Background:
On January 1, 2015, the City of Sunrise and AvMed, Inc. entered into an Administrative Services Agreement (ASA) via Resolution 14-107 to provide claim administrative services for the Exclusive Provider Network (HMO) and Point of Service (POS) plans under City’s self-funded health program. The original ASA term was for three years with two annual extensions. Four Amendments have since extended the contract from January 2018 through December 31, 2025. The City and AvMed now desire to enter into a Fifth Amendment, extending the contract for one additional year, updating the cost form, modifying performance guarantees, and incorporating mandated Florida statutory language.
Effective January 1, 2026, the claims administrative fee will increase to $45.85 per subscriber per month, which represents a 3% increase from the previous years claims administrative fee of $44.51 per subscriber, per month. The increase is approximately $17,600.00 annually. The revised total claims administrative fees are shown on “Exhibit F. - Third Party Administration Cost Form,” which is attached to the Fifth Amendment as Appendix "1". Additionally, “Exhibit E. - Performance Guarantees” has been updated to include a new guarantee, measure method and liquidated damages amount related to reinsurance marketing, which is attached to the Fifth Amendment as Appendix "2".
AvMed’s total claims administrative fee for the upcoming calendar year is approximately $600,000.00, based upon the estimated census of 1090 subscribers enrolled in both health plans. It is requested that the City Commission waive the City's formal bidding procedures for good cause under Section 5-173 C(5) of the City Code as the City has been satisfied with the services, the cost, and the overall value provided to City employees for the Health Program Administrative Services.
City Staff and the City's benefits consultant recommend approving the Fifth Amendment with AvMed, Inc. for a one year contract period of January 1, 2026 through December 31, 2026.