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Item 4I Approve a contract renewal with Cigna Life Insurance Company to provide employee Life Insurance, Accidental Death and Dismemberment Insurance and Long Term Disability Insurance for Plan Year October 1, 2015 to September 30, 2016. 4I Mr. Mayor and members of the City Council, this presentation will cover Item 4H on the August 5, 2014 City Council Agenda. 1 Item 4H Approve a contract renewal with Cigna Life Insurance Company to provide employee Life Insurance, Accidental Death and Dismemberment Insurance and Long Term Disability Insurance for Plan Year October 1, 2015 to September 30, 2016. The purpose of this item to is to request City Council approval of a contract with Cigna to provide employee Long Term Disability, Accidental Death and Dismemberment and Basic Life Insurance for Plan Year October 1, 2014 to September 30, 2015. 2 Critical Business Outcomes CBO1 - Continue to implement Southlake 2030 Plan by focusing on short-term initiatives. CBO2 - Become an employer of choice by developing a plan to recruit, develop and retain employees committed to excellence. CBO3 - Develop long-term strategies to address future financial uncertainties and challenges. CBO4 - Improve mobility by proactively completing traffic analysis of key areas. CBO5 -Optimize resources through collaboration and partnerships to reduce costs and add service value. The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing efficiency, fiscal responsibility, transparency, and sustainability. Deliver on Our Focus Areas Performance Management & Service Delivery C1 Achieve the highest standards of safety & security C2 Provide travel convenience within City & region C3 Provide attractive & unique spaces for enjoyment of personal interests C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment C5 Promote opportunities for partnerships & volunteer involvement Serve our Customers Manage the Business B1 Achieve best-in-class status in all City disciplines B2 Collaborate with select partners to implement service solutions B3 Enhance resident quality of life & business vitality through tourism B4 Provide high quality services through sustainable business practices B5 Enhance service delivery through continual process improvement B6 Optimize use of technology Provide Financial Stewardship Promote Learning and Growth F1 Adhere to financial management principles & budget F2 Invest to provide & maintain high quality public assets F3 Achieve fiscal wellness standards F4 Establish & maintain effective internal controls L1 Ensure our people understand the strategy & how they contribute to it L2 Enhance leadership capabilities to deliver results L3 Attract, develop & retain a skilled workforce L4 Recognize & reward high performers L5 Empower informed decision-making at all levels in the organization C6 Enhance the sense of community by providing excellent customer service and citizen engagement opportunities L6 Foster positive employee engagement City of Southlake Strategy Map Approving the contract with Cigna links to the City’s strategy map relative to the focus area of Performance Management and Service Delivery and specifically to the corporate business objective of Attract, develop, and retain a skilled workforce. It also ties to CBO2 – Become an employer of choice. 3 Background Basic Life Insurance Accidental Death & Dismemberment (AD&D) Long Term Disability (LTD) As part of its standard benefit package, the City provides all full-time employees with Basic Life insurance, Accidental Death and Dismemberment insurance, often referred to as AD&D, and Long Term Disability insurance, commonly called LTD. Cigna is the City’s current carrier for all three coverages. Cigna has been the provider for LTD since 2006 and has provded Life Insurance and AD&D since last year. 4 Coverage The City offers to its employees, at no cost, life insurance, AD&D, and LTD. Life insurance is provided in the amount of one times their annual salary, up to $50,000. AD&D coverage is offered for on the job accidental death or dismemberment in the amount of one times the annual salary up to $50,000. And finally, long term disability is offered as income protection should an employee be unable to return to work due to a long term disability or illness. LTD will pay 60% of employee’s monthly salary after a 90 waiting period has been satisfied. Employees area also offered the opportunity to purchase additional voluntary supplemental life and AD&D insurance at their own cost. 5 Renewal RFP Issued in 2014 3 Year Rate Guarantee No Cost Increase Last year, the City issued a Request for Proposals (RFP) for Life, AD&D and LTD insurance. The City last issued an RFP in 2006, and will typically issue an RFP every six years, depending upon renewal proposals. Five carriers submitted proposals in response to the RFP, and Cigna was selected because they offered the lowest overall premium rate at the existing benefit level. In addition, Cigna offered a three year rate guarantee. This proposed contract renewal is the second year of the three year rate guarantee and results in no cost increase. The estimated annual cost is $57,348. 6 Cigna Advantages There are a number of advantages to renewing with Cigna for life, AD&D and LTD insurances… [CLICK] This is the second year of a three year rate guarantee, resulting in stable premiums The City has had a favorable experience with Cigna and having one carrier for the three different coverages consolidates billing and administrative processes; [CLICK] Cigna offers employees the opportunity to purchase additional life and AD&D insurance at their cost [CLICK] Cigna offers additional services for employees as part of the basic life insurance coverage including will preparation, emergency travel assistance and identity theft assistance. 7 Financial Considerations Estimated cost of premiums: Funding for LTD, AD&D, Basic Life Insurance will be included in the proposed FY 2016 budget. The estimated cost of LTD, AD&D and Basic Life Insurance is $4,779 per month, or $57,348 annually. There is no premium increase for FY 2016. The proposed LTD, AD&D and Basic Life Insurance plan costs will be included in the proposed budget for Fiscal Year 2015. 8 Staff Recommendation Approve a contract with Cigna to provide employee Life Insurance, Accidental Death and Dismemberment and Long Term Disability insurance for Plan Year October 1, 2015 to September 30, 2016. Staff recommends City Council Approve a contract renewal with Cigna to provide employee Life Insurance, Accidental Death and Dismemberment and Long Term Disability insurance for Plan Year October 1, 2015 to September 30, 2016 9 Questions: Stacey Black 817-748-8063 10 If you have any questions regarding this item, please contact Human Resources Director Stacey Black at 817-748-8063. Thank you for your attention.