PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6c 
ACTION ITEM 
Date of Meeting    February 25, 2014 
DATE:    February 18, 2014 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Tammy Woodard, Assistant HRD Director  Total Rewards 
SUBJECT:  Authorization to Advertise and Execute a Service Agreement for a Benefits
Consultant 
Amount of This Request:       $1,700,000       Source of Funds:   General Fund 
Est. Jobs Created:         Approximately 2 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to advertise and execute a
service agreement for benefits consulting and brokering services. This service agreement will be
procured via the Port's competitive selection process. The maximum duration of the agreement
will be five years (2015 through 2019) and the anticipated value of the agreement is not to
exceed $1,700,000. 
SYNOPSIS 
The Port utilizes the services of a consulting firm to provide brokering services on the fully
insured portions of the benefits package. These include life and disability insurance as well as
the Port's Group Health HMO medical coverage option andstop loss coverage for the selfinsured
medical plans. The consulting firm also provides consulting services on the Port's selfinsured
medical and dental plans that include cost modeling, plan design alternatives, consulting
on aligning with the Healthcare Strategy and Total Rewards Philosophy, advice on industry
trends, compliance with changing benefits regulations, and communicating benefits to
employees. These same consulting services are provided for the fully insured plans when
needed. 
The current benefits consulting service agreement will expire at the end of 2014 and Port staff
plans to have a new agreement in place by the end of September. This will provide for sufficient
time to wrap up preparation for the 2015 plan year with the current benefits consultant and work
with the new consultant to ensure an understanding of the Port's benefits plans and programs by
the end of the year. 


Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 18, 2014 
Page 2 of 3 
BACKGROUND 
The Port began self-insuring the Port sponsored medical and dental plans in 2011. This created a
need for additional, and different, benefits consulting services than had been used with the fully
insured plans. With self-insured plans, consultants assist the Port in determining rates for the
plans, costing alternative plan designs, sourcing stop loss coverage, filing required reports with
the state, and other activities related to managing and administering the self-insured health plans.
The benefits consultant also plays a key role in assisting the Port when we need to go through a
procurement to select the claims administrators for the self-insured medical and dental plans.
The consultants have special tools available to them that are needed to evaluate the cost of each
proposal. It is also an industry standard for benefits consultants to evaluate claims administrator
proposals and assist their clients in evaluating them so the benefits consultant provides a very
useful service to the Port when we must conduct these procurements. The self-insured health
plans are available to non-represented employees as well as represented employees whose
collective bargaining agreements specify that medical and dental coverage will be provided by
the Port sponsored plans. 
The benefits consultant also continues to assist the Port in managing and administering fully
insured plans, including life and disability plans, the Group Health medical plan option and the
stop loss coverage associated with the self-insured medical plans by serving as a broker. As a
broker the consultant requests renewal rates, negotiates lower rates on behalf of the Port,
administers selection processes when the Port desires a more competitive process to select a
vendor, and assists the Port in making changes to the insured plans if needed for better alignment
with the Total Rewards Philosophy.  Similar to the self-insured plans, non-represented 
employees are covered by the plans that the benefits consultant brokers for the Port, as are
represented employees whose collective bargaining agreements specify that their life and
disability insurance are provided by the Port sponsored plans. 

ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1)  Do not utilize the services of a benefits consultant. 
Port staff do not have the expertise required to ensure compliance with changing regulations nor
does Port staff have the knowledge, skills or tools available to perform the cost modeling
required to effectively manage the Port's benefit plans. With this alternative there is real risk
that plans could fall out of compliance with changing regulations and that costs would be
significantly under, or over, estimated for both the Port and employees. 
This is not the recommended alternative. 
Alternative 2)  Extend the current contract for one more year. 
This alternative has some merit in that the current consultant would be permitted to stay on board
for an additional year, or possibly more. The current consultant assisted the Port in developing
the Healthcare Strategy and new High Deductible Health Plan, both introduced during the second
half of 2013, and therefore is very familiar with the Port and the philosophies and strategies that

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 18, 2014 
Page 3 of 3 
guide management of our benefit plans. This familiarity could facilitate more thorough and
accurate analysis of the first year of the new medical plan and how closely the plan achieved
desired goals as there will be insufficient data to evaluate the entire first year of the plan until
mid to late first quarter 2015. The disadvantage of this approach is the delayed opportunity for
potentially contracting with a new consultant with enhanced ability to support the Port's plans or
at rates more favorable to the Port. 
This is not the recommended alternative. 
Alternative 3)  Issue a request for proposal, select a benefits consultant through the competitive
selection process, and negotiate a new service agreement with the selected consultant. 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
Resolution No. 3636, Self-Funding Resolution. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None.