Consulting and Actuarial Services Agreement with The Segal Company
CITY OF DUBUQUE, IOWA
MEMORANDUM
November 29, 2000
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Consulting and Actuarial Services Agreement With The Segal Company
Personnel Manager Randy Peck is recommending approval of the renewal agreement with the
Segal Company for actuarial and consulting services.
I concur with the recommendation and respectfully request Mayor and City Council approval.
I"!
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1ij~, "l'!; It
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Randy Peck, Personnel Manager
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CITY OF DUBUQUE, IOWA
MEMORANDUM
October 26, 2000
TO: Michael C. Van Milligen
City Manager
Randy Peck (J[">
Personnel Manager \ 0
FROM:
SUBJECT: Consulting and Actuarial Services Agreement With The Segal Company
I have received the renewal agreement with the Segal Company for actuarial
and consulting services. The proposed agreement is for one year and will go into
effect on July 1, 2000. Services provided by the Segal Company will continue to
include monitoring the performance of our indemnity, HMO, life, weekly disability,
prescription drug, dental and worker's compensation insurance programs. Services
also will include consultation, analysis of our claims experience, implementation of
benefit changes, negotiations with insurance companies and third party
administrators, and preparation of insurance plan documents.
The current agreement provides for an annual fee of $23,200. This fee has
been in effect for one year. The Segal Company is proposing a one year agreement,
effective July 1, 2000, with an annual fee of $24,360. This amount has been
budgeted for Fiscal Year 2001 for this purpose.
Corporation Counsel Barry Lindahl has reviewed the agreement. The Health
Care Committee has also reviewed the agreement and they concur in my
recommendation. The requested action is to have the City Council pass a motion
approving the agreement and authorizing you to sign the agreement. If you have any
questions, please feel free to call.
SEP-15-2000 16:23
THE SEGAL CO.
P.02
. tHE SEGAL COMPANY
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April 6. 2000
Mr. Randy Peck
Human Services Manager
City of Dubuque. Iowa /'
City of Dubuque City Hall
50 West 13th Street
Dubuque. Iowa 520014845
Re: COII.Su1dnC aDd Actuarial Services
Dear Randy:
--
We are pleased to submit for your consideralioD Utis letter outlining L1e continuing consulting
and actuarial services which we are prepared to render to the City of Dubuque. The terms of our
retainer are also include~ in this letter.
General Consultation
As consultant and actuaries for the City of Dubuque. the on.going regular services wbich we
would provide to the City are summarized below.
1. CRosultation
We will be available for consultation on any aspects of the benefit plan's opcl'lltion
~luding claims. reserves, and insurance company performance. as well as the plan's
overall progress and development.
We will be available to the staff for consultation on changes to be made in the plan of
benefits and eligibility, underwriting provisions, administration. and other relevant
matterS.
2. Annual R~ns
We will prepare for you an annual report analyzing claims c:xperienc~ benefits paid.
eonaibutions. administrative expenses. gross and net cost of insured benefi~net cost of
any insured coverages and other relevant aspects of the Plan.
'Ibis report also includes a projected income and expense budg~t based on au analysis of
prior experience and known Or anticipaIed factors affecting future operations. Toaethcr
with an evaluation of the Plan's reserve position. this budget serves as a guide to finaDcial
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, .
SEP-15-2000 16:23
THE SEGAL CO.
P.03
Mr. Randy Peck
City of Dubuque. Iowa
April 6. 2000
Page 2
and benefit planning decisions as well as establishing annual contribution rates for all
self-funded health benetits.
Interim financial reports will be provided for the self-funded health plans which will
allow the City to monitor the pertormance of these plans.
[n addition. we will provide the City the necessary actuarial information for it to comply
with current Iowa Chapter 509 A requirements for self-funded governmental benefit
plans.
3. Benetit Chane:es
We will provide advice and then take appropriate action as authorized by the City in
assisting with implementation of any henetit changes including revision in premium and
Plan recordkeeping procedures. master policy cenificates and booklet amendment or
modifications.
4. Insurance Comnanv/Service Provider Negotiations
As authomed by the City, we will negotiate with the City's life. stop-loss and self-funded
Workers Compensation insurance companies to obtain appropriate rate adjustments. We
will also review the City's service provider renewal proposals. In the event that an
insutance company's proposed annual retention, provider fee schedules, or administration
fees are not consistent with its projection or if the renewal does not appear justified by
experience we will attempt to obtain more favorable results for the City.
5. Administration Sunnon
We will be available tor consultation with the City, as requested. with regard to routine
change in forms and procedures and general recordkeeping, ir.. terms of efficiency and
cost. . It is noted that compliance with the recordkeeping requirements of laws or
regulations are matters subject to the advice of legal counsel. However. we shall be
available for consultation in this regani as well as. from a non-legal standpoint.
SEP-15-2000 16:24
THE SEGAL CO.
P.04
',.
Mr. Randy Peck
City of Dubuque. Iowa
April 6. 2000
Page 3
6. Trends in lelZislation. New Benetits. Plan DesilZn
By means of our periodic Newsletter and special advisory reports, we shall continue to
keep you apprised of new developments in the employee benefits field that may bear
upon your planning and policy decisions. However, specific technical compliance with
new leaislation or regulations that occur after the effective date elf this retainer generally
will be treated as supplementary service. at an additional fee, based on our regular time
chal-ge rates.
'. 7. Sclf.Funded Benefits
We will establish appropriate: annual contribution rates and ~rves recommendations for
the City's self-funded disability. dental. medical and prescription drua plans. Sugaested
COBRA rates will also be established.
In consideration of these general on-going consulting services. our annual fee woul $24.360
payable in quanerly installments. Travel. lodging and meal expenses 3SSOciated ~q
meetings with the City will be reimbursed. Payment will be due within sixty (60) da
billing.
'r'
Other Services
The above consulting services do not catalog all of the detailed matters which may 2Irise in the
course of your benefit programs annual operation that require consulting services. Also. it is
difficult to predict in advance whether your benefit programs will be involved in complicated.
timc.consuming special problems. and if so. to what extent.
If our assistance involves services which are beyond. but incidental to the aforementioned
services. we would render such services within the scope of each listed service. If. on the other
hand. the occasion requires the expenditure of time not anticipated within the retainer. we would
proceed only after consultation with the City as to the services and fees.
In addition to those items referred to earlier. some further examples follow of supplemenwy
consulting services which may be required by the City.
< Detailed analysis of and compliance with new legislation or re&ulations.
< Litigation Or lawsuits.
< Drafting of comnletelv revised documents after the initial document.
< Comprehensive plan redesign or cost restrUctUring.
< Negotiations with providers reearding specific discount arraneement.
SEP-15-2000 16:24
THE SEGAL CO.
P.05
. ..
Mr. Randy Peck
City of Dubuque. Iowa
April 6. 2000
Page 4
< Any services not specifically set forth in the retainer.
< Securing bids for bene tit programs or administration.
< Claim utilization analysis.
< Flexible benefits plan desien and implementation.
< Actuarial studies other than the current Iowa Chapter 509 A requirements.
The above services arc: not free.standing with the ex~ption of General Consultation. Any of the
other services would require :It least a retainer tor General Consultation services.
We suggest that this agreement run tor a period of one year tram July 1. 2000 to June 30, 2001
and th:u it be rene:wed autoniatica1ly fOr additional. one year periods unless we or you give sixtY
(60) days wrinen notice prior to June 30th of each successive year that this agreement is to be
tenninated.
The Segal Company agrees to procure and maintain insurance as set forth in the attached
insurance schedule:.
Approval of this letter of services C&ll) be indicated by the appropriate signatures in the spaces
provided below and returning one original for our files.
Sincerely,
THE SEGAL COMPANY
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By:
Debra K. Gassen
lIar
Attachme:nt
Accepted on behalf of the City of Dubuque, Iowa:
Signature
Date
Title
I 01694J02149.oo I
TOTAL P. 0S
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INSURANCE SCHEDULE
INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES
1 . Any policy of insurance or certificate of insurance required hereunder shall
be with a carrier authorized to do business in Iowa and a carrier that has
received a rating of A or better in the current Best's Rating Guide.
2. Any policy of insurance required hereunder shall provide for a thirty (30) day
notice to the City of any material change or cancellation of the policy prior to
its expiration date.
3. The Segal Company shall have its insurance agent or company
certify in writing that any policy of insurance required herein with an
aggregate limit of liibility has not been reduced by paid or reserved claims at
the time of issuance of policy or certificate.
4. The S~ial Comnany shall furnish copies of the following policies to
the City, with limits not less than the following, or greater if required by law.
COMMERCIAL GENERAL LIABILITY:
General Aggregate Limit
Products-Completed Operation Aggregate Limit
Personal and Advertising Injury Limit
Each Occurrence Limit
Fire Damage Limit (anyone occurrence)
Medical Payments
$2,000,000
$1,000,000
$1,000,000
$1 ,000,000
$ 50,000
$ 5,000
OR
Combined Single Limit
Medical Payments
$2,000,000
$ 5,000
Umbrella or Excess Liability *
$
Coverage is to include: occurrence form, premises/operations/products/completed
operations coverage, independent contractors' coverage, contractual liability, broad
form property damage, personal injury, City of Dubuque named as an additional
insured with thirty (30) days written notice of change or cancellation.
PROFESSIONAL LIABILITY STATEMENT:
Th~ S~lZal Comnanv shall furnish a certificate of insurance showing ~
professional liability limits with limits of not less than $1,000,000 during the term
of the project.
*To be determined on a case-by-case basis.
.
SEP-15-2000 16:23
THE SEGAL CO.
P.02
-
THE SEGAL COMPANY
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April 6. 2000
Mr. Randy Peck
Human Services Manager
City of Dubuque. Iowa ./
City of Dubuque City Hall
50 West 13th Street
Dubuque. Iowa 520014845
Re: CODSlIluDC aDd Actuarial Services
Dear Randy:
We are pleased to submit for your consideration this letter outlining L'le continuing consulting
and actuarial services which we are prepared to render to the City of Dubuque. The terms of our
mainer are also included in this letter.
-
General ConsulWion
As consultant and actuaries for the City of Dubuque. the on.going regular services wbich we
would provide to the City arc summarized below.
1. G9tlsultation
We will be available for consultation on any aspects of the benefit plan's opaation
inc:luding claims. reserves, and insurance company perfonnance. as well as the plan's
overall progress and development.
We will be available to the staff for consultation on changes to be made in the plan of
benefit! and eligibility, underwriting provisions, administration. and other relevant
maaers.
2. Annual R~ns
We will prepare for you an annual repon analyzing c:1aims experience. benefits paid.
conaibutions. administrative expenses. gross and net cost of insured benefits. net cost of
any insured coverages and other relevant aspects of the Plan.
This repon also includes a projected income and expense budget based on au analysis of
prior experience and known Or anticipated factors affecting future operations. Together
with an evaluation of the Plan's reserve position. this budget sc:rves as a guide to finaDcia1
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N... 0Ite.0 N_ ...... ""-ill 5'- l,ol&& So. I'-. SaId. T_ ~ D.c:. __ ~ __ . . c: D_ ~ ~ ~ ...... .......Ooy QUa ....
SEP-15-2000 16:23
THE SEGAL CO.
P.03
Mr. Randy Peck
City of Dubuque. iowa
April 6. 2000
Page 2
and benefit planning decisions as welt as establishing annual contribution rateS for all
self-funded health benetits.
Interim financial reports will be provided for the self-funded health plans which will
allow the City to monitor the pertormance of these plans.
[n addition. we will provide the City the necessary actuarial information for it to comply
with currene Iowa Chapter 509 A requirements for self-funded governmental benefit
plans.
3. Benefit Chanlles
We will provide advice and then take appropriate action as authorized by the City in
assisting with implementation of any henetit changes including revision in premium and
Plan recordkeeping procedures. master policy cenificates and booklet amendment or
modifications.
4. Insurance Comnanv/Service Provider Negotiations
As authorRed by the City, we will negotiate with the City's life. stop-loss and self-funded
Workers Compensation insurance companies to obtain appropriate rate adjustments. We
will also review the City's service provider renewal proposals. In the event that an
insurance company's proposed annual retention. provider fee schedules, or administration
fees are not consistent with its projection or if the renewal does not appear justified by
experience we will attempt to obtain more favorable results for the City.
5. Administration SUDDon
We will be available for consultation with the City. as requested. with regard to routine
change in forms and procedures and general recordkeeping, ir_ terms of efficiency and
cost. . It is noted that compliance with the recordkeeping requirements of laws or
regulations are matters subject to the advice of legal counsel. However. we shall be
available for consultation in this regard. as well as. from a non-legal standpoint.
SEP-15-2000 16:24
THE SEGAL CO.
P.04
Mr. Randy Peck
City of Dubuque. Iowa
April 6. 2000
Page 3
6. Trends in leaislation. New Benetits. Plan DesilZn
By means of our periodic Newsletter and special advisory reports, we shall continue to
keep you apprised of new developmen~ in the employee benefits field lhat may bear
upon your planning and policy decisions. However. specific technical compliance with
new leaisla1ion or regulations that occur after the effective date elf this retainer gcaerally
will be treated as supplementary service. at an additional fee. based on our regular time
charie rate!.
. 7. Self.Funded Benefits
We will establish appropriate annual contribution rates and reserves recommendations for
the City's self-funded disability, dental. medical and prescription drui plans. SugiC$lCd
COBRA rates will also be established.
In considaation of these general on-goins consulting services. our annual fee waul S24.360
payable in quanerly installments. Travel. lodging and meal expenses 3SSCIciated ~
meetings with the City will be reimbursed. Payment will be due within sixty (60) cia
billing.
Other Servic:es
The above consulting services do not catalog all of the detailed matters which may arise in the
course of your benefit programs annual operation that ~re consulting services. Also. it is
difficult to predict in advance whether your benefit programs will be involved in complicated.
timc-<:onsuming special problems. and if so. to what extent.
If our assistance involves services which are beyond.. but incidentaL to the aforementioned
services. we would render such services within the scope of each listed service. If. on the other
hand.. the occasion requires the expenditure of time not anticipcued within the retainer. we would
proceed only after consultation with the City as to the services and fees.
In addition to those items referred to earlier. some further example! follow of supplementary
consulting seMCCS which may be required by the City.
< Detailed analysis of and compliance with new legislation or tqU1ations.
< Litigation Or lawsuits.
< Drafting of comnletelv revised documents after the initia! document.
< Comprehensive plan redesign or COSt restrUctUring.
< Negotiations with providers re~arding specific discount arr&n&ement.
..
SEP-15-2000 16:24
THE SEm... CO.
P.ffi
Mr. Randy Peck
City of Dubuque. Iowa
April 6. 2000
Page 4
< Any services not specifically set forth in the retainer.
< Securing bids for benetit programs or administration.
< Claim utilization analysis.
< Flexible benefits plan desien and implementation.
< Actuarial studies other than the current Iowa Chapter 509 A requirements.
The above services arc not free.standing with the exception of General Consultation. Any of the
other services would require :11 least a relainer for General Consultation services.
We sugSest that this agreement run tor a period of one year tram July 1. 2000 to June 30. 2001
and that it be renewed automitically for additional one year periods unless we or you give sixty
(60) days wrincn notice prior to June 30th of each successive year that this agreement is to be
terminated.
The Segal Company agrees to procure and maintain insurance as set forth in the attached
insurance schedule.
Approval of this letter of services can be indicated by the appropriate signatures in the spaces
provided below and returning one original for our files.
Sincerely.
THE SEGAL COMPANY
i)k~~#~~'
By:
Debra K. Gassen
lIar
Attachment
l-<j 5 IOd
Date:
c '0 fV!U'vI.ty-L./
Title
I 0I690L'02249.oo I
TOTl=L P.11lS
INSURANCE SCHEDULE
INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES
1 . Any policy of insurance or certificate of insurance required hereunder shall
be with a carrier authorized to do business in Iowa and a carrier that has
received a rating of A or better in the current 8est's Rating Guide.
2. Any policy of insurance required hereunder shall provide for a thirty (30) day
notice to the City of any material change or cancellation of the policy prior to
its expiration date.
3. The Sel<tal Company shall have its insurance agent or company
certify in writing that any policy of insurance required herein with an
aggregate limit of lie'bility has not been reduced by paid or reserved claims at
the time of issuance of policy or certificate.
4. The S~ial Comnanv shall furnish copies of the following policies to
the City, with limits not less than the following, or greater if required by law.
COMMERCIAL GENERAL LIABILITY:
General Aggregate Limit
Products-Completed Operation Aggregate Limit
Personal and Advertising Injury Limit
Each Occurrence Limit
Fire Damage Limit (anyone occurrence)
Medical Payments
$2,000,000
$1,000,000
$1,000,000
$1,000,000
$ 50,000
$ 5,000
OR
Combined Single Limit
Medical Payments
Umbrella or Excess Liability *'
$2,000,000
$ 5,000
$
Coverage is to include: occurrence form, premises/operations/products/compieted
operations coverage, independent contractors' coverage, contractual liability, broad
form property damage, personal injury, City of Dubuque named as an additional
insured with thirty (30) days written notice of change or cancellation.
PROFESSIONAL LIABILITY STATEMENT:
Th~ S~lZal Comnanv shall furnish a certificate of insurance showing ~
professional liability limits with limits of not less than $1,000,000 during the term
of the project.
*'To be determined on a case-by-case basis.