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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- !;Emff:?:f:?:.:;;::?::::f???:f}}}? 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 $5,000,000 DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLESISPECIAL ITEMS .]~~~tmJ,PA!E.:H.9kt>,Ff!:::m City of Dubuque City Managers Office ity Hall West 13th Street Dubuque, Iowa 52001-4864 ---.--.-.--........................ .... .. ..................... ...........-................... ............................... :)P.~fls:p.lq.:fibN ..........'...........-.........-.......... . ........ .......... .... ..'.......... ..,....,.. ...... ........,........ .,......,......... ................. . . . . . . . . . . . . .. ... . .:' ... :.:...:.:.:.::::~~~~~~:~:~:~:::;~~~~~:~~~:/~~!~~~t?t))?tttft~~))~~~~;::;:; :.:.:.:-:.:.:.:.:.:-:.:.:.:.:.:.:.:.::-:.:.:.:.:.:.:.:.:...............:.:.:.:.;.:.:.:.:.:.:.:.:.:.:.:.........................; ... 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SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL ~ DAYS WRITIEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES_ :~.<__.:-_.:.,,_:_I_,:,.:-.:,.:,_:.:..,.:. ,p_,:,.:.:.ESE.N..-A..~.:,:,.::,"',:-.,:..,:.,...-..:":>':':.:'.",<,<_,.".,,-_,-.-, Ri chard Sautner ......,.,.,.,....-..-..........:::~~A#Qaq.@$.MQBATI9.fPl~~: '.' . ........,..'.'.....:-:.......'.-.:,..;,..'.....-.;.---...'.....'.....'.....'.......................................-.-.......'.-..,'_......-.-...-.-...:..,..-...-.-.........'.....'.........'.', ..'...............'.....'.....'.....'.....'...........-.......'.....'.'...'.'...". ...'.-...'..,..'.........................................'.............................-............................ .......................... ~t!ii.mt;lcl...~..."tr:t!u~C}u.ul.A:Bul..}I.tr:.~}I...~llnA{*.~e..}U}} :-:.:-:.:-:v.:n<l{ II: :"'#,\.~~~I:>:.:.:.:.:.>"':E(-:-:-:.>:-:.. ,18, .. . :,,: :~;lt)I<':-:-:' :.:.:. :1:lI:g:":n.,..:rt~~. -.",'.:.:.:.:.:.:.:.:.:.:.:.:.:. :i!ii:..~.9.9Rq~..;;:>>.::...,.,.,.,...,"',."..,),"}""",)"""")\)\"",.,(,>:\""},,,,....'.'.,.{.................,.,',',".,.,"','...'..:.:'::.'.'....,.,...":".",.,}\.",.,.,.,."::,.;..".,.",,.,),.,,...:: ,\.,..:::.::.::,...::.\.:.,.,.:.."....:,:,.,.,:,:...',.,."'...,,/,,,,'.',,::}::,:::::,:....::,:,....:::::,:.....:,:,:.:}:::;:::;:::.::::.:::::::: ......PRoouceif.. ..........................--------... 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................................... AtdFlP25~$(M~5)..' ........................ ......................... ........................ ......................... ::::::::::::::.:::::::::::::::::::::::::;:;:;:;:;:::;:;:;:;:;:;:;:;:;:;:;:;:;:::::::