Inter-Departmental Correspondence

Human Resources Department



May 24, 2010


June 8, 2010







Honorable Board of Supervisors


Donna Vaillancourt, Human Resources Director
Peter Bassett, Benefits Manager


Agreement with Benesyst for Benefits Administration System



Adopt a Resolution authorizing the:

A) President of the Board to execute a two-year agreement with Benesyst to provide a Benefits Administration System for the term of June 1, 2010 through May 31, 2012 in an amount not to exceed $961,848; and

B) Human Resources Director or the Director's designee to execute contract amendments which modify the County's maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.



On September 15, 2009, the Board approved long-term budget balancing strategies to eliminate the General Fund structural budget imbalance by Fiscal Year 2013. The strategies adopted by the Board included reviewing gaps in existing administrative systems and exploring system integration and increased efficiencies.

Results of a Benefits Operational Review conducted by an external consultant in 2008 indicated the need for a separate system for tracking and monitoring benefits enrollments, changes and costs. The following year, a Human Resource Information System (HRIS) Needs Assessment was conducted which identified critical weaknesses in benefits administration, including: inadequate financial controls, lack of integration between pension and payroll systems, and insufficient dependent eligibility monitoring.

Within the guidelines of the Board’s budget balancing strategies, and in an effort to increase administrative efficiencies, integrate systems, and improve customer service, the County conducted a formal Request for Proposals (RFP) for a Benefits Administration System earlier this year.



A committee made up of representatives from the County Manager’s Office, Human Resources, Controller’s Office, Information Services, and SamCERA reviewed proposals and ranked each one based primarily on the following criteria: system capabilities, public sector experience, system ease of use, strength of financial controls, ability to integrate retiree and active benefits, and fees. Based on these criteria, the committee is recommending the selection of Benesyst. Benesyst has the most user-friendly system, dedication to customer service, and ability to administer the County’s complex retiree health eligibility rules. Benesyst is also able to offer discounted pricing as it is the County’s current COBRA and Flexible Spending Account (FSA) administrator.

The Benefits Administration System will offer the following features: an online tool for employees to enroll, review, and make changes to their benefits; integrated administration of active and retiree benefits; consolidated premium billing, reconciliation, and accounting of active and retiree benefit costs; annual benefit statements for employees and retirees; and dependent verification and audit.

The RFP committee believes that the selection of Benesyst is in the best interests of the County as its Benefits Administration System will:

    Effectively manage health plan eligibility to control costs;

    Increase financial controls to reduce excess premium paid to insurance carriers;

    Help employees and retirees increase their understanding and appreciation of County benefits;

    Integrate active and retired employees benefits information thereby increasing efficiencies and reporting capabilities.

The contractor has assured compliance with the County's Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits.

County Counsel has reviewed and approved the Resolution and Benesyst’s standard agreement as to form. The insurance has been reviewed and approved by Risk Management.

Approval of this Agreement contributes to Shared Vision 2025 of a Prosperous Community by providing a Benefits Administration System that will increase administrative efficiency and help to effectively manage the County’s benefits costs.


Performance Measures:


FY 2009-10

FY 2010-11

Accuracy and timeliness of benefits enrollments, changes and terminations



Savings generated from dependent audit


$300,000 to $600,000

Employee satisfaction with benefits system





The two-year agreement total is $961,848. There is no impact to the net County cost associated with this agreement as costs are fully covered by the Benefits Trust Fund. The cost is $5.23 per active employee and retiree per month and is guaranteed for the 24-month contract period. Costs are partially offset by contributions from one of the County’s health insurance carriers. Remaining costs are offset by savings generated from a dependent audit, savings generated as a result of a new contract with the County’s broker/consultant for health and welfare benefits, increased financial controls, and reduced internal automation costs. The County will realize an annual savings between $300,000 to $600,000 from improved monitoring of health plan eligibility which will reduce benefit costs for departments. 1



General description of RFP

Benefits online system for monitoring and tracking benefit enrollments and changes, benefits eligibility, and cost for active and retiree populations


List key evaluation criteria

System capabilities, public sector experience, system ease of use, ability to integrate retiree and active benefits, and fees


Where advertised

RFP was posted on County website and distributed to eight vendors


In addition to any advertisement, list others to whom the RFP announcement was sent



Total number of RFP’s sent to prospective proposers



Number of proposals received



Who evaluated the proposals

Bob Adler, Controller’s Office

Peter Bassett, HR

Michael Bolander, CMO

Adrian Chi, ISD

Al David, ISD

Rey Guillen, HR

Scott Hood, SamCERA

Lisa Okada, HR

Belle Sierra, HR


In alphabetical order, names of proposers (or finalists, if applicable) and location

Benefit Coordinators Corporation (BCC)


Employee Benefit Specialists, Inc (EBS)



1 Industry experts have found that on average about 4 - 7% of covered dependents are actually ineligible for the plans in which they are enrolled (for example: ex-spouses, boyfriends, girlfriends, nieces and nephews, parents, grandparents, and friends’ children). Up until recently, the County has not requested documentation of dependent eligibility at the time of enrollment. Nor has the County conducted a full dependent audit. The County expects annual savings from the dependent audit to be between $300,000 to $600,000.