The City of Allen became partially self-funded in January 2000. Since then the City has generated a Request for Proposal every three to five years to ensure we maintain the best coverage possible for our employees at the best cost. Through the competitive bidding process, the City initially selected United Healthcare in 2009 and in the 2012 bid process, the City again elected United Healthcare to serve as the Third-Party Administrator.
The City's Third Party Administrator (TPA) reviews and processes all claims for health, dental, prescription and vision. The City of Allen received five proposals from companies desiring to be our Third-Party Administrator. Of these, Blue Cross-Blue Shield and Cigna were too high rendering them non-viable options. The other three finalists included Aetna, Continental Benefits, and United Healthcare.
After reviewing the presentations and the analysis from our Benefit Consultant, the staff recommends the City remain with United Healthcare as the Third Party Administrator. United Healthcare had the best proposal with regard to costs and service levels. United Healthcare continues to provide a broad network of physicians, network discounts and medical management. Furthermore, United Healthcare offered a 28% reduction in the annual administrative fees guaranteed for four years. This represents a reduction from $245,144 to $176,070 for costs for being the TPA for the City of Allen.
Finally, staff recommends electing Alliance Work Partners as our Employee Assistance Provider (EAP). This company is currently providing EAP services and will continue to provide the assessment, counseling and referral of all mental health and chemical dependency care for our benefits.
These two contracts will be for a term of three years with the option to renew for two additional, one-year terms. It is important to note that City Council will be asked to consider the contract for Stop-Loss Insurance in July.