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City of Missoula, Montana Item to be Referred to City Council Committee Committee: Administration and Finance Item: Administrative Services Agreement between the City of Missoula and Allegiance Benefit Plan Management, Inc Date: September 9, 2010 Prepared by: Gail Verlanic, Human Resources Director Initiated by: Same Action Required: Approve the Mayor to sign the Administrative Services Agreement between the City of Missoula and Allegiance Benefit Plan Management, Inc for third party administration of medical, life and dental claims arising from the City's self-funded health benefit program. Recommended Motion: I move the City Council authorize the Mayor to sign the administrative services agreement between the City of Missoula and Allegiance Benefit Plan Management, Inc.. Timeline: Referral to committee: September 13, 2010 Committee discussion: September 15, 2010 Background and Alternatives Explored: Allegiance Benefit Plan Management has been the City of Missoula third party administrator (TPA) since the 1980's. Allegiance has not taken a rate increase since FY07. This is a two year agreement with a 3% increase for FY11. Financial Implications: The contract provides for a 3% increase in administrative fees. The rate per person will go from $16.25/person/month to $16.75/person/month a fifty cent increase per person. There are 486 plan participants. This results in a $2,916.00 increase for FY11 and no additional increase for FY12. Total Cost for FY10 = $94,770 Proposed Cost for FY11 = $97,686 Proposed Cost for FY12 = $97,686 Attachments: Administrative Services Agreement