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COUNCIL MEMORANDUM <br /> #2006-08 <br /> DATE: August 30, 2006 <br /> MEMO TO: Honorable Mayor Paul Osborne and City Council <br /> FROM: Steve City Manager <br /> Jerry Bau , sistant City Manager � <br /> Ron Neufeld, Director of Financial Management �� <br /> SUBJECT: Health Insurance Plan Study <br /> SUMMARY RECOMMENDATION: Attached is a resolution authorizing approval of <br /> the letter of en�agement for services from Segal Company regarding a study of the City <br /> of Decatur's group health insurance program. Staff recommends that the study be <br /> authorized for the "Funding Analysis" and "Claims Audit" portions of the services that <br /> are being offered. <br /> BACKGROUND: Since June of this year, City Council has sought to retain a consultant <br /> to undertake a study of the current administration of the City's group health insurance <br /> program. On August 21, 2006, representatives of the Segal Company appeared before <br /> Council in study session to describe the scope of work the company could provide to the <br /> City for this study. Subsequently, the Segal Company submitted the attached letter of <br /> engagement, offering to complete a "funding analysis", "evaluation of current vendors" <br /> and"claims audit" of the health insurance program. <br /> Of the three components, the funding analysis and the claims audit were services sought <br /> in the City's original request for proposals (RFP) issued on June 14, 2006. The fee <br /> quoted for these services in the Segal proposal is $41,550 (if 90 claims are audited). The <br /> remaining component, the evaluation of current vendors, was a service not originally <br /> requested in the RFP, but mentioned in the Sega1 representatives' presentation to City <br /> Council on August 21, 2006. The cost for this additional service is $16,000, bringing the <br /> total fees for the proposal to $57,550. <br /> Staff recommends that Council authorize only those components of the study that were <br /> originally itemized in the request for proposals, namely the funding analysis and the <br /> claims audit. Evaluation of the city's current vendors is outside the scope of the original <br /> inquiry, is an additional financial burden, and is not recommended to be included in the <br /> study because it could prove to be problematic as regards the employee benefits question. <br /> 1 <br />