July 13, 2004

SUBJECT:  Renewal of Employee Assistance Program Contract for Fiscal Year 2004/2005

REPORT IN BRIEF

This report recommends the renewal of the existing contract with Managed Health Network, Inc. (MHN) for the Employee Assistance Program (EAP) to be renewed retroactively to July 1, 2004 for one fiscal year. 

BACKGROUND

As part of its employee benefit package, the City of Sunnyvale provides full-time and regular part-time employees with an employee assistance program.  The contract with MHN expired on June 30, 2004.  A flat premium covers the employee and all his/her dependents, if any.

DISCUSSION

MHN has offered to extend the current contract at the current rates through June 30, 2005.  The reason for this is due to employees using less than the limit of seven (7) sessions per contract year.  The average number of sessions used by employees was five (5) per contract year.  Therefore, the current rate of $6.44 per employee, per month, will remain in effect through June 30, 2005.

The City of Sunnyvale’s EAP overall utilization decreased slightly from the previous year.  Utilization activity is used to set annual premium rates.  There were a total of 172 intakes received in calendar year 2003; 137 were employees and 35 were dependents. 

The EAP program is an important part of our employee benefit package which addresses issues/problems that can affect employee performance, productivity, moral and attitude. The EAP program provides for up to seven (7) counseling sessions per employee and seven (7) for each dependent with marital, family, alcohol/drug, stress management, financial/credit concerns, tax assistance, legal issues and emotional problems including those found at work.

This program, in addition to its regular confidential EAP services for employees and dependents, also offers other ancillary services such as related brown-bag workshops, job performance referrals and critical incident stress debriefings.

FISCAL IMPACT

The current average number of employees covered under the EAP program is approximately 952 and the current monthly rate is $6.44 per employee for an annual cost of $73,571. 

Funding for this expenditure is provided in the Benefits Fund and the cost of the contract renewal has been provided for in the Fiscal Year 2004-05 Base Budget.

PUBLIC CONTACT

Public Contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and the City Clerk’s Office.

ALTERNATIVES

Authorize renewal of the existing MHN contract one year for the EAP Program with no monthly rate increase through June 30, 2005.

Do not authorize renewal of the contract and seek other alternatives.

RECOMMENDATION

Staff recommends adoption of Alternative #1; Authorize renewal of the MHN contract to continue providing the EAP services to City employees for one year.

Prepared by:


Myriam Castaneda

Human Resources Supervisor

Reviewed by:

Mark Gregersen

Director, Human Resources Department

Approved by:


Amy Chan

City Manager