The city is switching administrators for its self-funded insurance program after Columbus Board of Works members brushed aside a different recommendation from its insurance committee.
The board of works voted to award a $118,000 contract to Dunn & Associates, the Columbus company that is administrator for Bartholomew County’s self-funded health plan. The board made the switch from SIHO Insurance Services of Columbus, which had the contract for about 10 years.
Board members Bob Sullivan, Jason Hyer and Mayor Kristen Brown voted Tuesday to make the change. Board member Bob Crider voted no, and Caleb Tennis was absent.
The city’s insurance committee, made up of insurance professionals, city employees and City Councilman Kenny Whipker, had approved a recommendation Monday asking the board to hire a consultant to examine all four proposals submitted from companies wishing to be administrator.
The reasoning behind that request is the only way to determine the lowest cost provider of the four companies was an analysis of the city’s claims for at least the past year, in comparison to what the four companies were offering.
Committee members estimated that evaluation from a consultant would cost $8,000 to $12,000, money the city could find in its insurance accounts, city attorney Jeff Logston said.
There have been no complaints about SIHO’s service, but the city decided to put out the request for proposals to get price comparisons, Logston said in an earlier meeting.
Proposals were submitted by:
Dunn & Associates, Columbus, $118,008, with a 100 percent pharmacy discount and rebates passed back to the city.
SIHO Insurance Services, Columbus, $199,056 with a pharmacy rebate offset of $47,520 that would be subtracted from that total.
Unified Group Services, Anderson, $153,120.
Benefit Administrative Services, Chicago, $141,920 with 100 percent of pharmacy discounts and rebates passed on to client.
During the board of works meeting, Logston clarified that the SIHO proposal included a $5 charge per employee per month for insurance coverage after an employee leaves the job that should not have been included in the comparisons. That brought SIHO’s proposal down to $172,656, with another $47,520 to be subtracted for the pharmacy rebate offset, for a final number of $125,136, Logston said.
Crider said his research showed it was important to do a full claims analysis to learn what could be different among the discounts that were being offered by the companies.
Hyer said he did his own research, reaching out to city employees and talking to billing specialists about the two Columbus companies. His research showed the discounts were about the same, he said. His decision boiled down to employee viewpoints on customer service that led him to vote for the switch to Dunn.
Columbus Fire Chief Dave Allman said he had heard some employees were confused in navigating the insurance process with SIHO and preferred to go back to Dunn & Associates, which had the contract before it was awarded to SIHO.