HomeMy WebLinkAboutResolutions - 1994.02.10 - 24058MISCELLANEOUS RESOLUTION #93181 September 1993
BY: PERSONNEL COMMITTEE - Marilynn E. Gosling, Chairperson
IN RE: FLEXIBLE BENEFIT PLAN - RECOMMENDATION FOR IMPLEMENTATION
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS, a Fringe Benefit Review Committee comprised of
representatives from the Board of Commissioners and Departments of
Personnel, Risk Management and Management and Budget received
authorization from the Board of Commissioners in June 1992 to
obtain assistance from a consultant to conduct an assessment study
a possible flexible benefits program for Oakland County employees;
and
WHEREAS, the assessment study confirmed several benefits for
both the County and our employees including the potential for
current and future cost containment for the County and areas for
cost savings for employees as well as the ability of employees to
direct benefit dollars where they are most appropriate for them and
their family; and
WHEREAS, the Fringe Benefit Review Committee reported to the
Personnel and Finance Committees in February 1993 with the
recommendation that the Review Committee proceed by sending out
Requests for Proposals for assistance to implement a flexible
benefit program and to return to the Board with a final report and
recommendation; and
WHEREAS, that report and recommendation is complete and has
been presented to the Personnel and Finance Committees which
support the recommendations of the Review Committee.
NOW THEREFORE BE IT RESOLVED that the Board of Commissioners
approves the Flexible Benefits Plan as recommended in Sections I
and II of the attached Report.
Chairperson, on behalf of the Personnel Committee, I move the
adoption of the foregoing resolution.
ilEREBy opRovE THE • OREGOING RESOLUTION I
-4.01,1".""•n
:3r)oks Patt!-,oa. County Exeutive Date
SECTION I
BACKGROUND AND INTRODUCTION
SECTION I - BACKGROUND AND INTRODUCTION
These materials contain the report and recommendations of the
Fringe Benefit Review Committee on the subject of establishing a
Flexible Benefit Program for County employees.
The committee consisted of the following members:
Vince Luzi, Director, Personnel
Bob Daddow, Director, Management and Budget
Doug Williams, Deputy County Executive
James Brennan, Director, Program Evaluation and Operational
Analysis
Fred Poinsett, Manager, Accounting Division
Ken Vinstra, Assistant Director, Personnel
Jeff Pardee, Manager, Budget Division
Stan Fayne, Director, Risk Management
Dean Shackelford, Supervisor, Employee Benefits
Lynda Flynn, Senior Financial Analyst, Budget Division
The committee received authorization from the Finance Committee in
June of 1992 to obtain the assistance of a consultant for an
assessment study to determine the advisability of initiating a
flexible benefit program for Oakland County employees. That report
was completed in December, 1992, and projected significant savings
to the County primarily from anticipated health care "opt outs",
i.e. employees electing not to be covered by County health
coverage. It also confirmed the benefits of setting the stage for
future cost controls, if necessary. In February, 1993 the Fringe
Benefit Review Committee reported to the Personnel and Finance
Committees with the recommendation that the review committee
proceed with RFP's to outside consultants for firm prices to assist
with implementing a flexible benefit program. Concurrently the
review committee would refine estimates for in-house costs so a
cost/benefit analysis could-be completed.
RFP's were sent out to 27 companies on March 19, 1993 with a
deadline of April 23, 1993. A mandatory conference was held on
April 2, 1993 to answer any questions from participating companies
and to be certain all companies heard the same response. Responses
were received from eleven companies in a timely fashion.
-
A subcommittee of three was appointed to carefully review all
proposals and to recommend finalists to the full review committee.
The subcommittee was comprised of the following individuals:
Dean Shackelford, Supervisor, Employee Benefits
Stan Fayne, Director, Risk Management
Jeff Pardee, Manager, Budget Division
The subcommittee was unanimous in their top two recommendations:
Wyatt Company and ComeriCOMP. The other choices were not
consistent in their order but the other three of the top five
recommendations were: 3) Coopers Lybrand; 4) William Mercer;
1
and 5) Ernst & Young. While these three submitted satisfactory
proposals their costs either were greater than the first two or
contained estimated amounts with uncertain or totals higher than
the first two. Subcommittee recommendations were presented to the
full review committee on June 9, 1993.
The review committee heard the recommendations of the subcommittee
and voted unanimously to request presentations from Wyatt Company
and ComeriCOMP. Specific questions were to be sent to these two
companies requesting that their presentations concentrate in these
areas in order for the committee to make a more complete comparison
between the proposals (see Attachment B for copies of the letters).
Presentations were made on June 23, 1993 by each company. Both
companies were determined to be acceptable. Based primarily on the
cost comparisons of the two top selected companies the Fringe
Benefit Review Committee unanimously voted to recommend ComeriCOMP.
Information regarding this recommendation can be found in Section
IV, page 15.
By way of a brief explanation on flexible benefits, selected
benefits or most non-mandatory benefits may be part of a flexible
benefit plan. In addition "reimbursement accounts" paid by the
employee with pre-tax dollars may be part of a qualifying plan.
These reimbursement accounts are health care and dependent care.
The employee identifies a fixed number of dollars from their pay to
be set aside for the reimbursement accounts. As bills are paid by
the employee in these areas they may have them reimbursed from
their pre-tax accounts. The positives are that neither the
employer or employee pay social security tax on these dollars and,
of course, the employee does not pay income tax on them either.
The negative is that the employee must have an accurate assessment
of their anticipated expenses because if they do not use these
dollars on qualifying items they are lost to the employee.
For the other benefits included in a flexible benefit plan each
current benefit is assigned a certain number of "benefit credits"
or "benefit dollars" and placed in a pool for the particular
employee. Typically several "opt up" (higher) and "opt down"
(lower) options are added for each benefit and for some areas an
opt out option is added. The employee then determines the level of
benefit they need for their circumstances. They are then charged
for each benefit they selected according to the pre-determined
assigned number of "benefit dollars". If the cost is greater than
their bank of "benefit credits" they pay the added cost from their
salary. If the benefit costs are less they can have the unused
"benefit credits" converted to cash. Typically the opt out
credits, such as in health care where the employee has coverage
through a spouse, are less than the cost of the benefit. This is
where most of the projected savings to the County are expected in
the initial years of the program. Both the employee and employer
benefit in this case. Cost information appears in Section V of
this report.
The other significant element of a flexible benefit plan is that it
permits an employer to set the stage to limit future benefit cost
increases if necessary while at the same time permitting the
employee flexibility on where he or she wants their benefit dollars
spent to best fit their own situations. This is both a realistic
and responsible approach when faced with limited resources and
increasing costs. Each year the flexible benefit plan is reviewed
including: options to offer, pricing of benefits to employees, and
any additional dollars that will be added to the benefit plan.
One last point must be mentioned. Considerable attention has been
given to health care reform and tax changes under the current
federal administration. The Fringe Benefit Review Committee feels
our best course is to move forward with implementing a flexible
benefit program. The potential savings to the County are
significant and further delay could be costly. Should action on
the federal level warrant rethinking of this position prior to the
recommended implementation date of April 1, 1994, the Review
Committee will return to the Board.
3
SECTION II
EXECUTIVE SUMMARY OF RECOMMENDATIONS
SECTION II - EXECUTIVE SUMMARY OF RECOMMENDATIONS
The recommended plan for Oakland County would initially cover
approximately 2,000 non-represented employees. This plan would be
offered to represented employees as contracts are negotiated or if
special discussions are requested by a union group.
Assuming Board approval is received prior to the end of the third
quarter the Review Committee recommends implementation for April 1,
1994.
The following six benefits are recommended for inclusion in the
plan with two or more choice levels for each benefit: Medical,
Prescription Drug, Dental, Vision, Group Life, and Accidental Death
and Dismemberment. Medical, Prescription Drug, and Dental would
each have the option of "No Coverage". Additionally, reimbursement
accounts for Health Care and Dependent Care would be included in
the program.
Current Short-Term and Long-Term Disability Income benefits would
be communicated to employees during the selection process each year
but would not be included in the plan with any optional choices.
Neither will any time off benefits such as annual leave be
included, at least not initially.
The chart which follows outlines in brief the proposed benefit
structure for the first year of a flexible benefit program in
Oakland County. More details will be found in Section III.
Projected gross savings for the first twelve months of such a
program covering 2,000 non-represented employees is $816,000. Net
savings after consultant and in-house implementation costs are
considered is $641,000.
The Review Committee recommends that the Department of Personnel
execute a Professional Services Contract with ComeriCOMP not to
exceed $146,726 to provide the services detailed in their proposal
dated April 1993 and outlined on pages 6 and 7 of this report.
4
FROM OAKLAND COUNTY
Source
OS
Funds:
• Core Benefit Value
Dependent
Care
Health
Care
PLAN DESIGN
FROM EMPLOYEES
• Opt out/down
• Elective salary reduction under Section 125
• After-tax employee contributions
PrMax Ahor-tax Benefit Coll
Pool
Medkat
• KOS
TiadNonel Mon
• OCAS PPO
• Ben
• HAP
• Mc Comas*
Prasalption
Drug
• $3 Men
• 115
• WO Men
• No Comas**
Haien
• Enhanced Plan
• Omani Plan
Shan
Tom
Disabity
• Communicate
Omani
Benoit
Lom
Tenn
Disaby
• Comamicato
Benoit
l Eiriploy• I
Group
Via
• Care: 1 1/2 a
Pay • Optional
Comas.
Lawn
- Buy Down
1 I pay
- UP
2 pay
3 pay
I .
ADO
• Cole. 1
Pale
• Opeonal
Coverage
lawate
1 la pay
2. pay
3 apay
Reenbuise-
rnent
Accounts
Cash/
Post-tax
Denerts
• ungustia
bonina
Credits
*unveiled
le Clear
• Entienood
• Cterant Plan
• Madlied Pim
• No Common
1 [ [ Mandatory Benefits
• Social Smelly Tsai .
• 'Medicare Tax
•• Federal Unempiciymerd Tax
• Stale Unemployment Tax
• Waken' Compensation
Voluntary Benefits
Excluded Under Section 125) I
• Holidays (12)
• Fballng lioNday (1)
• Tuition Reimbursement
• Annual Leave Time
• Personal Leave Time
• Retirement Plan
- 51.000
tadmisien
• Only II No Covenage under medlcaL
• 15,000
Idlaxereen
PLAN IMPLEMENTATION
The following are the major steps involved in implementing a
flexible benefits plan. The consultant will take the lead in all
of these areas in the first year, closely assisted primarily by
Personnel, Computer Services, Risk Management and Accounting.
Reimbursement accounts will be handled entirely by the consultant.
We would expect the consultant will remain involved for some
limited time in the future to handle the annual re-enrollment and
the re-evaluation of the plan components.
COMMUNICATIONS
• Prepare written and verbal communication materials
• Hold meetings with managers and employees
SELECTION PROCESS
• Prepare Employee Workbook
• Prepare Telephone Enrollment System
• Prepare Confirmation Statements
• Produce Payroll Update Tapes
• Produce Updates for Benefit Carriers
POST IMPLEMENTATION
• Prepare Legal Plan Document
• Prepare Summary Plan Descriptions
• Perform Discrimination Tests
It is anticipated that implementation will be about a six month
process.
S.
6
SECTION III
FLEXIBLE BENEFIT DESIGN
"1
SECTION III - FLEXIBLE BENEFIT DESIGN
In designing a flexible benefit plan, the Fringe Benefit Review
Committee had to address a number of issues. Two of the bigger
ones were if (and if so, how) we should incorporate benefit plan B
employees into a flexible benefit plan and how part-time eligible
employees fit in.
In 1985, County employees were given the option of continuing with
the then current benefit program, now known as plan "B", (and
continue earning sick leave), or selecting a new benefit program,
with enhanced retirement, disability and life insurance but not
sick leave, now known as plan "A". We now have only 126 full time
employees remaining on plan "B". It was determined that the plan
"B" employees could be included in a flexible benefits plan with
only a minor modification to their life insurance.
It was also determined that part-time eligible employees would be
excluded from the plan. There are 81 part-time employees eligible
for benefits.
As you might expect, a significant part of the discussions of the
Fringe Benefit Review Committee centered around what benefits and
benefit variations would be offered. As part of this review, a
survey of 1,000 employees was conducted in August of 1992. Almost
half cited our dental and vision programs as what they would most
like to see improved. Enhanced options are proposed for both of
these benefits. In addition, the largest single suggestion under
"other comments" was that a flexible benefit plan be implemented.
So the concept seems to be of significant interest to employees.
What follows is the implementation recommendation of the Committee,
recognizing that a flex plan is a dynamic sort of program. The
benefits offered can be reviewed in the future as employee and
employer needs change.
7
MEDICAL PLAN DESIGN
Annual Coinsurance Out-Of-Pocket
Option Deductible Level Maximum
BCBS None - Basic 100% - Basic $1,000 plus
$100/200 MM Only 90% - MM annual deductible
BCBS PPO None - Basic 100% - Basic $1,000 plus
$1004200 MM Only . 100% or 90% - MM annual deductible
Blue Care Network None $0 OV Copay . N/A
$2 Rx Copay
Health Alliance Plan None $0 OV Copay N/A
$2 Ax Copay
No Coverage — No Coverage With Evidence of Other Coverage — —
* Employee currently receives $136 for no coverage.
Note: It is also recommended that the waiting period for
Medical coverage for Commissioners be modified to
conform with the rest of the County workforce. This is
in order to avoid potential problems with the
eligibility and non-discrimination testing requirements
of a flexible benefit plan.
8
PRESCRIPTION DRUG PLAN DESIGN
_
OPTION COPAYM E NT COVERAGE
_ Option A . $3 Copayment per prescription Federal legend prescription drugs__
Option B IL $5 Copaymervt per prescription Federal legend prescription drugs
Option C * , $10 Copayment per prescription Federal legend prescription drugs
BC N — — Only selected if employee selects BCN medical — _
HAP — Only selected if employee selects HAP medical — — ,
No Coverage * — — Only selected if employee opts-out of medical coverage—. — ,
* Not an option for employees under current benefit program.
9
Ootion Copayment Amount Benefits
DENTAL PLAN DESIGN
'
Enhanced Plan * Plan would cover 100-85-50-50 up Preventive
to a $1,000 annual maximum per Basic
individual and a $750 orthodontia Major
maximum. Orthodontia
Any dental related expense _ _
Current Plan Plan would cover 100-85-50-50 up Preventive
to a $750 annual maximum per Basic
individual and a $750 orthodontia Major
maximum. Annual deductible of Orthodontia
$25/$50. Any dental related expense _ _
Modified Plan * Plan would cover 100-50-50-50 up Preventive
to a $500 annual maximum and a Basic
$500 orthodontia maximum. Major
Orthodontia
_ Any dental related expense . _
No Coverage * — — No Coverage With Evidence of Other Coverage — —
* Not an option for employees under current benefit program.
VISION PLAN DESIGN
Option Copayment Amount Benefits I
Enhanced Plan 0 Exam - $5 at a BCBS Every 12 Months
participating provider up to the
BCBS negotiated maximum
Lenses & Frames - $7.50 at a
BCBS participating provider up to
the BCBS negotiated maximum
Current Plan Exam - $5 at a BCBS Every 24 Months
participating provider up to the
BCBS negotiated maximum
Lenses & Frames - $7.50 at a
BCBS participating provider up to
the BCBS negotiated maximum
* Not an option for employees under current benefit program.
LIFE INSUAANCE
PLAN COST PRICETAGS CREDITS
1 times annual earnings * step rates step rates To buy 1 1/2 x
Earnings
11/2 times annual .241/1000 .241/1000 To buy 1 1/2 x
earnings Earnings
2 times annual earnings * step rates step rates To buy 1 1/2 x
Earnings
3 times annual earnings * step rates step rates To buy 1 1/2 x
Earnings
AGE BASED STEP RATES:
ACIO Rate Per $1,000
15-19 .05
20-24 .07
25-29 .08
30-34 .09
35-39 .12
40-44 .18
45-49 .31
50-54 .51
55-59 .84
60-64 .93
65-69 1.81
70-74 2.90
75-79 2.64
* Not an option for employeea under current benefit program.
Note: It is the recommendation of the Committee that any paid up
life policies continued under the previous life insurance
plan be kept outside of the flexible benefit plan. Also, in
order to avoid any discrimination problems, we recommend
modifying the life insurance available to Plan B employees
to be consistent with other non-represented employees.
While this would be both a policy change and a slightly
increased life insurance cost (estimated annual cost of
$2,000), to keep the current Plan B life insurance as it is
would risk failure of discrimination tests.
ACCIDENTAL:DEATH .AisID DISMEMBERMENT
PLAN COST PRICETAGS CREDITS
1 times annual earnings .04/1000 .04/1000 To buy 1 x Earnings
11/2 times annual * .04/1000 .04/1000 To buy 1 x Earnings
earnings
2 times annual earnings * .04/1000 .04/1000 To buy 1 x Earnings
3 times annual earnings * .04/1000 .04/1000 To buy 1 x Earnings
* Not an option for employees under current benefit program.
REIMBURSEMENT ACCOUNT DATA
COMERICOMP ADMINISTERED
HEALTH CARE REIMBURSEMENT ACCOUNT *
ASSUMPTIONS:
• 1$73 Non-Represented Employees
• 15% Participation
• $400 Average Contribution
• $4 Per Participant Monthly Administration Fee
PROJECTIONS:
Tax Savings For The Employer
296 Participants x $400 x .0765 FICA $9,058
Annual Cost To The Employer
296 Participants x $4 x 12 months $14208
DEPENDENT CARE REIMBURSEMENT ACCOUNTS' *
ASSUMPTIONS:
• 1,352 Non-Represented Employees With Two-Person or Family Coverage
• 3% Participation
• $3,500 Average Contribution
• $4 Per Participant Monthly Administration Fee
PROJECTIONS:
Tax Savings For The Employer
41 Participants x $3,500 x .0765 FICA $10,978
Annual Cost To The Employer
41 Participants x $4 x 12 months $1,968
SAVINGS / COST $20,036 $ 16,176
ESTIMATED NET SAVINGS $3,860
* Not an option for employees under current benefit program.
savings Cost
_ SECTION IV
RFP REVIEW AND RECOMMENDATION
SECTION IV - RFP REVIEW AND RECOMMENDATION
Of the 27 firms to which requests for proposals were sent, 13
attended a mandatory pre-proposal conference on April 2. Of these
13, eleven actually submitted proposals.
Each of the 11 proposals were evaluated independently by each
member of the subcommittee of three described in Section I. Each
proposal was evaluated in five separate categories that
corresponded with the "proposal requirements" section of the
request for proposal. Each proposal was then also evaluated in
eight categories that corresponded to the "scope of services"
section of the request for proposal. Finally, an "overall
impression" rating was given. Then the three members of this
subcommittee met to discuss each of the proposals, paying
particular attention to any areas where there may have been
differences of opinion. In fact, significant differences were
rare, a consensus was then reached.
The subcommittee then presented its' findings to the full Fringe
Benefit Review Committee. As was indicated in Section I two
proposals stood out, ComeriCOMP and Wyatt. It was the consensus of
the Fringe Benefit Review Committee that the top two proposals be
considered and further that each be invited in to answer specific
questions that had arisen.
After the presentations, an analysis of the costs for each proposal
was made as shown below.
Base Price
Printing
Telephone Charges (IVR*)
Telephone Charges (Monthly)
Employee Meetings (28 with
consultant participating)
Reimbursement Accounts
Legal Plan Documents
*Interactive Voice Response
Wyatt CompriCOMP
$106,000 $100,000
36,450 8,250
-0- 8,009
4,600 4,600
4,500 7,200
16,176 16,176
2.500 2.500
$170,226 $146,726
It was based on this final review that by unanimous vote of the
full Fringe Benefit Review Committee ComeriCOMP was chosen for
recommendation. It is anticipated that the consultant will take
the lead in all aspects of implementation. See Section II for more
information.
, SECTION V .
F INANC I AL ANALYS I S
$147,000
30,000 ,
$177,000
$64 1 ,000
========
SECTION v - FINANCIAL ANALYSIS
Flexible benefits is the approach preferred by employers whose top
priority is controlling future health care costs. The transition
from a "defined benefit" to "defined contribution" approach to
funding employee benefits combined with the use of other plan
strategies has lowered the rate of benefit increases for employers
with flexible benefits.
The first objective of Oakland County in implementation of the
proposed Flexible Benefit Plan is to develop strategies and a
delivery system that manages the increasing cost of benefits. This
can be achieved through plan design and credit/pricetag strategies
which encourage employees to voluntarily make benefit elections
beneficial to themselves as well as the County. Through the
delivery system of flexible benefits, employees are encouraged to
select benefits that are the best value for themselves. These
selections also benefit the County and encourage patterns of
behavior that save the County money. The specific strategies to
control future costs include:
• Creating new options;
• Minimizing duplicate medical coverage;
• Changing elements of plan design in providing medical
benefits;
• Carving prescription drugs out of the medical benefit and
offering a separate election; and
• Introducing reimbursement accounts.
The savings projections relative to plan participation which follow
are based on anticipated benefit selection patterns experienced by
other similarly situated organizations. Actual employee migration
could vary and therefore actual savings cannot be calculated until
employees make elections upon implementation of the proposed
flexible benefit plan. However, the first-year savings identified
relation to the 2,000 full-time non-represented employees is
believed to be realistic and conservative.
Estimated Savings
Medical $616,000
Prescription Drug 142,000
Dental 40,000
Reimbursement Account Contributions 20.000
Projected Gross Savings $818,000
Estimated Costs
Consultant Implementation
In-House Implementation (Primarily
Computer Services Existing Staff)
Total Estimated Costs
NET SAVINGS
ATTACHMENT A
PERSONNEL COMMITTEE RESOLUTION
ATTACHMENT B
LETTERS TO WYATT AND COMERICOMP
•nn••n•n•...• nn•n•Yn•n••
mMINN=ININIMIIn
L. BROOKS PArTERSON. OAKLAND CCL!'47e E
COU.1TV micmIGAN
DEPART'OENT OF PERSONNEL
June 11, 1993
C V'rCe.?",! UZI Ci,teC7Zr
Ms. Cindy Greenlaw
The Wyatt Company
28411 Northwestern Highway
Suite 500
Southfield, Michigan
48034
Dear Ms. Creenlaw:
As you are aware, on Wednesday, June 23 at 2:30 P.M. Wyatt is scheduled to
appear before the Fringe Benefit Review Committee. Wyatt is one of two
finalists in this committee's selection of a consultant to recommend to the
Board of Commissioners as part of the implementation of a flexible benefit
program. At this stage we are less interested in generalities inasmuch as
we recognize that both firms involved have a solid reputation.
As we compare the two proposals, some specific issues arose regarding each
that we feel if addressed would be helpful in our decision making process.
I will itemize these below.
- Your proposal does not address how flexible spending accounts will be
administered. Please be prepared to provide in some detail how you would
recommend these be handled. If you are recommending they be handled in
house and the County prefers not to, what outside vendor would you
recommend to accomplish this task? What is the cost on a dollar per
participant per month basis? Can you make your proposal include the
flexible spending account administration through another party and at what
cost? We may not be interested in piece-mealing implementation of this
program.
- Please bring with you samples of communications materials that would be
similar to what you are recommending for use at Oakland County. This would
include notices, workbooks, selection forms and the like. Specifically,
what is included in the $26,900 for communications on page 25?
- For the telephone enrollment you indicated a cost of $4,600 for the
telephone charges. If you feel this figure can be further refined please
do so. In other words, can we rely on it with some confidence? Can you
make the figure fixed in the contract?
- You have indicated you would be available for up to 10 employee meetings
(page 10). Although this is not specifically mentioned on page 25, it
would appear it is included in the fee quoted. How many meetings and how
many days would you anticipate are required, based on your experience?
What do you see as your role in the meetings? If more than 10 meetings are
necessary what is the additional cost per day and/or meeting?
EXECUTIVE OFFICE BUILDING • 12C0 N TEEGRAPPI RD DEPT 440 • porynkc MI 48341.0440
— 18 - • •
(313) 358-C!
Sincerely,
afr71C214
Dean Shackelford
Supervisor-
Employee Benefits
Ms. Cindy Greenlaw
June 11, 1993
Page 2
- It looks as though the January 1, 1994 implementation date may not be
realistic based on where we are in the selection process, the possible
implementation of a new payroll system and other factors. Please be
prepared to present a revised implementation schedule based on an
implementation date of April 1, 1994.
- Please be prepared to address second year costs in some detail paying
particular attention to what the costs would be as new groups are added
(e.g. union represented employees) particularly if they are added
sporadically (e.g. as contracts are settled) and in varying numbers. What
if the employees covered increased from the initial 2,000 to the total work
force of 3,600?
- Please be prepared to address the question of the County performing the
enrollment tasks at some future point and how that might be accomplished
most effectively (e.g. recommended software package, programming own system
etc.).
These are some of the specific items we would like addressed at the
meeting. It will be useful if the persons who would be assigned to the
project could be present. Please let me know if you have questions.
cc Fringe Benefit Review Committee
OAKLAND, L. BROOKS PATTERSON OAKLAND COLN7e
CWT .( MiCNIGAN
CEPARTMENt OF PERSONNEL C v.rce,r Luz Drevor
June 11, 1993
Hr. Hark Toth
Comericomp Benefits Consulting
6070 W. Maple Road, Suite 200
West Bloomfield, Michigan
48322 -2277
Dear Mr. Toth:
As you are aware, on Wednesday, June 23 at 1:00 P.M. Comericomp is
scheduled to appear before the Fringe Benefit Review Committee. Comericomp
is one of two finalists in this committee's selection of a consultant to
recommend to the Board of Commissioners as part of the implementation of a
flexible benefit program. At this stage we are less interested in
generalities inasmuch as we recognize that both firms involved have a solid '
reputation.
As we compare the two proposals, some specific issues arose regarding each
that we feel it addressed would be helpful in our decision making process.
will itemize these below.
- Please bring with you samples of communications materials that would be
similar to what you are recommending for use at Oakland County. This would
include notices, workbooks, selection forma and the like. Specifically,
what is included in the $8,250 "allowance" for communications on page 30?
How solid is the $8,250? Understandably some members of the committee are
concerned that this be clarified. If you feel the allowance is inadequate
for a full communication program, pleas, have available at the meeting a
firm figure you could propose in lieu of an allowance.
- Pursuant to our phone conversation, for the telephone enrollment you
indicated a cost of $8,000 plus approximately $2,000 for the telephone
charges? Please refine this as much as possible so that the figures can be
relied on with some confidence. Can you make these figures firm in the
contract?
- You have indicated an additional charge of $1,200 per day to attend
employee meetings. How many meetings and how many days would you
anticipate are required? In other words, based on your experience, what
kind of total will the $1,200/day become? What do you see as your role in
the meetings?
• - It looks as though the January 1, 1994 implementation date may not be
realistic based on where we are in the selection process, the possible
implementation of a new payroll system and other factors. Please be
prepared to present a revised implementation schedule based on an
implementation date of April 1, 1994.
EXECUTIVE OFFICE BuILCIING . 1200 N TELEGRAPH RD DEPT 440 • PONTIAC MI 454. 1-0440 • 013) 8584530
- 20 -
Sincerely,
Dean Shackelford
Supervisor-
Employee Benefits
Mr. Mark Toth
June 11, 1993
Page 2
- Please be prepared to address second year costs in some detail paying
particular attention to what the costs would be as new groups are added
(e.g. union represented employees) particularly if they are added
sporadically (e.g. as contracts are settled) and in varying numbers. What
if the employees covered increased from the initial 2,000 to the total work
force of 3,600?
- Please be prepared to address the question of the County performing the
enrollment tasks at some future point and how that might be accomplished
most effectively (e.g. recommended software package, programming own system
etc.).
These are some of the specific items we would like addressed at the
meeting. It will be useful if the persons who would be assigned to the
project could be present. Please let me know if you have questions.
cc Fringe Benefit Review Committee
February 10, 1994
FISCAL NOTE (MISC. 193181)
BY: FINANCE COMMITTEE, JOHN P. MCCULLOCH, CHAIRPERSON
IN RE: DEPARTMENT OF PERSONNEL - FLEXIBLE BENEFIT PLAN -
RECOMMENDATION FOR IMPLEMENTATION - MISCELLANEOUS
RESOLUTION #93181
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
Pursuant to Rule XI-G of this Board, the Finance Committee has
reviewed Miscellaneous Resolution #93181 and finds:
1) The recommended Flexible Benefit Plan is scheduled for
implementation July 1, 1994 and would initially cover
approximately 2,000 non-represented employees.
2) The following six benefits are recommended for inclusion
in the plan with two or more choice levels for each
benefit: Medical, Prescription Drug, Dental, Vision,
Group Life, and Accidental Death and Dismemberment.
Medical, Prescription Drug and Dental would each have the
option of "No Coverage". Additionally, reimbursement
accounts for Health Care and Dependent Care would be
included in the program.
3) The resolution authorizes the Department of Personnel to
execute a professional services contract not to exceed
$146,726 with ComeriCOMP to provide services necessary
for program implementation.
4) Projected gross savings for the first twelve months are
$818,000, with net savings of $641,000 after consultant
and in-house implementation costs.
5) Funds for this purpose are available in the Fringe
Benefit Fund (Fund #73500) in the 1994-1995 Biennial
Budget.
FINANCE COMYTTEE ; Al
I:\WAYN\FLEXBEN.FN
Resolution #93181 February 10, 1994
Moved by Gosling supported by Garfield the resolution be adopted.
AYES: Powers, Price, Schmid, Taub, Wolf, Aaron, Crake, Dingeldey, Douglas,
Garfield, Gosling, Huntoon, Jensen, Johnson, Kaczmar, Kingzett, Law, McCulloch,
Miltner, Moffitt, Oaks, Obrecht, Palmer, Pernick. (24)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the
foregoing resolution is a true and accurate copy of a resolution adopted by the
Oakland County Board of Commissioners on February 10, 1994 with the original
record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and afixed the seal of the
County of Oakland at Pontiac, Michigan this 10th day qIJebriy 1994.
Lyglib D. Allen, County Clerk