Medicare Advantage Plan for its Medicare-covered retirees and their Medicare-covered dependents. These contract terms were for three years with two one-year options, all of which will expire at 12:00 midnight on December 31, 2025. These Medicare plans are the only plans available for over 10,000 Medicare-covered City retirees and their dependents.
The Strategic Procurement Division, on behalf of the Human Resources department, published a Request for Proposals (RFP) on June 14, 2024. The Scope of Work required the contractors to provide Medicare health plans, pharmacy benefits, and all related services to eligible City retirees and their eligible dependents who are covered by Medicare. Services will include, but are not limited to, network management, claims processing, plan design and administration, customer service, and Medicare and City-required reporting.
The RFP was advertised in accordance with the requirements of the state of Texas bid laws, and proposals were received from KS Plan Administrators LLC, dba KelseyCare Advantage, Aetna Life Insurance Company, and Emphesys Insurance Company (Humana). The evaluation committee consisted of employees from HR, and the Finance and Legal Departments.
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The proposals were evaluated based on the following criteria:
1. Responsiveness of Proposal;
2. Technical Competence; and
3. Price Proposal.
KS Plan Administrators LLC, dba KelseyCare Advantage and Emphesys Insurance Company (Humana) received the highest overall scores and were deemed the best-qualified firms to meet the requirements outlined in the RFP.
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Vendor
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FY2026 Amount
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Out Years Amount
|
Total
|
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KS Plan Administrators LLC, dba KelseyCare Advantage
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$5,500,000.00
|
$57,470,000.00
|
$62,970,000.00
|
|
Emphesys Insurance Company (Humana)
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$5,600,000.00
|
$83,090,000.00
|
$88,690,000.00
|
|
|
|
Total
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$151,660,000.00
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M/WBE Participation:
The RFP was advertised with a 10% M/WBE participation goal. Below is a breakdown of participation by each vendor.
KS Plan Administrators LLC, dba KelseyCare Advantage submitted a M/WBE participation plan calculating to 10% M/WBE participation.
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Company
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Type of Work
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Percentage
|
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Gunter Creative
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Graphic Design Services
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5%
|
|
Ann Lee & Associates dba The Lee Group
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Marketing Consulting Services Advertising Agency
|
5%
|
Emphesys Insurance Company (Humana) submitted a M/WBE participation plan calculating to 10% M/WBE participation.
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Company
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Type of Work
|
Percentage
|
|
Brand IQ, LLC.
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Advertising Materials, Communications and distribution services
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10%
|
Pay or Play
The proposed contract requires compliance with the City’s ‘Pay or Play’ program regarding health benefits for employees of City contractors. In this case, KS Plan Administrators dba KelseyCare Advantage and Emphesys Insurance Company (Humana) 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’ (HHF) ordinance that promotes economic opportunity for Houston businesses and supports job creation. In this case, KS Plan Administrators LLC dba KelseyCare Advantage is a designated HHF company, but they were the successful awardee without application of the HHF preference. Emphesys Insurance Company (Humana) does not meet the requirements for HHF designation.
Fiscal Note:
Funding for this item is included in the FY2026 Adopted Budget. Therefore, no Fiscal Note is required as stated in the Financial Policies.
____________________________________ ___________________________
Jedediah Greenfield, Chief Procurement Officer, Department Approval Authority
Finance/Strategic Procurement Division
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Department
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FY 2026
|
Out Years
|
Total
|
|
Human Resources
|
11,100,000.00
|
140,560,000.00
|
151,660,000.00
|