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Dearborn Heights interviews seven benefits consultants; bids, platforms and union concerns headline study session
Summary
City council heard seven firms pitch employee-benefit consulting and administration on Nov. 18. Proposed fees ranged from commission‑funded first‑year bids to larger multi‑year guarantees; vendors emphasized pharmacy and stop‑loss strategies and technology changes while union leaders asked for review time and formal inclusion.
Dearborn Heights’ City Council convened a study session Nov. 18 to hear seven firms pitching employee‑benefits consulting services as the city considers replacing or renewing its benefits consultant. Presenters described a mix of market leverage, analytics, pooled risk and software options and provided contrasting price proposals and service models.
Gallagher representatives led by Chad Hodkinson opened the session, outlining Gallagher’s Michigan public‑sector practice and recent acquisitions. Hodkinson said Gallagher’s market reach lets it “drive about 20% cost avoidance on [a] pharmacy program” for a recent client while keeping employee benefits unchanged, and Jeff Nielsen and Tamiko Duffy described year‑round account support, pharmacy expertise and technology work. Gallagher told council its direct fee proposal in year one is $69,700 (commissions embedded in existing Blue Cross products) and that it would aim for an $89,000 engagement in later years; the firm said it could help the city transition away from the current Ebix benefit platform (a $25,000 line item in some proposals) to a no‑cost or lower‑cost platform as part of its service.
TMR Agency, represented by Michael Mueller and Kevin Moore, emphasized local municipal experience and compliance with Michigan laws that affect employer contributions. Mueller described tools such as rate re‑sloping and unbundling active and retiree rates under Public Act 152 and said the firm’s RFP response included a guaranteed fee (their materials listed a figure in the low‑to‑mid six figures in total across terms); TMR stressed stop‑loss analysis and monthly claim monitoring as central to controlling costs.
Manquin Vance stressed municipal specialization and retiree‑health (GASB/OPEB) work, describing hands‑on account teams and collective‑bargaining engagement. KAPNIC/Health Rosetta‑aligned presenters focused on independent analytics and alternative pharmacy models (including pass‑through approaches) and said those strategies can produce substantial pharmacy savings when applied carefully.
Several other firms, including Allied Insurance Managers and an Allied/United Planners team, proposed approaches that keep the Blue Cross network where appropriate but carve out specialty pharmacy or stop‑loss elements to seek savings. Allied said its base bid was roughly $94,000 and that some of the $25,000 build‑out for Employee Navigator could be offset by carrier credits. Plant Moran, the incumbent, emphasized institutional knowledge, ACA and retiree reporting complexity, and transparent invoiced fees rather than a commission‑first model; the incumbent said it guarantees its invoiced fee for two years and will reduce the city’s direct charge dollar‑for‑dollar if the city provides or pays for its own benefits‑administration platform.
Throughout presentations, council members pressed vendors on the size and structure of the account teams, year‑two pricing and whether platform migration would create additional work or risk for human‑resources staff. The question most often raised was the Ebix platform currently used by the city versus alternatives such as Employee Navigator or other municipal‑focused systems; vendors uniformly recommended careful review and a detailed transition plan to avoid data loss for retirees and to protect ACA reporting obligations.
Union leaders and employee representatives asked the council to share the proposals with bargaining units and to involve unions in the selection process. Bill Hall, speaking as a union representative, said the city’s benefits structure “covers many different bargaining units with several plans that are specified by contract language” and urged caution in any change that could trigger grievances or arbitration. Multiple vendors acknowledged the need to work with bargaining units and to preserve bargaining‑unit protections while achieving cost savings.
No formal action or vote was taken at the study session; council members thanked presenters and said staff would review proposals and return a recommendation and agenda item for a later decision. The next procedural step is for staff to compile comparisons, verify platform transition risk and provide a consolidated costing sensitivity (year‑one fee, recurring annual cost and any platform charges) before the council votes.
Quote highlights from the session included Hodkinson, Gallagher: “we were able to help them drive about 20% cost avoidance on their pharmacy program,” and Bill Hall, union representative: “The complexity of our health care benefits program… covers many different bargaining units with several plans that are specified by contract language.” Plant Moran summarized a central procurement concern: “Many brokers will provide what we would call acquisition pricing, and then they will work their way up to or beyond the fees that we have presented by selling additional insurance and generating additional commissions.”
What happens next: staff will review bids, check references and technical compatibility with the city’s current benefit feeds, and return comparative pricing and transition‑risk analysis for council consideration at a future meeting. Council members asked specifically that unions receive proposal materials and be consulted before any final contract is awarded.
