DATE: December 17, 2024
TO: Board of Supervisors
SUBMITTED BY: Hollis Magill, Director of Human Resources
SUBJECT: Agreement with ReliaStar Life Insurance Company to offer optional employee-paid Accident, Critical Illness, and Hospital Confinement Indemnity insurance to County of Fresno Employees
RECOMMENDED ACTION(S):
TITLE
As authorized by the Board of Supervisors’ suspension of competition determined on April 9, 2024, approve and authorize the Chairman to execute an Agreement with ReliaStar Life Insurance Company to provide optional employee-paid Accident Insurance, Critical Illness Insurance, and Hospital Confinement Indemnity Insurance to County of Fresno Employees, effective January 1, 2025, not to exceed five (5) consecutive years, which includes a three-year base contract and two (2) optional one-year extensions.
REPORT
Approval of the recommended action will allow ReliaStar Life Insurance Company (ReliaStar) to provide optional, employee-paid Accident, Critical Illness, and Hospital Confinement Indemnity insurance to County employees. There is no net County cost associated with this item, as all policies are optional and paid by the employee. This item is Countywide.
ALTERNATIVE ACTION(S):
Your Board may reject staff’s recommendation and select a different bidder. However, this would cause a disruption in service to employees and would not result in an overall decrease in costs to employees.
SUSPENSION OF COMPETITION/SOLE SOURCE CONTRACT:
On April 9, 2024, the Board of Supervisors made a finding that it was in the best interest of the County to not secure competitive bids or issue requests for proposals related to optional, employee-paid Accident, Critical Illness, and Hospital Confinement Indemnity insurance policies, consistent with Administrative Policy No. 34 under the “unusual or extraordinary circumstances” exception of Administrative Policy No. 34. This allowed the County the flexibility needed to negotiate directly with insurance providers and maximize cost effective alternatives that best meet the needs of the County, its active employees, and their dependents.
FISCAL IMPACT:
There is no net County cost associated with this item. Premiums are paid by participating employees. As the policies associated with this item are self-administered, the County will not receive an invoice from ReliaStar, but instead will remit employees’ premium deductions directly to ReliaStar.
DISCUSSION:
1. Description of Proposed Benefits
The proposed agreement allows ReliaStar to provide employee-paid Accident Insurance, Critical Illness Insurance, and Hospital Confinement Indemnity Insurance to County employees and their dependents. These benefits are considered supplemental health insurance and are fixed indemnity policies which may pay a limited dollar amount if a covered employee is sick or hospitalized.
• Accident Insurance. Under the proposed agreement, Accident Insurance pays benefits for specific, covered accidents and injuries that happen on or after the coverage effective date. The benefit amounts depend on the type of injury the covered employee experiences and the treatment they receive.
• Critical Illness Insurance. Under the proposed agreement, Critical Illness Insurance pays a lump-sum benefit if they are diagnosed with a covered illness or condition that happens on or after the coverage effective date.
• Hospital Confinement Indemnity Insurance. Under the proposed agreement, Hospital Confinement Indemnity Insurance pays a daily benefit for a covered hospital stay. In addition, there is an initial confinement benefit of five (5) times the daily benefit.
The benefits described above can be used for any purpose the covered employee chooses, including, but not limited to health insurance deductibles, co-payments, child-care, or home health care. The Critical Illness and Hospital Confinement Indemnity insurance policies include an additional Wellness Benefit, which pays out a fixed amount to covered employees who has a health screening test.
2. Bidding Process
Agreement No. 23-185 extended Agreement No. 20-072 for an additional year and included one (1) optional 8-month renewal, which the Director of Human Resources exercised. As Agreement No 20-072 expires December 31, 2024, on April 9, 2024, your Board authorized the Director of Human Resources to solicit bids for optional, employee-paid Accident Insurance, Critical Illness Insurance, and Hospital Confinement Indemnity Insurance. Human Resources, with the assistance of its health and benefits consultant, HUB International, solicited bids from qualified carriers to match the coverage levels under Agreement No. 20-072.
Four (4) carriers responded with bids for Accident Insurance, Critical Illness Insurance, and Hospital Confinement Indemnity Insurance: ReliaStar, Sun Life, Standard and Met Life. While ReliaStar didn’t have the lowest bid for all benefits, their costs were very competitive, and they offered the most expansive benefits overall. Therefore, staff is recommending that your Board select ReliaStar to continue as the County’s Accident Insurance, Critical Illness Insurance, and Hospital Confinement Indemnity Insurance provider for the following reasons:
• Continuity of Service. ReliaStar has provided excellent customer service to employees, during their term. Selecting a new carrier to provide services can cause disruptions to service.
• Efficiency. Transitioning to a new carrier entails extensive opportunity costs, in the form of staff time and resources that won’t be available to implement new benefits or enhance existing benefits.
3. Exceptions to the County’s Model Agreement
Staff would like to note that Article 9 of the proposed agreement includes indemnification language that is different from the County’s standard language, as ReliaStar requested that the current standard language be replaced with the “Hold Harmless” language in Article 9 of Agreement No. 20-072. In addition, ReliaStar has requested that their Protected Health Information and Data Security exhibits be included, which the County agreed to in our current agreement with ReliaStar. The Department believes the benefits of entering into this agreement outweigh any associated risk.
4. Staff Next Steps
Assuming your Board’s approval of the recommended action, there will be no change in benefits or costs to employees. Therefore, no additional action will be necessary.
OTHER REVIEWING AGENCIES:
HUB International, the County’s Health and Benefits consultant, reviewed the responses and is recommending approval of the recommended action.
REFERENCE MATERIAL:
BAI #41, April 9, 2024
BAI #40, February 25, 2020
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Agreement with ReliaStar Life Insurance Company
CAO ANALYST:
Paige Benavides