Item - 2023.GG4.13

The General Government Committee recommends that:

1.  City Council grant authority to the Controller to enter into an agreement with Green Shield Canada for the provision of Category A and E Services – Extended Health Care and Dental Benefits and Wellness Portal; having met all requirements as it applies to the specific Categories of Service within the nRFP, for the provision of the administrative and underwriting services for employee benefits plans on the basis that:

a. the initial term of the agreement will be for five years, effective January 1, 2024 and ending December 31, 2028;

b. the administration fees will be fixed for the entire term of the initial five year agreement; and

c. the agreement will result in City expenses of approximately $43.67 million net of all applicable taxes and charges ($44.44 million net of HST recoveries) for administration fees, premiums and stop loss pooling charges over the initial five-year contract.

2. City Council grant authority to the Controller to enter into an agreement with The Manufacturers Life Insurance Company (Manulife) for the provision of Category B and C Services - Group Life Insurance, Long Term Disability and Accidental Death & Dismemberment, Line of Duty Death (LODD) Insurance Administration/Insurance Benefits; having met all requirements as it applies to the specific Categories of Service within the nRFP, for the provision of the administrative and underwriting services for employee benefits plans on the basis that:

a. the initial term of the agreement will be for five years, effective January 1, 2024, and ending December 31, 2028;

b. the Long Term Disability administration fees will be fixed for the entire term of the initial agreement;

c. the insured rates will be fixed for the first three years of the agreement with the final 2 years of the agreement the insured rates will be determined by applying appropriate weight to the claims experience under the agreement on the basis of the number of employees and the years of experience; and

d. the agreement will result in City expenses of approximately $81.82 million net of all applicable taxes and charges ($83.26 million net of HST recoveries) for insurance premiums and administration fees over the initial five-year contract; and

3. City Council grant authority to the Controller to enter into an agreement with Telus Health Solutions Inc (Telus) for the provision of Category D Services Employee Family Assistance Programs; having met all requirements as it applies to the specific Categories of Service within the nRFP, for the provision of an Employee Family Assistance Program (EFAP) on the basis that:

a. the initial term of the agreement will be for five years, effective January 1, 2024, and ending December 31, 2028;

b. the program fees will be fixed for the first three (3) years of the agreement;

c. for the final 2 years of the agreement charges will be determined by applying appropriate weight to the utilization experience based on the number of employees accessing the services over the initial three years of the contract; and

d. the agreement will result in City expenses of approximately $8.26 million net of all applicable taxes and charges ($8.40 million net of HST recoveries) for program fees over the initial five-year contract; and

4.  City Council grant authority to the Controller to exercise the options to extend for up to two (2) additional separate one (1) year extensions, from January 1, 2029 to December 31, 2030, on the basis that:

a. the maximum two-year extension of the Green Shield agreement will result in City expenses of approximately $24.63 million net of all applicable taxes and charges ($25.07 million net of HST recoveries) for administration fees, premiums and stop loss pooling charges; and

b. the maximum two-year extension of the Manulife agreement will result in City expenses of approximately $37.63 million net of all applicable taxes and charges ($38.30 million net of HST recoveries) for administration fees and premiums; and

c. the maximum two-year extension of the Telus agreement will result in City expenses of approximately $3.58 million net of all applicable taxes and charges ($3.64 million net of HST recoveries) for program fees.

The purpose of this report is to provide information on the results of a Negotiated Request for Proposal (nRFP) Doc3518771019. for the provision of administrative and underwriting services for employee benefit plans for the City of Toronto, (including Public Health) and the Agencies and Corporations along with Toronto Police Services (TPS) and Toronto Transit Commission (TTC) included in its benefits administration.  The Agencies and Corporations (ABC’s) which provide benefits to employees under the City's umbrella are as follows:

• The Board of Governors of Exhibition Place;
• TOLive;
• Toronto Zoo;
• Toronto Public Library; and
• Community Centres and Arenas.

A strategic consolidated procurement approach, in the form of a Negotiated Request for Proposals (nRFP) was adopted to increase efficiencies and leverage economies of scale resulting in the procurement of innovative administration of employee benefits that provide optimal plan member experience that is cost-effective and aligns with the organization’s strategic approach and vision.

Upon conclusion of this procurement, finalized Master Service Agreement (MSA), Statement of Work (SOW), and Service Level Agreement (SLA) with defined outcomes, key performance measures, and penalties were realized prior to the start of the contract period. This is a significant achievement as typically the MSA and SLA are not finalized until after the start of the contract period.

This report requests authority to enter into agreements with the recommended proponents below, as the existing agreements are expiring at the end of 2023:

• Green Shield Canada – Categories A and E Services:  Extended Health Care (EHC) and Dental Benefits and Wellness Portal Administrative Services Only (ASO)/Insurance Benefits and,
• The Manufacturers Life Insurance Company (Manulife) – Categories B and C Services:  Group Life Insurance (GLI), Long-Term Disability (LTD) Administration and Accidental Death & Dismemberment (AD&D) Insurance, Line of Duty Death (LODD) and,
• Telus Health – Category D: Employee Family Assistance Program (EFAP)

The City partnered with Toronto Police Services Board (TPSB) and the Toronto Transit Commission (TTC) ("Stakeholder") in the issuance of a joint nRFP for the provision of benefit plan administration and underwriting services. The nRFP focused on the selection of a benefits carrier(s) with strong systems, reporting, fraud detection, diversity and cyber security processes in place, and the ability to mirror our existing benefit plan designs.

The recommended proponents' submissions met all mandatory technical requirements as outlined in the nRFP. All three of the successful proponents also worked with the Office of the CISO, and Deputy Chief Technology Officer on the provision of required documents for cyber risk, AODA and privacy assessments. The Office of the CISO will issue a Risk Treatment Plan (RTP) encompassing all risks found and recommendations for remediation. This report provides an overview of the joint process and the estimated cost impact for all Stakeholders.

The agreements to administer the plans for the City of Toronto and the relevant agencies and corporations over a five-year term contract with two (2) one-year extension options will result in City expenses of approximately $133.74 million net of all applicable taxes and charges  ($136.10 million net of HST recoveries) for the provision of administrative and underwriting services for the City's employee benefit plans including administration fees, insured premiums, stop loss pooling charges and Employee Family Assistance Plan (EFAP) program fees over the initial five-year contract term; and approximately $65.85 million net of all applicable taxes and charges  ($67.00 million net of HST recoveries) for the provision of administrative and underwriting services for the City's employee benefit plans including administration fees, insured premiums, stop loss pooling charges and EFAP program fees if both option years are exercised.

This agreement provides the flexibility to amend benefits as a result of Council direction and/or collective bargaining during the life of the contract.

Staff of the TTC and TPSB will be reporting to their Boards separately on the nRFP and the impacts of their agreements.