City of Santa Clara logo

Legislative Public Meetings

Share to Facebook Share to Twitter Bookmark and Share
File #: 19-946    Version: 1 Name:
Type: Consent Calendar Status: Agenda Ready
File created: 8/15/2019 In control: Council and Authorities Concurrent Meeting
On agenda: 10/29/2019 Final action: 10/29/2019
Title: Action on Amendment No. 1 to the Agreement with Gallagher Benefit Services, Inc. to Facilitate Administration of the HealthInvest Health Reimbursement Arrangement in Support of the City's Voluntary Employee Beneficiary Association
Attachments: 1. Amendment No. 1 with Gallagher Benefit Services, Inc., 2. Professional Services Agreement with Gallagher Benefit Services
REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 1 to the Agreement with Gallagher Benefit Services, Inc. to Facilitate Administration of the HealthInvest Health Reimbursement Arrangement in Support of the City's Voluntary Employee Beneficiary Association

Report
BACKGROUND
On September 4, 2001, the City Council approved a resolution authorizing the establishment of a Voluntary Employees' Beneficiary Association (VEBA) as a mechanism to create a post-retirement Health Reimbursement Arrangement (HRA) as a benefit to City employees. The HRA is an employer funded account that employees may utilize post-retirement to pay for qualified medical expenses. Establishment of the VEBA required the execution of several service agreements to support the plan.
The service agreements included the administrative service agreement with A. W. Rehn & Associates, Inc. (Rehn), the trust agreement with Washington Trust Bank, and the benefits consulting agreement with the VEBA Service Group, LLC. On September 1, 2013, Gallagher Benefit Services, Inc. (Gallagher) replaced the VEBA Service Group, LLC as the benefit consultant. Effective January 11, 2019, Gallagher was selected to replace Rehn as the administrative services provider and the transfer of service from Rehn to Gallagher was effective May 1, 2019. Exigent circumstances resulted in the term of the service agreement with Gallagher only running through December 31, 2019.

DISCUSSION
Staff is proposing an amendment to the term of the service agreement with Gallagher in order to stabilize the administration of our HRA VEBA benefit program. The amendment will extend the current one-year agreement through June 30, 2023. There will be no rate increases in the amended period being proposed, which creates cost stability along with service continuity. The nature of the services provided to support an HRA VEBA are such that constant change in service providers creates a lack of efficiency and also in the effective service to empl...

Click here for full text