Placement: Consent Agenda
Action Requested: Motion / Vote
title
Award Contract No. 20210075 Between the City of Port St. Lucie and Blue Cross Blue Shield of Florida, Inc. d/b/a Florida Blue for Healthcare Coverage
body
Submitted By: Natalie Cabrera, Director, Human Resources
Strategic Plan Link: The City’s Mission to be financially responsible.
Summary Brief (Agreements/Contracts only)
1. Prepared by: City of Port St. Lucie, Gehring Group, and Florida Blue.
2. Parties: City of Port St. Lucie and Blue Cross Blue Shield of Florida, Inc. d/b/a Florida Blue
3. Purpose: Award of contract between the City of Port St. Lucie and Florida Blue.
4. New/Renewal/Modified: Renewal with modifications to terms.
5. Duration: Five (5) year contract term (10/1/21-9/30/26).
6. Benefits to Port St. Lucie: Phenomenal health coverage, increased benefits, and better incentive programs available to City employees with the least financial impact to the City.
7. Cost to Port St. Lucie (Annual and Potential): Administrative Fees will increase incrementally over the 5 year term of the Contract. The total Administrative Fee expenditure over the 5 year term will amount to $3,713,415.00 broken down as follows: (1) $716,717.00 in FY 21-22; (2) $743, 213.00 in FY 22-23; (3) $743, 213.00 in FY 23-24; (4) $743, 213.00 in FY 24-25; and (5) $767,059.00 in FY 25-26. The Wellness Initiative expenditure over the 5 year term will amount to $375,000.00 ($75,000.00) per year. Additionally, effective October 1, 2020, enhanced prescription terms were negotiated with Florida Blue’s prescription benefit management vendor, Prime, that generates enhanced claims savings to the City’s self-funded plan. The enhanced terms increase the guarantees for the discount off the average wholesale price (AWP) and increased rebate that is passed through to the City. Over three (3) years, this is estimated to save the City approximately $2.125 million in prescription costs. Please note, savings referenced are in terms of three (3) years as, due to the quickly changing landscape of pharmacy, prescription guarantees never exceed three (3) years.
Presentation Information: City Staff and Gehring Group will be available to answer any questions the Council may have.
Staff Recommendation: Move that the Council approve the contract with Florida Blue in substantially the same form as attached.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve the contract with Florida Blue in substantially the same form as attached.
2. Move that the Council provide staff direction.
Background: The existing Contract between the City of Port St. Lucie and Florida Blue, Contract No. 20100076, shall terminate as of September 30, 2021. Gehring Group conducted a comprehensive comparable entities benchmark analysis evidencing that Florida Blue was the recent lowest bidder in comparable jurisdictions and offered the best terms and conditions for the best cost. On March 22, 2021, the City Council approved to waive the bidding for good cause shown, pursuant to Section 35.04(c) of the Code of Ordinances, and authorized the City to negotiate a new agreement with Florida Blue, Contract No. 20210075.
Issues/Analysis: City staff have worked in conjunction with the City’s agent, Gehring Group, and Florida Blue to negotiate the terms and conditions of a contract with Florida Blue for the period commencing October 1, 2021 and ending September 30, 2026.
Financial Information: The Administrative Fees for the 5 year term of the contract, totaling $3,713,415.00, will be allocated to Fund 605-1900-549350BCBSF. The Wellness Initiative fees for the 5 year term of the contract, totaling $375,000.00, will be allocated to Fund 605-6220-548000. No early termination fees shall apply.
Special Consideration: N/A
Location of Project: N/A
Attachments: Contract between the City of Port St. Lucie and Blue Cross Blue Shield of Florida, Inc. d/b/a Florida Blue; Contract No.: 20210075; Enhanced Prescription Terms with Prime (Effective October 1, 2020).
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 6955
Legal Sufficiency Review:
Reviewed by Ella M. Gilbert, Deputy City Attorney. Approved as to Legal form and sufficiency by James D. Stokes, City Attorney.