Agenda Item # 6
Columbus Consolidated Government
Council Meeting
April 14, 2009
Agenda Report # 374
TO: Mayor and Council
SUBJECT: Payroll Deduction Policy
INITIATED: Human Resources Department
Recommendation: Approve resolution adopting a new payroll deduction policy to
support the contract with the new benefits manager and rescinding Resolution
#172-88.
Background: In 1976 Council adopted Resolution No. 508-76 establishing policy
for payroll deductions, prohibiting deductions for insurance accounts with less
than 500 employees. In 1988 Council adopted Resolution No. 172-88 establishing
separate criteria for for-profit companies (500 employees) and not-for-profit
agencies (300 employees) and providing for the removal of companies/agencies
when the number of participating employees drops below the established criteria.
Analysis: The CCG wishes to hire a benefits management consultant to assist the
government in providing high value insurance and other employee benefits
products/programs to our employees. Although we anticipate significant cost
savings from the management activities provided by the consultants, we intend
to offset the consulting fees through direct placement of insurance and
benefits products by the consultant, with the resultant commissions applied as
a credit to the consulting and management fees. Through this arrangement we
anticipate offsetting a significant portion and perhaps all of the consulting
fees. For this arrangement to work, with the exception of current
grandfathered vendors, we must channel all future benefits offerings to
employees through the benefits manager. Current vendors will continue to enjoy
their grandfathered status and may continue to offer products/programs to CCG
employees through payroll deduction.
Legal: The Council must approve a resolution changing the current payroll
deduction policy.
Financial Considerations: The current health plan contract with Blue Cross and
the current life insurance contract with Houze and Associates will expire this
year. Under current methodology, a mandatory bid or RFP is required to replace
these contracts. Consultant estimates for conducting a health and life RFP
exceeded $250,000. By contracting with a benefits manager, we will experience
significant savings on the health/life acquisition process and at the same time
incorporate on-going active plan management that we anticipate will better
control future costs. The annual cost for these services is $99,000. The
recommended manager estimates commission offsets at $103,000, thereby
offsetting the full cost of their services.
Recommendation/Actions: Human Resources, Finance and Internal Audit recommend
approval of this resolution.
A RESOLUTION
NO.________
A RESOLUTION MODIFYING THE POLICY FOR EMPLOYEES PAYROLL DEDUCTIONS AND
RESCINDING RESOLUTION No. 172-88.
WHEREAS, Resolution No. 172-88 established a policy that payroll deductions
would not be implemented until at least 500 employees commit to deductions for
a for-profit company and at least 300 employees commit to deductions for
not-for-profit companies, agencies, or charities; and,
WHEREAS, Resolution No.172-88 also provided that companies or agencies
initially meeting the above criteria and if the number of employee?s payroll
deductions falls below the established criteria level, payroll deductions for
that company, agency, or charity are to be rescinded; and,
WHEREAS, the basis for this policy was to limit the number of deductions due to
space limitations on check stubs and to limit the city?s administrative costs
of processing deductions; and,
WHEREAS, the city wishes to provide and offer high value benefits to its
employees and to achieve this goal the city intends to engage the services of
an employee benefits manager and will offset the fees charged by this manager
with commissions from benefits products sold to the city and its employees; and,
WHEREAS, the new policy will grandfather those companies and agencies that now
have payroll deductions, except for those companies offering benefits products
to employees through a bid or request for proposal process, in which case basic
and supplemental life insurance products will be assumed by the benefits
manager and voluntary product deductions may continue but no new product
offerings may be made. Future deductions are limited to products offered by
the grandfathered companies and through the city?s benefits manager and
deductions for not-for-profit organizations with commitments from at least 300
employees.
NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS FOLLOWS:
Section I.
That Resolution No. 172-88 is hereby rescinded.
Section II.
Current authorized payroll deductions are permitted to continue, except
for those companies offering benefits products to employees through a bid or
request for proposal process, in which case basic and supplemental life
insurance products will be assumed by the benefits manager and voluntary
insurance product deductions may continue but no new product offerings may be
made. Future payroll deductions and solicitation for the purchase of employee
benefits products shall only be permitted by currently authorized vendors and
the city?s benefits manager.
Section III.
Future payroll deductions will not be permitted until at least 300
employees commit to deductions for not-for-profit companies, agencies, or
charities. When companies, agencies or charities have initially met this
criteria and the number of employee payroll deductions falls below 300, payroll
deductions for that company, agency, or charity will be rescinded.
______________________________
Introduced at a regular meeting of the Council of Columbus, Georgia, held
the _________ day of ____________, 2009 and adopted at said meeting by the
affirmative vote of _________ members of said Council.
Councilor Allen Voting ________________.
Councilor Anthony Voting ________________.
Councilor Baker Voting ________________.
Councilor Barnes Voting ________________.
Councilor Davis Voting ________________.
Councilor Henderson Voting ________________.
Councilor Hunter Voting ________________.
Councilor McDaniel Voting ________________.
Councilor Pugh Voting ________________.
Councilor Woodson Voting ________________.
_______________________________ ____________________________
Tiny B. Washington, Clerk of Council Jim Wetherington, Mayor
Attachments