SUBJECT
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Approve Agreements with Aetna for integrated medical and pharmacy benefits administration. (Estimated $62,000,000 recurring annual expense in the Employee Health Plan including estimated administrative costs of $1,600,000 per year)
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DESCRIPTION
Polk County Risk Management requested Procurement to solicit proposals from qualified firms for integrated medical and pharmacy benefits administration for the Board of County Commissioners and all five Constitutional Officers. The County has approximately 7,941 covered lives, which includes active employees, early retirees, spouses, and dependents.
While Aetna currently holds separate agreements with the County for both medical and pharmacy benefits administration, the County solicited to combine the services in the RFP to maximize potential savings.
The scope of services for medical administration includes but is not limited to:
• Medical plan administration
• Claims processing
• Health and disease management services, including behavioral health.
• COBRA administration
• Incentive plan administration
• Employee assistance program
The scope of services for pharmacy administration includes but is not limited to:
• Retail pharmacy network management
• Claims processing
• Mail service and specialty drug pharmacy
• Formulary management
Currently, the annual cost for medical is $48,400,000.00 and $12,000,000.00 for prescription cost (after rebates). In addition, we pay Aetna an annual fee for administration of the Medical Plan in the amount of $1,550,000.00 and $50,000.00 annually to administer the Pharmacy Benefit Plan.
These agreements are anticipated to save the County over the 3-year term versus our current contract by:
$8,900,000.00 savings in pharmacy cost
$800,000.00 in medical administrative fee holidays
$150,000.00 in pharmacy credits.
Request for Proposal (RFP) 23-097 was issued, and three pre-qualified vendors submitted proposals. On April 4, 2023, the Board approved the selection committee’s recommendation to enter into contract negotiations with Aetna. The attached agreements are the result of those negotiations.
The term of the agreements is for five years.
RECOMMENDATION
Request Board approve the agreements with Aetna for integrated medical and pharmacy benefits administration.
FISCAL IMPACT
Funds are available within the Polk County Employee Health Fund. The estimated annual expense of $62,000,000 includes claims, prescriptions, and administration of the plan. The administration portion of this cost is estimated at $1,600,000 per year, contingent on plan membership and the number of prescriptions.
CONTACT INFORMATION
Michael Guerrero
Senior Procurement Analyst
863.534.6716
michaelguerrero@polk-county.net