Colonial Life & Accident Co. didn't submit complete application by deadline
The Jefferson Parish Council extended Colonial Life & Accident Co.'s contract Wednesday to provide supplemental insurance benefits to parish employees, despite an evaluation favoring rival AFLAC Insurance. AFLAC was the only firm to submit a complete application for the work by the June 1 deadline.
Chris RobertsWith a one-year contract on the agenda, the council approved a six-month extension for Colonial through June 2012. Council members billed its unanimous decision as a compromise to give Parish President John Young's administration the time to form a plan that would open up such voluntary insurance options to all licensed and qualified providers.
"That, in itself, would open up fair competition to the market to allow anyone who sells these products to offer them to the employee and allow the employee to make the decision as to what company they choose to spend their money with," council Chairman Chris Roberts said.
Jefferson lets its Parish Council choose a supplemental insurance provider even though no public money is involved in the contract. Parish employees may choose supplemental coverage, such as for cancer or long-term disability care, and pay for it with their own money. Colonial now holds the one-year contract, which would have expired Dec. 31.
As the Young administration prepared in April for a new contract, it asked for statements of qualifications from interested insurers, and Ed Vicknair, a long-term disability insurance consultant working with AFLAC, said there were problems from the very start. He told the council that a Colonial broker began contacting long-term disability insurance providers about the Jefferson contract two days before the parish made an official request for offers. He didn't name the broker.
Vicknair also said the administration ruled AFLAC as "the only qualified respondent" to show interest by the June 1 deadline.
Human Resources Director Peggy Barton said she wasn't sure how a broker could have caught wind of the parish's request before it was officially made, but she pointed out that the council's agenda is available almost a week before each meeting. Any broker could have read that and anticipated that the council would vote to begin the search, she said.
She agreed that AFLAC was the only company to submit a complete response by June 1. But the parish attorney's office gave Colonial and two other companies -- Allstate and Humana -- a second chance to supplement their statements because of confusion over the new, stricter disclosure rules attached to chasing parish contracts.
"Everyone was treated the same way," Barton said.
Barton served on the evaluation committee with Parish Attorney Deborah Foshee, Risk Management Director Bill Fortenberry, Chief Operating Officer Chris Cox and Finance Director Gwen Bolotte. In July, the panel gave AFLAC's proposal the highest score, 479 points out of 500, while Colonial's plan received 428 points. Allstate scored 300 and Humana, 224.
A draft resolution was written up to award the contract to AFLAC, but the council delayed making a decision on July 27. A month later, Roberts wrote to Young questioning the administration's evaluation process. A week after that, the council delayed its vote again.
"It's disheartening to hear people say we don't think you did it right," Barton said. "We spent a lot of time on" the evaluation process."
Cox said it will take at least six weeks to come up with a new plan for supplemental insurance. And once the process is open to all competing insurance providers, there is still a strong possibility that Colonial will benefit from having already sold many policies to parish employees, Barton said.
"As an employee who doesn't have a lot of time, I'm not going to go through open enrollment again," said Barton, speaking for herself. "So I think it does give Colonial an advantage."
The selection of a supplemental insurance provider in Jefferson Parish has had its share of controversy in recent years, including the role it played in the undoing of Parish President Aaron Broussard's administration in 2009 and 2010.
Broussard resigned after admitting that he did legal work for Lagniappe Industries, an insurance agency owned by his top aide, Tim Whitmer. Lagniappe Industries was splitting commissions with B&A Insurance on employee insurance sold to employees at the West Jefferson Medical Center. Whitmer resigned four days before Broussard.
Later, the council barred B&A Insurance and brokers Gary Burke, Jo Ann Toomy and Wally Pontiff Sr. from participating in selling supplemental insurance to parish employees.
However, records show that the broker under Colonial's current proposal, Robert Brulet, was an associate of B&A Insurance in 2010 and still lists that company's address on West Napoleon Avenue in Metairie with his contact information.
To avoid such possible conflicts, the council required that Colonial renew its sworn affidavit that none of its brokers working with Jefferson Parish was associated with B&A.
"If there is any connection, then that's going to be a problem," Roberts said.