Consulting and Actuarial Services Agreement with Segal Company
. .
CITY OF DUBUQUE, IOWA
MEMORANDUM
June 2, 1999
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
Human Services Manager Randy Peck is recommending renewal of an agreement
with the Segal Company for actuarial and consulting services related to health
insurance issues. The Health Care Committee concurs in the recommendation.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MCVM/j
Attachment
cc: Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Randy Peck, Human Services Manager
CITY OF DUBUQUE, IOWA
MEMORANDUM
May 27, 1999
TO: Michael C. Van Milligen, City Manager
FROM: Randy Peck, Personnel Manager (pf
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, 1999. 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 $22,000. This fee has been
in effect for two years. The Segal Company is proposing a one-year agreement,
effective July 1, 1999, with an annual fee of $23,200. $22,000 has been
budgeted for Fiscal Year 2000 for this purpose. Sufficient funds are available in
the Health Insurance reserve to pay for the additional cost.
Corporation Counsel Barry Lindahl has reviewed the agreement. The Health Care
Committee has also reviewed the agreement and they concur in my
recommendation.
I recommend that the agreement be approved as presented. The requested action
is for the City Council to pass a motion approving the agreement and authorizing
you to sign the agreement. If you have any questions, please feel free to call.
RP/dd
f.HE SEGAL COMPANY
6300 S. Syracuse Way
.Iite 200
,jewood, Colorado
111-6722
303-714-9900
FAX: 303-714-9990
April 6, 1999
Mr. Randy Peck
Human Services Manager
City of Dubuque, Iowa
City of Dubuque City Hall
50 West 13th Street
Dubuque, Iowa 52001-4845
Re: Consulting and Actuarial Services
Dear Randy:
.
We are pleased to submit for your consideration this letter outlining the continuing consulting
and actuarial services which we are prepared to render to the ~City of Dubuque. The terms of our
retainer are also included in this letter.
General Consultation
As consultant and actuaries for the City of Dubuque, the on-going regular services which we
would provide to the City are summarized below.
1. Consultation
We will be available for consultation on any aspects of the benefit plan's operation
including 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 Reports
We will prepare for you an annual report analyzing claims experience, benefits paid,
contributions, administrative expenses, gross and net cost of insured benefits, net cost of
any insured coverages and other relevant aspects of the Plan.
.
All-lIlta Bdston Chil.'ago Cleveland Denver Edmonton Hartford
;'\iL'\\ Orl~.\l\S New YlJrk Phoenix San Francisco Seattk Toronto
Houston Los Angeles l\linllt'apolis
\Vashingtoll. D.C. West Palm Beal:h
~
'1fC
~[ultinati(lnal Group of Actuarit's and Consultants: Amsterdam Brussels
Hamburg Lausannt.' L~mdon :\klhoume Mexico City Oslo Paris
April 6, 1999
. Page 2
This report also includes a projected income and expense budget based on an analysis of
prior experience and known or anticipated factors affecting future operations. Together
with an evaluation of the Plan's reserve position, this budget serves as a guide to financial
and benefit planning decisions as well as establishing annual contribution rates for all
self-funded health benefits.
Interim financial reports will be provided for the self-funded health plans which will
allow the City to monitor the performance of these plans.
In 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
pl~ns.
3. Benefit Changes
We will provide advice and then take appropriate action as authorized by the City in
assisting with implementation of any benefit changes including revision in premium and
Plcjn recordkeeping procedures, master policy certificates and booklet amendment or
mddifications.
I
I
.
4.
Insurance Company/Service Provider Negotiations
As authorized 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 Support
We will be available for consultation with the City, as requested, with regard to routine
change in forms and procedures and general recordkeeping, in 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, from a non-legal standpoint.
6.
Trends in Legislation, New Benefits, Plan Design
.
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 legislation or regulations that occur after the effective date of this retainer generally
.
.
.
April 6, 1999
Page 3
will be treated as supplementary service, at an additional fee, based on our regular time
charge rates.
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 drug plans. Suggested
COBRA rates will also be established.
In consideration of these general on-going consulting services, our annual fee would be $23,200
payable in quarterly installments. Travel, lodging and meal expenses associated with required
meetings with the City will be reimbursed. Payment will be due within sixty (60) days of the
billing.
Other Services
The above consulting services do not catalog all of the detailed matters which may arise in the
cO~.lfse 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,
I
time-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 supplementary
consulting services which may be required by the City.
< Detailed analysis of and compliance with new legislation or regulations.
< Litigation or lawsuits.
< Drafting of completely revised documents after the initial document.
< Comprehensive plan redesign or cost restructuring.
< Negotiations with providers regarding specific discount arrangement.
< Any services not specifically set forth in the retainer.
< Securing bids for benefit programs or administration
<
Claim utilization analysis.
.
.
.
April 6, 1999
Page 4
< Flexible benefits plan design and implementation.
< Actuarial studies other than the current Iowa Chapter 509 A requirements.
The above services are not free-standing with the exception of General Consultation. Any of the
other services would require at least a retainer for General Consultation services.
We suggest that this agreement run for a period of one year from July 1, 1999 to June 30, 2000
and that it be renewed automatically for additional one year periods unless we or you give sixty
(60) days written notice prior to June 30th of each successive year that this agreement is to be
terminated.
The Segal COrrpany agrees to procure and rraintain 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
f1jw~r:SJ~
By:
Debra K. Gassen
dkg:mth
cc: William F. Robinson, Jr.
Doreen Rael
(;/J Jell
Date! /
Ci ty Manager
Title
102171102249.00 I
.
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 liability has not been reduced by paid or reserved claims at
the time of issuance of policy or certificate.
4. The Se~al Company 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:
.
The Segal Company 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.
GERi"It=I@7\mECiE::'~:~gJ~;~~~!:I!
A.R.S. Inc. of N.Y.
Two World Trade Center, 104th Floor
New York, New York 10048-1096
I
r--------- ----------- --------
I fffl~~NY A Underwriters at Lloyd IS
COMPANIES AFFORDING COVERAGE
INSURED
fffl~~NY B
The Segal Company (Western States), Inc.
One Park Avenue
New York, New York 10016
fffl~~NY C
fffl~~NY D
fffl~~NY E
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED_ NOTWITHSTANDING ANY REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
~ TYPE OF I~~:RANCE ---- P~:~Y-~::~-E-:------- P~AL{~~J~~g~E p~~~y(~~it~T----- LIMITS
GENERAL LIABILITY GENERAL AGGREGATE S
COMMERCIAL GENERAL LIABILITY
_J CLAIMS MADE CJ OCCUR.
OWNER.S & CONTRACTOR.S PROTo
PRODUCTS-COMPIOP AGG.
PERSONAL & ADV. INJURY
S
S
S
EACH OCCURRENCE
FIRE DAMAGE (Anyone fire) S
MED EXPENSE (Anyone person) S
AUTOMOBILE LIABILITY
---I ANY AUTO
ALL OWNED AUTOS
SCHEDULED AUTOS
HIRED AUTOS
NON.OWNED AUTOS
GARAGE L1ABIUTY
COMBINED SINGLE
LIMIT
S
AND
I
I
I
I
Liabi11ty
, BODILY INJURY
(Per Person)
1---------. --
I BODILY INJURY
; (Per Accidenl) S
1___________ ----------- -.---- -----
I PROPERTY OAMAGE
I
I EACH OCCURRENCE
j"AGGREGATE-
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S
s
EXCESS LIABILITY
UMBRELLA FORM
OTHER THAN UMBRELLA FORM
S
S
A
Professional
9624 751
I
14/15/1999 ~/15/2000
I
I
STATUTORY LIMITS
EACH ACCIOENT
. DISEASE-POLICY LIMIT
to;sEASE-E;:CH EMPLOYEE
WORKER'S COMPENSATION
EMPLOYERS' LIABILITY
S
S
S
OTHER
$5,000,000
DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLESISPECIAL ITEMS
.]~~~tmJ,PA!E.:H.9kt>,Ff!:::m
City of Dubuque
City Managers Office
ity Hall
West 13th Street
Dubuque, Iowa 52001-4864
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SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO
MAIL ~ DAYS WRITIEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE
LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR
LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES_
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..........................--------...
DATE1MM/iiD/YY). .
... 5/05/99
THIS CERTIFICATE IS ISSUED AS A MAHER OF INFORMATION
ONL Y AND CONFERS NO RIGHTS UPON THE CERTIFICATE
HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
AL TER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
COMPANIES AFFORDING COVERAGE
BWD GROUP LIMITED
3000 MARCUS AVENUE
CB 5028
LAKE SUCCESS NY 11042
(516) 327-2700
INSURED
COMPANY
A
ATLANTIC MUTUAL INS.
COMPANY
B FEDERAL
COMPANY
~ CENTENNIAL INSURANCE
Segal Company, Inc.
John M. Piepoli, Mgr Gnl Acct.
One Park Avenue
New York, NY 10016-5895
THIS IS TO CERTIFY THA T THE POLICIES OF INSURANCE LISTED BELOW HA VE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICA TED,NOTWITHST ANDING ANY REQUIREMENT, TERMOR CONDITIONOF ANY CONTRACT OR OTHER DOCUMENTWITHRESPECTTO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MA Y PERT AIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION
L TR DATE (MM/DD/YY) DATE (MM/DD/YY)
A GENERAL LIABILITY
A X COMMERCIAL GENERAL LIABILITY
CLAIMS MADE W OCCUR
OWNER'S & CONTRACTOR'S PROT
432301626
422300005
12/31/98
12/31/98
12/31/99
12/31/99
NY
A AUTOMOBILE LIABILITY 299502393 VA 12/31/98 12/31/99
A X ANY AUTO 315337107 MA 12/31/98 12/31/99
A ALL OWNED AUTOS 745750219 TX 12/31/98 12/31/99
A SCHEDULED AUTOS 432301626 12/31/98 12/31/99
HIRED AUTOS 422300005 NY 12/31/98 12/31/99
NON. OWNED AUTOS
GARAGE LIABILITY
ANY AUTO
A EXCESS LIABILITY 432301626
B X UMBRELLA FORM (99) 79664559
OTHER THAN UMBRELLA FORM
C WORKERS COMPENSATION AND 401523218 CA
EMPLOYERS' LIABILITY
C 401711752 ADS
THE PROPRIETORI INCL WDAC80144696 MA
D P ARTNERSIEXECUTlVE
OFFICERS ARE: EXCL
OTHER
12/31/98
12/31/98
12/31/99
12/31/99
11/19/98
12/31/98
3/16/99
11/19/99
12/31/99
3/16/00
DESCRIPTION OF OPERATIONSILOCATIONS/VEHICLES/SPECIAL ITEMS
Workers Compensation operations In California
LIMITS
GENERAL AGGREGATE $ 2,000,000
PRODUCTS.COMP/OP AGG $
PERSONAL & ADV INJURY $ 1,000,000
EACH OCCURRENCE $ 1,000,000
FIRE DAMAGE (Anyone rire) $ 1,000,000
MED EXP (Anyone person) $ 5,000
COMBINED SINGLE LIMIT $
1,000,000
BODILY INJURY $
(Per person)
BODIL Y INJURY $
(Per accident)
PROPERTY DAMAGE
AUTO ONLY. EA ACCIDENT $
OTHER THAN AUTO ONLY:
EACH ACCIDENT
AGGREGA TE
EACH OCCURRENCE
AGGREGATE
10,000,000
10,000,000
100,000
500,000
100,000
EXPIRATION DATE THEREOF, THE ISSUING COMPANY Will. ENDEAVOR TO MAIL
30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT,
BUT FAILURE TO MAIL SUCH NOTICE SHAll. IMPOSE NO OBLIGATION OR LIABILITY
OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHORI~nE /7/ 'Vftl?J 503764
.'::':m..}::m.~:~t4~cbijpQAXTi6ijdijMF
CERTIFICATE: 017/001/ 00192
City of Dubuque
City Managers Office
City He II
50 W. 13th Street
Dubuque, IA 52001-4864
.........1...................................
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