STRATEGIC PRIORITY: Core
AGENDA DATE: June 11, 2025
COUNCIL DISTRICT(S): N/A
DEPARTMENT: Office of Procurement Services
EXECUTIVE: Donzell Gipson
______________________________________________________________________
SUBJECT
Title
Authorize a three-year service contract, with two one-year renewal options, for medical and health-related services for all active employees and retirees for the Department of Human Resources - Blue Cross Blue Shield of Texas, a Mutual League Company, most advantageous proposer of six - Not to exceed $41,837,526.99 - Financing: Employee Health Benefits Fund (subject to annual appropriations)
Body
BACKGROUND
This action does not encumber funds; the purpose of a service contract is to establish firm pricing for services, for a specific term, which are ordered on an as needed basis.
This service contract will provide medical and health-related services for all active employees and retirees for the Department of Human Resources. The service contract will provide City employees and retirees with appropriate health plan administration and related insurance services. Additional services will include claims processing administration, stop loss insurance, medical management, provider network access, large-case management, and 24-hour customer services.
The following core services include:
• Medical Administrative Services (Active & Pre-65 Retirees)
o Clinical and Mental Health Programs/Disease Management
o Wellness & Communications Support
• Medicare Advantage Plans (Post-65 Retirees)
• Stop Loss Coverage
• Medical/Admin Costs include Medical + Stop Loss Premiums + Fully Insured Retiree Medicare Advantage Premiums less any credits
The City currently insures approximately 13,000 employees and has approximately 2,000 pre-65 retirees, and 3,000 post-65 retirees totaling approximately 18,000 eligible employees for the City’s medical plan benefits.
The City pays approximately 60 percent of the health care plan cost with employees and retirees paying the remaining 40 percent of the cost. The benefits program is structured on a calendar-year basis. During the annual enrollment held in September or October each year, employees and retirees may elect plan changes that will become effective on January 1st of the following year. The City currently uses Workday as the eligibility system.
A five-member committee from the following departments reviewed and evaluated the qualifications:
• Budget and Management Services (1)
• Department of Human Resources (1)
• Department of Sanitation Services (1)
• Office of Procurement Services (2)*
*The Office of Procurement Services evaluated cost, local preference, and the Business Inclusion and Development Plan, if applicable.
The committee selected the successful respondents on the basis of demonstrated competence and qualifications under the following criteria:
• Cost and pricing structure 30 points
• Expertise 25 points
• Technical match to requirements 10 points
• Functionality match to requirements 15 points
• Business Inclusion and Development Plan 15 points
• Local Preference 5 points
As part of the solicitation process and in an effort to increase competition, the Office of Procurement Services used its procurement system to send out email notifications to vendors registered under relevant commodity codes. To further increase competition, the Office of Procurement Services uses historical solicitation information, the Internet, and vendor contact information obtained from user departments to contact additional vendors.
On November 10, 2015, the City Council authorized a living wage policy that requires contractors to pay their employees a “living wage” rate as established annually by the Massachusetts Institute of Technology Living Wage Calculator for Dallas County by Resolution No. 15-2141. The calculated living wage during the solicitation process of this contract is $22.05; the selected vendor meets this requirement.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On, June 24, 2020, the City Council authorized a three-year Health and Welfare Benefits and related Services Third Party Administrator Contract, with two one-year renewal options, for health and welfare benefits, disease management, wellness and communications support, pharmacy benefit management services, hospital audit functions, COBRA, Health Savings Account and Flexible Spending Account administration; a fully-insured Post-65 Retiree Medicare Advantage-Prescription Drug Coverage Contract; a two year application, with one one-year renewal option, for stop loss coverage with Blue Cross Blue Shield of Texas, (4) a three-year service contract, with two one-year renewal options, for a fully insured dental plan with Delta Dental Insurance Company, and a three-year service contract, with two one-year renewal options, for a fully insured vision plan with Davis Vision, Inc. by Resolution No. 20-1005.
The Government Performance and Financial Management Committee will be briefed by memorandum regarding this matter on June 10, 2025.
FISCAL INFORMATION
|
Fund |
FY 2025 |
FY 2026 |
Future Years |
|
Employee Health Benefits Fund |
$13,945,842.33 |
$13,945,842.33 |
$13,945,842.33 |
Note: The City provides a contribution toward the cost of medical and pharmacy plans, with the remainder funded by participating employees and retirees. Contribution levels vary based on the selected plan, coverage tier, and applicable eligibility group.
M/WBE INFORMATION
In accordance with the City’s Business Inclusion and Development Policy adopted on September 23, 2020, by Resolution No. 20-1430, as amended, the M/WBE participation on this contract is as follows:
|
Contract Amount |
Procurement Category |
M/WBE Goal |
|
$41,837,526.99 |
Other Services |
3.50% |
|
M/WBE Subcontracting % |
M/WBE Overall % |
M/WBE Overall Participation $ |
|
3.50% |
3.50% |
$1,464,313.44 |
|
• This contract meets the M/WBE goal. |
|
• Blue Cross Blue Shield of Texas, a Mutual League Company - Local; Workforce - 10.20% Local |
PROCUREMENT INFORMATION
Method of Evaluation for Award Type:
|
Request for Competitive |
• Utilized for high technology procurements, insurance procurements, and other goods and services |
|
Sealed Proposal |
• Recommended offeror whose proposal is most advantageous to the City, considering the relative importance of price, and other evaluation factors stated in the specifications |
|
|
• Always involves a team evaluation |
|
|
• Allows for negotiation on contract terms, including price |
The Office of Procurement Services received the following proposals from solicitation number BGZ24-00026116. We opened them on January 10, 2025. We recommend the City Council award this service contract in its entirety to the most advantageous proposer.
*Denotes successful proposer
Proposers Address Score
*Blue Cross 1001 East Lookout Dr. 87.76
Blue Shield of Texas, a Richardson, TX 75082
Mutual League Company
Aetna Life Insurance 151 Farmington Ave. 83.25
Company Hartford, CT 06156
UnitedHealth Care 9700 Health Care Ln. 62.77
Services, Inc. Minnetonka, MN 55343
Meritain Health, Inc. 300 Corporate Pkwy. 28.25
Buffalo, NY 14226
Frontier Health, LLC 119 West Van Burren Dr. Non-responsive
Suite 10
Harlingen, TX 78550
Wellness for the Workplace 2541 Clearlake Dr. Non-responsive
Grand Prairie, TX 75054
OWNER/EXECUTIVES
Blue Cross Blue Shield of Texas, a Mutual League Company
Maurice Smith, President
James Springfield, Senior Vice President
Claire York, Vice President