Town Council takes insurance broker mulligan, sticks with IBA for now

kjahner@newsobserver.comJanuary 24, 2014 

— This town will stick with its current health insurance broker and next year re-do a selection process that resulted in multiple controversies over the past several months.

With Jones Insurance’s withdrawal after the town expressed concerns over a partner company’s executive, town council decided to stick with current broker Independent Benefits Advisers for an additional year.

Town staff initially picked Hill Chesson & Woody from four proposals for the three-year contract. But Town Council stepped in and overruled the staff’s decision – in a 3-2 vote -- in favor of giving Jones Insurance a one-year trial run in an effort to shop local. IBA had been staff’s second choice; town staff has expressed satisfaction with its services.

Council next year will have an unspecified role in the selection process, which will run on a similar timeline as this year’s: initial requests for proposals go out in August. Mayor Ronnie Williams brushed aside concerns that staff’s and council’s apparent philosophical differences on how important shopping locally really is.

“It should eliminate the problems like they had this year,” Mayor Ronnie Williams said. “I’m just confident that if a council member is involved with staff, it shouldn’t be a problem next go-around.”

Tuesday night’s decision to stick with the current broker was unanimous and no discussion preceded the motion or the vote at the meeting. Ken Marshburn and Kathy Behringer had supported staff’s selection of HC&W, but didn’t object to the stopgap.

“I think there were probably differing views and opinions, since my view had been to go with staff recommendation. But I believe the majority of council members preferred to take the action that was taken,” Marshburn said. “I think we all wanted to bring this thing to some conclusion, since it had been a visible and contentious matter for some time.”

The contract to negotiate the town’s nearly $1 million health insurance policy with Blue Cross is worth about $25,000 to $35,000 to the company that wins the contract. Typically, the process for requesting proposals and choosing contractors of that size have been handled by staff.

Jones Insurance had the health insurance broker contract for about a decade until 2010 when it lost the business to IBA, which focuses exclusively on employee benefits. Jones still handles liability insurance for the town. Human Resources Director Mary Beth Manville said standing pat was simple because IBA remained the town’s broker of record, but said the switch to top-choice HC&W could have been made despite a time crunch.

After Council overruled staff and gave Jones the contract last fall, competitors mentioned to town staff that David Curtis Smith, vice president of Eben Concepts -- Jones’ new partner and the source of its public employee health benefits expertise – had run into trouble in his previous career as a lawyer.

Town manager Hardin Watkins said, and Manville confirmed, that someone at HC&W had asked Manville about the situation at Eben. Manville thought nothing of it until an IBA staff member mentioned that a principal at Eben had been disbarred.

Manville reported it to her boss, Watkins, and staff found in its research, that Smith was disbarred from practicing law for taking about $227,000 from a client in 2009. Town attorney Bill Anderson was consulted about legal ramifications, and then the staff’s information was presented to the town.

Jones Insurance owner Jerry Jones, Eben president Chris Harrison, and Smith all characterized the move as irrelevant, and a smear effort by a competitor. They also said Smith would not be directly involved with the town’s account anyway.

Manville disagrees with that characterization. She said the remarks had been made more in passing after the bidder was informed that Jones had received the contract, and didn’t have the context of a personal attack. She also noted that no one said anything during the process when the bids were being evaluated.

“I don’t think it was necessarily sour grapes. I don’t think it was an attack on anyone’s character,” Manville said.

Jahner: 919-829-4822; Twitter: @garnercleveland

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