Agenda Item 11
March 3, 2015
Public Hearing
MEMORANDUM
February 27,2015
TO:
FROM:
County Council
Robert H. Drwnmer, Senior Legislative Attorney
~9
SUBJECT:
Public Hearing:
Bill 5-15, Contracts and Procurement - Health Insurance
Preference
Bill 5-15, Contracts and Procurement - Health Insurance Preference, sponsored by
Councilmember Navarro, was introduced on February 3, 2015. A joint Government Operations
and Fiscal PolicylHealth and Human Services Committee worksession is tentatively scheduled for
March 19,2015 at 9:30 a.m.
Bill 5-15 would create a preference in the competitive procurement of services by the
County for a business that provides health insurance for its employees. The Bill would also require
the County Executive to adopt a regulation implementing this preference. The public health and
welfare is better served if each County resident has access to affordable health care.
Congress recognized this when enacting the Patient Protection and Affordable Care Act.
Although the Federal mandate for employers with more than 100 employees to provide its
employees with affordable health insurance began this year and the mandate for employers with
50 99 employees is scheduled to begin in 2016, there are still many smaller employers in the
County who do not provide health insurance for their employees. Bill 5-15 would encourage a
County bidder to provide affordable health insurance for its employees by giving these bidders a
preference in the competitive process. Councilmember Navarro outlined her reasons for
introducing this legislation in a memorandum attached at ©8.
This packet contains:
Bill 5-15
Legislative Request Report
Navarro Memorandum
F:\LAw\BILLS\1505 Contracts· Health Insurance Preference\PH Memo.Docx
Circle
#
1
7
8
 PDF to HTML - Convert PDF files to HTML files
Bill No.
5-15
Concerning: Contracts and Procurement
- Health Insurance Preference
Revised: December 29, 2014 Draft No.
.1
Introduced:
February 3, 2015
Expires:
August 3, 2016
Enacted:
_~
_ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: -:..:.No::::.:n.:.:::e:...-_ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmember Navarro
AN
ACT to:
(1)
(2)
(2)
create a preference in the procurement of services by the County for a business that
provides health insurance for its employees;
require the County Executive
to
adopt a regulation implementing the preference for
a business that provides health insurance for its employees; and
generally amend the law governing the County's procurement of services.
By adding
Montgomery County Code
Chapter lIB, Contracts and Procurement
Article XVII
Section 11 B-77
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
The County Council for Montgomery County, Maryland approves the following Act.'
 PDF to HTML - Convert PDF files to HTML files
1
2
Article
xvn
is added to Chapter llB as follows:
Article XVll. Preference for Business With Health Insurance.
llB-77. Preference for Business With Health Insurance.
3
4
(a)
Definitions.
In this Article the following telTIlS have the following
5
6
meanmgs:
Business With Health Insurance
means
~
business that provides health
7
8
9
insurance for each employee who provides services to the County under
~
contract.
Certified Business With Health Insurance
means
~
business certified
by
10
11
12
the Director as meeting the standards established
by
regulation for
Business With Health Insurance.
~
Contract
means
~
contract for procurement services subject to the Wage
13
14
Requirements Law in Section IlB-33A.
Director
means the Director of the Department of Health and Human
15
16
Services or the Director's designee.
Health insurance
means insurance coverage that is part of an employer
17
benefit package that
~
for medical expenses incurred
by
an employee
and an employee's family either
by
reimbursing the employee or
by
paying the care provider directly and provides the minimum essential
health benefits required under the Patient Protection and Affordable
Care Act, 26 U.S.C. §5000A, as amended.
Health insurance evaluation factor
means an evaluation factor in
~
18
19
20
21
22
23
24
request for proposals that gives an offeror credit for being
Business With Health Insurance.
Percentage price preterence
means the percent
by
which
~
~
certified
25
26
27
responsive
bid from
~
responsible bidder who is
~
certified Business With Health
~
Insurance may exceed the lowest responsive bid submitted
by
o
f:\Jaw\bills\1505 contracts - health insurance preference\bill1.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 5-15
28
29
30
31
responsible bidder who
Insurance.
(hl
Regulation.
IS
not a certified Business With Health
The County Executive must adopt
!!
regulation under
Method
~
that includes:
32
33
34
35
36
37
ill
ill
ill
ill
(£)
an application process for
!!
business to be certified as
!!
Business
With Health Insurance;
standards for
!!
business to meet to be certified as
!!
Business With
Health Insurance;
!!
percentage price preference for
!!
Business With Health
Insurance under
!!
solicitation for competitive sealed bidding; and
!!
Business With Health Insurance evaluation factor for use in
!!
38
·39
40
41
42
request for proposals.
Certification.
The Director must certify
!!
business that meets the
standards established
Qy
regulation as
!!
Business With Health
Insurance.
@
43
Role
Q[
Office
Q[
Procurement and Department
Q[
Health and Human
Services.
44
45
46
ill
The Office of Procurement must review all specifications of each
using department and each cooperative purchasing agreement
to
assure compliance with this Section, appropriate use of
!!
percentage price preference or an evaluation factor, and
consistency among using departments procuring similar services.
47
48
49
50
51
ill
The Department of Health and Human Services must operate the
certification process and maintain
~
list of businesses that have
52
53
been certified as
~
Business With Health Insurance.
W
Denial or Revocation
Q[
certification.
The Director may refuse to
54
certify
~
business under this Section, and may suspend or revoke
!!
(J)
f:\Jawlbills\1505 contracts - health insurance preference\bill 1.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No.
5-15
55
56
57
certification issued under this Section, after
~
~
hearing for which
reasonable notice has been given, if the business or applicant does not
meet the standards for certification as
Insurance. '
Business With Health
58
59
60
ill
Notice and opportunityfor hearing.
ill
Notice.
After finding that one or more grounds for denial,
61
suspension, or revocation of
~
certification could exist, the
62
63
64
Director may serve
~
written notice on the business or applicant
in person or
Qy
regular mail, postage prepaid, addressed to the
person's last known address as maintained in the Director's file.
Service on that person
Qy
mail is effective
J
days after mailing.
The written notice must, at
~
minimum:
{A}
state that the Director has found that the business or
applicant may be subject to denial, suspension, or
revocation ofthe certification;
65
66
67
68
69
70
71
.cru
(Q
identify the specific grounds for the Director's fmdings;
and
set
~
72
73
date for
~
hearing on denial of the application or
suspension or revocation ofthe certification.
74
75
ill
Hearing.
The Director or
~
designee may conduct the hearing. At
the hearing, the business or applicant may present evidence and
witnesses to refute the grounds cited
Qy
the Director for denying
the application or suspending or revoking the certification, and
the County and any other person may submit relevant evidence.
The relevant records of the Department are part of the hearing
record.
The person conducting the hearing must render
~
76
77
78
79
80
81
decision in writing, giving the reasons for the decision. That
o
f:\Iaw\bills\1505 contracts - health insurance preference\biIl1.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No.
5-15
82
decision is final, subject to judicial review under the Maryland
Rules for review of administrative decisions in the Circuit Court
and the Court of Special Appeals.
83
84
85
86
87
88
89
90
ill
Failure to appear.
A business or applicant who after notice does
not appear at !! hearing waives the right to !! hearing and consents
to the action that the Director proposed in the notice. The
Director may deny the application or suspend or revoke the
certification as proposed in the notice.
(g}
Appeals.
Any person aggrieved
Qy
the denial, suspension, or revocation
91
of any certification under this Section may seek judicial review under
the Maryland Rules for review of administrative decisions in the Circuit
Court and the Court of Special Appeals.
(h)
Report
92
93
94
fu'.
Office
gf
Procurement.
The Director of the Office of
95
Procurement, after consulting with the Director of Health and Human
Services, must submit !! report to the County Council and County
Executive
Qy
September 30 each year after implementation of this
Section for the prior fiscal year. The report should include:
96
97
98
99
100
ill
ill
ill
the dollar value of services purchased from !! certified Business
With Health Insurance;
the dollar value of services purchased from !! business that is not
!! certified Business With Health Insurance;
to the extent ascertainable, the additional cost of any contracts
awarded to'!! certified Business With Health Insurance under
!!
percentage price preference;
101
102
103
104
105
106
107
108
ill
!! summary of applications for certification as
!!
Business With
Health Insurance made during the year, including the results of
each application;
(!)
t\law\biJls\1505 contracts - health insurance preference\bill1.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 5-15
109
110
111
ill
®
g list of certified Businesses With Health Insurance;
suggested legislative or administrative changes; and
any other relevant information.
m
Approved:
112
113
George Leventhal, President, County Council
114
Approved:
Date
115
Isiah Leggett, County Executive
116
This is a correct copy ofCouncil action.
Date
117
Linda M. Lauer, Clerk ofthe Council
Date
(9
f:\law\bills\1505 contracts· health insurance preference\bill1.doc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
BillS-IS
Contracts and Procurement
-
Health Insurance Preference
DESCRIPTION:
Bill 5-15 would create a preference in the competitive procurement of
services by the County for a business that provides health insurance
for its employees and require the County Executive to adopt a
regulation implementing this preference.
County residents without access to affordable health insurance create
a drain on public resources and adversely affects the public health and
welfare.
To encourage bidders for County service contractors to provide
employer sponsored health insurance for their employees.
Department of General Services, County Attorney
To
be
requested.
To be requested.
To be requested.
To be researched.
Robert
H.
Drummer, Senior Legislative Attorney
Not applicable.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
None.
f:\law\bills\1505 contracts - health insurance preference\legislative request report.docx
 PDF to HTML - Convert PDF files to HTML files
MONTGOMERY COUNTY COUNCIL
ROCKVILLE, MARYLAND
NANCY NAVARRO
COUNCILMEMBER, DISTRICT 4
MEMORANDUM
January 15,2015
TO:
FROM:
SUBJECT:
Councilmembers
/'144/1
!/.I
f
Nancy Navarro, Councilmember
f
j
vi
~,,,,,,/'
.#
f
/'
!
I
I
Health Insurance Procurement Preference
On October 30, 2013, I sent you a memo about my intent to introduce legislation
that would help provide low-wage employees of County contractors with access to
affordable health insurance. On February 4,2014, I introduced Bill 14-14, Contracts and
Procurement - Wage Requirements - Health Insurance - Amendments. Over the course of
nearly a year, I have worked closely with the Executive Branch and the Laborer's
International Union of North America (LiUNA) to maintain the goal of providing more
workers with health insurance while at the same time ensuring that any approach we take
is fiscally sustainable. On January 22
nd;
the Health and Human Services Committee
(HHS) and Government Operations and Fiscal Policy Committee (GO) is set to hold its
final worksession and vote on Bill 14-14.
Bill 14-14' s focus, as amended, requires the Department of Health and Human
Services (DHHS) to help employees of County contractors sign up for health insurance
through the Maryland Health Exchange and receive the maximum subsidy allowed by the
Affordable Care Act. The bill also strengthens the County's Living Wage Law by
requiring employers to report to the Department of General Services (DOS) on the
number of employees with health insurance and requires DGS to retain contractors'
quarterly payroll records, which it does not currently do.
In my October 30,2013 memo, I said I was "exploring legislation that would
grant a preference to a bidder on a County contract who provides affordable benefits for
their employees." The attached legislation does just that. I believe that as a County we
should reward contractors who treat their employees fairly. Including this preference
in
the procurement process demonstrates this value.
Thank you in advance for your support and please contact my office if you would
like to cosponsor the attached legislation.
STELLA
B.
WERNER COUNCIL OFFICE BUILDING' ROCKVILLE, MARYLAND 20850
(240) 777-7968' 'ITY(240) 777-7914
COUNClLMEMBER.NAVARRO@MONTGOMERYCOUNTYMD.GOV • WWW.COUNCILMEMBERNAVARRO.COM