Recommendation: Approval is requested to approve a one year extension of the annual contract for benefits manager with Northwestern Benefits Corporation of Georgia, beginning June 1, 2014 through May 1, 2015.

Background: The three year contract with Northwestern Benefit Corporation ended May, 2014. After consultation with the City Manager, the Human Resources Director requested to extend the contract one additional year, rather than administering a new RFP at this time. There are several reasons for requesting the one year extension:

1. The City was just getting the Health and Wellness Center started and Northwestern was intimately involved in the process. We did not want to lose this continuity.
2. The City was working diligently to control spiraling health insurance costs, and Northwestern was again intimately involved in redesigning our healthcare plan.
3. Major changes were happening with the Affordable Care Act (ACA) that impacted health insurance. Again, Northwestern was involved in assisting the City to be compliant with the recent ACA laws.
4. The former Human Resources Director, Tom Barron, retired in March 2013, which would have been the time to begin working on the new specifications for an RFP. Due to the personnel transition, it was not a good time to conduct an RFP.

Analysis: The City has invested significant productive resources in transitioning responsibilities to a benefits manager that continues to strengthen control over our multi-million dollar benefits investment. Northwestern has performed well during the past three years of the contract. They have provided excellent benefits management service to the CCG, our employees and retirees and to the Retirees’ Health Benefits Committee. During the past three contract year periods, Northwestern has performed well in all areas, improving our open enrollment processes, maintaining tighter controls over our benefits carriers, provided timely information about benefits issues, provided an improved on-line benefits enrollment and management system, assisting with implementation of employee Health and Wellness Center, and provided guidance on healthcare reform implementation.

Financial Considerations: There is no additional cost to the City for contracting with Northwestern, as payment for services will continue to be from commissions.

Projected Annual Fiscal Impact Statement: Although an exact number cannot be calculated, continuing to utilize a benefits manager is expected to generate a continued positive financial impact.

Legal: Authorization of Council to extend the contract with Northwestern is required.

Recommendation/Actions: The City Manager, Human Resources Director, Finance Director and Internal Auditor recommend the proposed contract extension with Northwestern.