- Commissioners receive bids for an employee benefit consultant or representative
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By Myrna Trauntvein
Times-News Correspondent
Juab County Commissioners want to hire an Employee Benefit Consultant or Representative and advertised for bids for such a person. Those bids were opened at commission meeting on Monday, May 7, at 2:30 p.m.
Lynn Hansen, whose company was one of the bidders for the job, was on hand to answer questions about the terms the commission had advertised.
"In the request for proposals," said Hansen, "you said that you were interested in a consultant, broker or agent to assist you."
Hansen said he had discussed the proposal request with Mike Seely, county administrator.
The purpose of the commission's request for proposals is to enter into a contract with a qualified professional employee benefit consultant, broker or agent to assist Juab County in the management of its employee health insurance program.
The qualified consultant is to review and evaluate current plan designs and identify competitive options available to the county. Further, the selected consultant will provide strategic recommendations on an on-going basis for appropriate county-wide group health and welfare benefit plans.
"There is a difference in what an agent, a consultant and a broker do," said Hansen.
Agents get paid a commission by the insurance company. Consultants get paid a fee from the person or group signing the contract. This is an important distinction. Agents are legally obligated to work in the best interests of the insurance carrier they represent. Their compensation is a commission that is not subject to review or approval. Agents who refer to themselves as brokers, however, may be doing so in the context that they represent more than one insurance vendor rather than having a formal brokerage appointment.
When the buyer pays the premium to an insurance company, the insurer then pays the agency a commission on that premium, generally around 15 percent for a standard property and casualty policy. The agency ownership then distributes a "split" percentage to the agent for their compensation.
Agents of Record or Brokers are legally obligated to work in the best interest of the county. They receive a commission that is agreed upon by the county. The agent of record or broker often prepares request for proposal documents and helps to obtain proposals from insurance carriers. They then often assist in review of the proposals, conduct vendor interviews, assist with program implementation, conduct annual renewal negotiations, and often provide routine daily services that would often otherwise be provided by an agent of the insurance carrier.
As a consultant, a fee is paid that is mutually agreed to. That fee is all inclusive of the work, so regardless of the amount of money paid for insurance, the investment won't change. Consultants receive no remuneration from insurance agents or companies.
Consultants are legally obligated to the work in the best interests of the county and are usually compensated on a fee basis. The consultant should not have any other financial relationships with insurance carriers or other potential vendors. Consulting services may be expanded to include actuarial and/or legal work for assistance in managing partially self-funded programs or other alternative funding arrangements.
"A broker is paid by the carrier," said Seely. "A consultant has to be paid by the county up-front."
An insurance transaction has three players: the insurance company (insurer), the insurance agent, and the insurance buyer (insured).
The county RFP is designed to provide interested offerers with sufficient basic information to submit proposals meeting minimum requirements, but is not intended to limit a proposal's content or exclude any relevant or essential data. Offerers are at liberty and are encouraged to expand upon the specifications to evidence service capability under any agreement.
Juab County currently offers a fully-insured group health and welfare benefit program to employees of the county on a non-contributory basis.
Juab County currently employs approximately 72 employees who are eligible for benefits.
The preferred method of submitting a proposal is via hard copies, one original and five identical copies of the proposal.
The contract resulting from this RFP will be for a period of three to five years. The contract may be extended beyond the original contract period year-to-year at the county's discretion and by mutual agreement.
The contract may be canceled at any time within 30 days written notice from either Juab County or the agent/agency.
All pricing must be guaranteed for one year. Following the guarantee period, any request for price adjustment must be for an equal guarantee period, and must be made at least 30 days prior to the effective date. Requests for price adjustment must include sufficient documentation supporting the request. Juab County will be given the immediate benefit of any decrease in the market, or allowable discount.
"We will have to spend some time going over the proposals before we make a final decision," said Chad Winn, commission chairman.
He said that commissioners, the county attorney, the county clerk/auditor, and Seely, will all meet and review the proposals. Following that review, commissioners will be ready to announce a winner of the bid.
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