Item 4F
Approve 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.
4F
Mr. Mayor and members of the City Council, this presentation will cover Item 4H on the August 5, 2014 City Council Agenda.
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Item 4F
Approve a contract with Unum to provide employee long term disability, life insurance and accidental death and dismemberment insurance for Plan Year October 1, 2016 to September 30,
2017.
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.
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City of Southlake Strategy Map
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.
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
Deliver on Our Focus Areas
Approving the contract with Unum 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.
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Background
As part of its standard benefit package, the City provides all full-time employees with Long Term Disability insurance, commonly called LTD, Accidental Death and Dismemberment insurance,
often referred to as AD&D, and Basic Life Insurance.
Cigna is the City’s current provider for all insurances. The LTD plan provides employees with 60% of their salary after a 90
day waiting period if the employee is unable to return to work due to a disability. The Basic Life insurance provides employees with one times their annual salary (up to $50,000) in
life insurance. The City’s AD&D coverage provides employees with one times their annual salary, up to $50,000, in coverage for on the job accidental death or dismemberment. Cigna also
offers employees the opportunity to purchase additional voluntary supplemental life insurance at their own cost.
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RFP
The City issued an RFP in early June and received responses from 8 carriers.
Each proposal was reviewed and evaluated based upon criteria including provider experience, qualifications,
reputation and references, rates, schedule of benefits and plan administration.
Following the initial review Unum and Cigna were selected as finalists.
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Finalist Comparison
On the screen you will see a comparison of the rates of the current plans and the plans proposed by the two finalists: Unum and Cigna.
As you can see, Unum provides an overall cost
savings of approximately 9% while Cigna proposes an approximate increase of 23%.
Staff recommends selecting Unum as the provider for LTD, AD&D, and Basic Life insurance. Unum provides
the most favorable cost structure while maintaining the current benefit structure. In addition, Unum has provided the City with a 3 year rate guarantee.
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Financial Considerations
Estimated cost of premiums:
Funding for LTD, AD&D, Basic Life Insurance will be included in the proposed FY 2017 budget.
The estimated cost of LTD, AD&D and Basic Life Insurance is $54,119 annually. The annual estimated decrease in premiums is $5,107 for FY 2017.
The proposed LTD, AD&D and Basic Life
Insurance plan costs will be included in the proposed budget for Fiscal Year 2017.
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Staff Recommendation
Approve a contract with Unum to provide employee long term disability, life insurance and accidental death and dismemberment insurance for Plan Year October 1, 2016 to September 30,
2017.
Staff recommends City Council Approve a contract with Unum to provide employee Long Term Disability, Accidental Death and Dismemberment and Basic Life Insurance for Plan Year October
1, 2016 to September 30, 2016.
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Questions:
Stacey Black 817-748-8063
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If you have any questions regarding this item, please contact Human Resources Director Stacey Black at 817-748-8063. Thank you for your attention.