Broward County Commission Regular Meeting
Director's Name: Stephen Farmer (Acting Director)
Department: Finance and Administrative Services Division: Human Resources
Information
Requested Action
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MOTION TO APPROVE Third Amendment to Agreement between Broward County and United Healthcare Services, Inc., for Administrative Management Services for Self-Insured Group Health Insurance Coverage and Benefits and Pharmacy Benefits Management Services, for Broward County Benefits Eligible Individuals, Request for Proposals (RFP) No. TEC2122482P1, extending the term of the agreement for three years beginning January 1, 2027, through December 31, 2029.
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Why Action is Necessary
In accordance with Broward County Administrative Code, Section 21.53, Duration of Contracts, a County contract shall not exceed five years in duration without the express approval of the Board.
What Action Accomplishes
Extends the current agreement term for County-subsidized and employee-paid coverage for Administrative Management Services for Self-Insured Group Health Insurance Coverage and Benefits and Pharmacy Benefit Management Services for Broward County Benefits Eligible Individuals for three calendar years.
Goal Related Icon(s)
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Previous Action Taken
None
Summary Explanation/Background
THE FINANCE AND ADMINISTRATIVE SERVICES DEPARTMENT AND THE HUMAN RESOURCES DIVISION RECOMMEND APPROVAL OF ABOVE MOTION.
On November 4, 2021 (Item No. 48), the Board approved the Agreement between Broward County and United Healthcare Services, Inc., for Administrative Management Services for Self-Insured Group Health Insurance Coverage and Benefits and Pharmacy Benefit Management Services for Broward County Benefits Eligible Individuals (RFP No. TEC2122482P1).
On September 19, 2024, the Director of Purchasing approved the First Amendment to the Agreement, exercising the first renewal term effective January 1, 2025, through December 31, 2025.
On October 30, 2025, the Director of Purchasing approved the Second Amendment to the Agreement, exercising the second renewal term effective January 1, 2026, through December 31, 2026, and modifying other terms of the Agreement in compliance with changes to state law.
This Item seeks to extend the Agreement for three calendar years, effective January 1, 2027, through December 31, 2029, with changes in terms, reductions in fees, and increased pharmacy discounts and rebates. Staff estimates projected cost savings of approximately $1.5 million in the first year from administrative fees. This is based on additional credits ($400,000) and pharmacy rebates and guarantees ($1.1 million). Estimated savings over the three-year period are $4.5 million.
In addition to the projected cost savings based on current plan designs, the introduction of an additional health network, NHP (Neighborhood Health Partnership), through United Healthcare, has the potential to save approximately $600,000 per year.
Exhibit 1 is the amendment to the Agreement. This exhibit contains information identified as confidential and exempt from the disclosure requirements of Chapter 119, Florida Statutes. Accordingly, such confidential and exempt information has been redacted from the publicly available versions of the attachments. Unredacted versions containing confidential and exempt information will be provided separately to the Board for its consideration.
Exhibit 2 provides further details on projected cost savings and the addition of a new health network. This extension will provide continuity of coverage, stability to the health and pharmacy plan and administrative cost savings to mitigate rising health and pharmacy costs.
Exhibit 3 summarizes the major changes reflected in the amendment.
Source of Additional Information
Allen Wilson, Director, Human Resources Division, 954-357-6090
Fiscal Impact
Fiscal Impact/Cost Summary
The source of funding for the County-subsidized and employee-paid Health Insurance Administration, Coverage and Pharmacy Insurance Administration is from the County Paid Employee Benefits Fund. By the actions listed in Exhibit 1, the projected cost will be reduced from $14.4 million to $12.9 million, a $1.5 million savings in the first year:
Administration Fees, Credits and Cost Reductions - 14% reduction
Rebates and Guarantees - 9.5% increase
Projected savings over three years are $4.5 million.
The projected annual cost savings of integrating a new health plan network is $600,000 per year, increasing annual savings to $2.1 million in first year and $6.3 million over the three-year period, which will help mitigate the overall cost increases the County is experiencing in the Employee Benefits Fund.
The estimated cost for health and pharmacy claims for Fiscal Year 2027 and plan design for NHP plan will be brought to the Board with the 2027 Health Funding item in the Fall of 2026.