Detroit committee delays $1.96 million benefits-administration contract with WEX Health for further review

The Committee of the Whole postponed action on contract 606754, a proposed three-year, $1,958,400 agreement with WEX Health to provide benefits administration services for city employees.

Human Resources Director Denise Starr told the committee the vendor processes open enrollment and COBRA, handles eligibility questions for about 10,215 employees and their families, and fields the bulk of call-volume around benefits. Starr said the city went to bid, found no Michigan vendors at the price point, and that implementing an in-house system would take multiple years and a substantially larger investment.

Starr said the current contract runs through June 30 and that WEX (after earlier acquisitions) has been the city's provider for many years. She described typical open-enrollment call volumes ‘‘on the order of tens of thousands’’ of contacts during the enrollment window and stressed that outside administrators spread system costs across many clients.

Council member Angela Whitfield Callaway moved to return the item in one week with follow-up information: which other municipalities WEX serves, which vendors submitted bids, and whether a one-year extension or other procurement approach would change pricing. Callaway emphasized the short window before contract expiration and asked for a clearer timeline on what it would take and cost to build the service in house.

Starr agreed to provide the requested information and to consult with procurement about transition costs and potential procurement repercussions from a shorter extension. The committee took no formal vote on awarding the contract and the item was brought back for the next meeting.

The committee did not adopt the multi-year contract at this meeting; Director Starr said she would provide a written follow-up on other bidders, the vendor's client list, and scenario pricing for a one-year extension versus the proposed three-year term.