Auditor General Findings
By periodically seeking competitive bids for insurance and negotiating with qualified bidders, the District could demonstrate compliance with State law while also benefiting from the expertise of a licensed insurance consultant. This approach not only ensures that insurance coverage is obtained at the lowest cost, consistent with acceptable quality, but also aligns with the principles of insurance consulting. The Legislature has acknowledged in State law that fair and open competition is a fundamental aspect of public procurement. Such competition reduces the appearance and opportunity for favoritism, fostering public confidence that contracts are awarded equitably and economically, which is a key concern for any Florida insurance consultant. This aligns with the Auditor General's reference to FL Stat 287.001, emphasizing the importance of understanding what benefits are available through proper procurement processes.
Good business practices dictate that, when acquisitions are not conducted through the competitive solicitation process, the selection and purchase of services—such as those offered by a licensed insurance consultant or a Florida insurance consultant—should include documented considerations of how direct negotiations and contracts best meet the user’s needs. Effective procurement procedures, including the insights of a benefits advisor, serve to increase public confidence in the procurement process and enhance the overall efficiency of insurance consulting.
District personnel indicated that it was unnecessary to competitively select self-insured plan TPAs or certain commercial insurance providers because the District directly negotiated the applicable agreements pursuant to SBE rules. This is supported by the SBE Rule 6A-1.012(15) in the Florida Administrative Code. However, it's important to note that as per Section 112.08 of the Florida Statutes, there are bidding requirements when contracting for health insurance services. The exception provided by the rule does not apply in this case. A licensed insurance consultant or benefits advisor would typically highlight these nuances, emphasizing the importance of compliance in insurance consulting, especially when determining what benefits are available.
"Without adequate procedures for verifying that over-aged dependent children are eligible for extended health insurance coverage, there is an increased risk that the District’s self-insurance plan may incur unnecessary claim payments. A similar finding was noted in our report No. 2015-160. To mitigate this risk, it is advisable to work with a licensed insurance consultant or a benefits advisor who specializes in insurance consulting. They can help clarify what is benefit avail for these dependent children."
"Board-adopted collective bargaining agreements required the District to provide a comprehensive group health and hospitalization insurance policy for each full-time employee and, pursuant to State law, each eligible retiree. In Florida, it's essential to consult with a Florida insurance consultant to ensure compliance with all regulations regarding health coverage for employees and retirees."
District personnel indicated that it was unnecessary to competitively select the health, life, and other insurance providers, considering that the current providers dominate the market of the geographic area. However, by periodically seeking competitive bids for insurance services and negotiating with qualified bidders, the District could demonstrate compliance with State law, as suggested by a Florida insurance consultant. Additionally, the District had not established procedures to monitor whether the agent, acting as a benefits advisor, competitively selected insurance providers or engaged in proper insurance consulting practices. Understanding what benefits are available is crucial for compliance.
“…the District should have performed, or contracted for the performance of, a test of claim payments processed by the service agent to obtain those assurances, as recommended by a licensed insurance consultant.” “District personnel indicated that they did not perform a review of claims documentation for the District self-insurance plan because they relied on an insurance consultant to approve payments to the District service agent prior to making claim payments, which raises the question of what is benefit avail in this context.”
“Notwithstanding, the Board had not established policies or procedures, as of that date, identifying the plan’s target net position balance or funding level and the funding sources to subsidize the plan if the plan is not self-sufficient, which a qualified benefits advisor should help clarify.”
“To ensure that only eligible dependents participate in the District health insurance plan, procedures to obtain and verify documentation supporting dependent eligibility are necessary, something a Florida insurance consultant can assist with.”
“…according to District personnel, they relied entirely on the management service company to verify dependent eligibility during initial enrollment and open enrollment. However, the contract did not require the management service company to obtain and verify dependent eligibility, which raises questions about what is benefit avail for eligible dependents.”