A city of New Orleans purchasing evaluation committee today scored Unum the most qualified of nine bidders to take over as contractor for city employee life, dismemberment and accidental death insurance. The current contractor - The Hartford - was ranked sixth.
(The evaluation scores are based on a number of factors including whether a prospective contractor has offices in Orleans Parish - which Unum didn't score well on. Its local office is in Metairie - its willingness to meet city contract diversity goals by using certified Disadvantaged Business Enterprise (DBE) subcontractors, as well as quoted price and experience with other public employers.)
The committee was unable to vote to recommend Unum today after several members - including city Health Commissioner Dr. Karen DeSalvo and Deputy Mayor of Operations Michelle Thomas - had to leave early. Director of Finance Norman Foster said a meeting for the vote will likely take place in the next few days.
(Continued after the jump)
As readers may remember, Inspector General Ed Quatrevaux recently found a few problems with the current insurance plan. He recommended that the city issue a request for proposals (RFP) on the Hartford contract, which expires this year. Here are a just a few of the issues Quatrevaux found:
• The City overpaid for insurance by approximately $250,000 over a four-year period because the Risk Management Division failed to calculate the number of employees eligible for benefits accurately.
• The City paid more than $250,000 in commissions to two insurance agents.
• Death benefit claims were not filed for six of the twenty-one City employees who died between
January 1, 2009 and December 31, 2010
The first two of those appear to have been addressed in the current search process. Quatrevaux's office found that the city overpaid so much in large part because it was covering people who, he contended, were ineligible, mainly retirees. A new contract will only cover the city's 4,600 current full-time employees. As for the agent fees, from the RFP's scope of service section:
No commissions, bonuses or compensation of any form is to be paid to any producer, insurance agent, broker, salesman, etc.