Insurance Consultant Steals Food From Children

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Uncle Sam, the Working Man’s Partner, is gonna be some kind of pissed at tax time.

By Molly Mulebriar

A South Texas school district sought competitive proposals for insurance consultant earlier this year. It was anticipated that proposals would exceed $50,000 thus exceeding the administration’s discretionary spending authority requiring a public request for proposals.

The scope and duties of the prospective insurance consultant were broad and included management, analysis, and on-going monitoring of the district’s self-funded employee welfare plan and Cafeteria Plan administration / insurance products. 403b and 457 administration and investment options were also part of the consultant’s responsibilities.

The management of the self-funded employee health insurance program alone entails overseeing a +$15 million budget item.

This is a major undertaking for any consultant, requiring strong backup support, high number of dedicated hours, multiple visits, and broad expertise.

One would suppose respondents had to factor in their costs to provide the requested services as well as their time to be expended throughout the year to determine fees to be charged to accept this challenging project. Expenses include income tax which can be 35% or more after deductions. In addition, E&O insurance can run into the thousands of dollars a year with the district as a named insured. Travel is costly too, with an average trip around $500 for a three day turnaround, not counting time (more if airfare is required).

The district received six proposals. The highest priced proposal was about $42,000.

The lowest bid received the nod – $15,000 annual fee, guaranteed for three years.

That comes out to a little over $1,000 per month. With expenses, there will be little or no money left for Uncle Sam, much less the lucky consultant.

Uncle Sam, the Working Man’s Partner, is gonna be some kind of pissed at tax time.

Is there something wrong with this picture? Most importantly, what about the district’s federally funded school lunch program – has the consultant’s brash and irrational behavior affected those finances too? What, in Heaven’s sake, was this guy thinking when he put his consulting proposal together?

Stealing food from kids ought to be punished, not rewarded.

Editor’s Note: Mulebriar, a former Miss Texas,  is a free lance reporterette from Waring, Texas. www.mollymulebriar.org

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