Item 4EItem 4E
M E M O R A N D U M
July 29, 2020
TO: Shana Yelverton, City Manager
FROM: Stacey Black, Director of Human Resources
SUBJECT: Approve a contract renewal with Standard Insurance Company to provide
employee long term disability, life insurance, and accidental death and
dismemberment insurance for the Plan Year October 1, 2020, to
September 30, 2021.
Action
Requested: Approve a contract renewal with Standard Insurance Company to
provide employee long term disability, life insurance, and accidental
death and dismemberment insurance for the Plan Year October 1, 2020,
to September 30, 2021.
Background
Information: As part of the employee benefits package, the City provides all full-time
employees with long term disability (LTD) insurance, basic life insurance
(Life), and accidental death and dismemberment (AD&D) insurance.
Standard Insurance is the City’s current carrier for all three coverages
and has been the carrier since October 1, 2019 following a competitive
bidding process. The proposed renewal is the second year of a three
year rate guarantee.
Standard Insurance provides the following levels of coverage to
employees:
LTD Life AD&D
60% of salary after a
90 day waiting
period
1x annual salary
up to $50,000
1x annual salary
up to $50,000
Sworn public safety
employees receive an
additional 1x annual salary
up to $50,000
A summary of the rates and the associated annual estimated premium
costs are on the next page.
Shana Yelverton, City Manager Item 4E
July 29, 2020
Page 2
The City has had a favorable experience with Standard Insurance and
renewing the contract with Standard Insurance allows the City to
maintain consistency in providers.
Financial
Considerations: The estimated annual cost of LTD, Life and AD&D insurances is $69,754
annually. There is no rate increase for FY 2021.
The proposed LTD, Life, and AD&D plan costs will be included in the
proposed budget for Fiscal Year 2021.
Strategic Link: Performance Management and Service Delivery: attract, develop and
retain a skilled workforce.
Citizen Input/
Board Review: N/A
Legal Review: N/A
Alternatives: Deny the contract Standard Insurance Company and seek alternative
options.
Supporting
Documents: The following supporting documents are attached:
• Standard Insurance Company Proposal
Staff
Recommendation: Approve a contract renewal with Standard Insurance Company to
provide employee long term disability, life insurance, and accidental
death and dismemberment insurance for the Plan Year October 1, 2020
to September 30, 2021.
Monthly Annual
LTD
Rate / $100 $0.236 $1,838,267 $4,338 $52,060
AD&D
Rate / $1,000 $0.025 $15,521,000 $388 $4,656
Basic Life
Rate / $1,000 $0.070 $15,521,000 $1,086 $13,038
Total:$69,754
Estimated CostVolumeRateCoverage
Proposal Prepared on:
July 22, 2019
Proposed Effective Date:
October 1, 2019
Standard Insurance Company
Your Employee
Benefits Proposal
Presented by:LifetimeBenefits Insurance
Prepared for:City of Southlake
Life and AD&D Insurance
Additional Life & AD&D Insurance
Long Term Disability Insurance
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
1
Life and AD&D Insurance
Handling a Life insurance claim takes a special touch. All of our Life benefits employees complete annual grief training helping them to
empathize with beneficiaries and recognize when they need special attention. And we're focused on settling claims quickly: Our median
calculation turnaround time in 2018 was 5 days for clean claims and 6 days for all claims (internal company data as of January 2019).
Covered Members
1
An active employee of the Employer working 30 or more hours per week.
a
Basic
Benefit Schedule 1 x Annual Earnings
Rounding Up to next $1,000
Maximum Benefit $50,000
Guarantee Issue Full Benefit
AD&D Benefit Matches Life Benefit
Age Reduction Schedule
To 65% at age 65
To 45% at age 70
To 30% at age 75
To 20% at age 80
To 15% at age 90
Employer Contribution 100%
Minimum Participation 100%
abcd
Life Highlights
Basic
Waiver of Premium Eligible to age 60
Waived to age 65
Conversion Included
Portability Included
Repatriation Benefit Included
Travel Assistance Included
Life Services Toolkit Included
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
2
abcd
AD&D Highlights
Basic
Loss of life 100%
Loss of both hands, or both
feet, or sight of both eyes 100%
Loss of one hand and one
foot 100%
Loss of sight of one eye and
either one hand or one foot 100%
Loss of one hand or one foot 50%
Loss of sight of one eye 50%
Seat Belt Benefit AD&D benefit payable up to $10,000
Air Bag Benefit AD&D benefit payable up to $5,000
Family Benefits Package Included
Portability Included
Additional Plan Design Details
• An Accelerated Benefit is included. Terminally ill members may withdraw up to 75% of their Life benefit to a maximum of $500,000 (when
Basic Life and any Additional Life are combined).
• If Life is sold with Standard's LTD, then the LTD claim will initiate a claim for Standard's Life Waiver of Premium.
• The Family Benefits Package includes:
– The Higher Education Benefit reimburses tuition expenses up to $5,000 per child per year towards a 4-year college education for the
deceased's children - not to exceed a cumulative total of $20,000 or 25% of the AD&D benefit per child, whichever is less.
– Career Adjustment Benefit reimburses tuition expenses up to $5,000 per year to help a spouse to return to the workforce after the death
of their spouse - not to exceed the cumulative total of $10,000 or 25% of the AD&D benefit, whichever is less.
– Child Care Benefit reimburses a family's child care expenses up to $5,000 per year - not to exceed $10,000 or 25% of the AD&D benefit,
whichever is less.
• The Line of Duty Benefit is included for Safety employees. It provides an additional AD&D benefit for public safety officers who suffer death
or dismemberment in an accident while acting in the line of duty. This optional benefit provides public safety officers an additional $50,000
or 100% of the AD&D insurance benefit, whichever is less, when suffering a loss for which an AD&D insurance benefit is payable and which
is the result of a line of duty accident. Public safety officers include police officers, firefighters, corrections officers, judicial officers and
officially recognized or designated volunteer firefighters meeting the definition of a public safety officer.
• Travel Assistance is included and provides assistance with pre-trip planning, medical assistance services, emergency transportation
services, travel and technical assistance services and legal referral.
• The Life Services Toolkit is included and helps beneficiaries cope with grief and loss, get answers to legal questions, plan a memorial or a
funeral, and address financial concerns. Additionally, all covered employees will have access to online will preparation and other estate
planning documents as well as articles to help deal with identity theft, improve wellness and more.
• The AD&D Occupational Assistance service is included and provides access to a Workplace Possibilities (SM) Consultant who helps those
with a specified accidental dismemberment return to productive work and life.
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
3
ABCD
Cost
Basic
Life
Members 342
Volume $15,656,800
Rate: Per $1,000 .070
Monthly Premium $1,096
AD&D
Members 342
Volume $15,656,800
Rate: Per $1,000 .025
Monthly Premium $391
Total Billed Premium $1,487
Rate Guarantee 3 years
•The combined rates for Basic Life Plan 1 and Additional Life Plan 1 are appropriate for the overall risk. As requested, this proposal includes a
rate structure similar to what is currently in place and where the non-elective Basic Life rate is partially supported by the participant-elected
Additional Life rates.
•This rate structure may impact the tax treatment of the coverages under Section 79 of the Internal Revenue Code. Since this is your plan
design decision, we encourage you to consult with your own legal and tax counsel to ensure your desired result.
Assumptions
•Rates include electronic documents. Printed certificates are available for an additional cost.
•Rates assume a package sale.
•Rates assume billing is centralized in one location.
•The proposed rates assume coverage currently in force.
•This is not our customary age-reduction schedule. We assume you have determined that the schedule you requested complies with the
ADEA.
Conditions
•Member must be insured under Basic Life in order to be eligible for Basic AD&D
•The elected benefit amount for Basic AD&D must match the benefit amount for Basic Life
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
4
More Information
For additional information on the available features and benefits of Life and AD&D Insurance from The Standard,click here:
http://www.standard.com/group-life-add
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
5
Additional Life & AD&D Insurance
Covered Members
2
An active employee of the Employer working 30 or more hours per week.
a
Additional Spouse Child
Benefit Schedule Increments of $10,000 Increments of $5,000 Increments of $2,000
Maximum Benefit $500,000 $250,000 $10,000
Minimum Benefit $10,000 $5,000 $2,000
Guarantee Issue $150,000 $30,000 Full Benefit
AD&D Benefit Matches Life Benefit Matches Life Benefit Matches Life Benefit
Age Reduction Schedule
To 65% at age 65
To 45% at age 70
To 30% at age 75
To 20% at age 80
To 15% at age 90
To 65% at age 65
To 45% at age 70
To 30% at age 75
To 20% at age 80
To 15% at age 90
n/a
Employer Contribution 0%0%0%
Minimum Participation Greater of 49% or 10 lives 20%20%
abcd
Life Highlights
Additional Spouse Child
Conversion Included Included Included
Portability Included Included Included
Waiver of Premium Eligible to age 60
Waived to age 65 Not Included Not Included
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
6
a b
c
d
a bcd
AD&D Highlights
Additional Spouse Child
Loss of life 100%100%100%
Loss of both hands, or both
feet, or sight of both eyes 100%100%100%
Loss of one hand and one
foot 100%100%100%
Loss of sight of one eye and
either one hand or one foot 100%100%100%
Loss of one hand or one foot 50%50%50%
Loss of sight of one eye 50%50%50%
Seat Belt Benefit Included Included Included
Air Bag Benefit Included Included Included
Portability Included Included Included
ABCD
Additional Plan Design Details
• On the policy effective date and during the Annual Enrollment Period, all enrolled members may increase their benefit amount, not to
exceed the guarantee issue amount, without providing evidence of insurability. During the Annual Enrollment period, evidence of insurability
is required for those whose evidence of insurability was not approved by us during any prior period of eligibility.
• An Accelerated Benefit is included. Terminally ill members may withdraw up to 75% of their Life benefit to a maximum of $500,000 (when
Basic Life and any Additional Life are combined).
• An Accelerated Benefit is not available for dependents.
• Life insurance for dependents continues automatically, without premium payment, for five months after the death of the insured member.
• During a Family Status Change, members who are currently enrolled, as well as those eligible but not currently enrolled, may increase their
benefit amount, as well as their spouse's and child's benefit amounts (if included in the proposal), up to the guarantee issue amount without
providing evidence of insurability. Evidence of insurability is required for those whose evidence of insurability was not approved by us during
any prior period of eligibility.
• Dependents coverage includes child(ren) from live birth through age 25.
• The benefit amounts under the current plan are carried forward to this plan.
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
7
abcd
Cost
Additional
Life
Members 183
Volume $20,810,000
Rate: Per $1,000 Lives Age Rate Volume Premium
12
29
36
22
28
21
21
8
5
1
0
0-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-99
.058
.061
.075
.117
.184
.286
.456
.570
.820
1.348
4.280
$1,610,000
$3,140,000
$4,630,000
$2,650,000
$4,070,000
$2,020,000
$2,015,000
$510,000
$155,000
$10,000
$0
$93
$192
$347
$310
$749
$578
$919
$291
$127
$13
$0
Monthly Premium $3,619
AD&D
Members 183
Volume $20,810,000
Rate: Per $1,000 .030
Monthly premium $624
Total Billed Premium $4,243
Rate Guarantee 3 years
Spouse
Life
Members 86
Volume $3,765,000
Rate: Per $1,000 Lives Age Rate Volume Premium
3
8
14
11
17
12
12
6
2
1
0
0-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-99
.093
.093
.114
.164
.247
.392
.630
.966
1.638
3.108
6.278
$255,000
$465,000
$475,000
$560,000
$795,000
$635,000
$375,000
$165,000
$35,000
$5,000
$0
$24
$43
$54
$92
$196
$249
$236
$159
$57
$16
$0
Monthly Premium $1,126
AD&D
Members 86
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
8
Spouse
Volume $3,765,000
Rate: Per $1,000 .030
Monthly premium $113
Total Billed Premium $1,239
Rate Guarantee 3 years
Child
Elective: Paid by each Member electing coverage
Life
Members 77
Rate: Per $1,000 .200
AD&D
Rate: Per $1,000 .030
Rate Guarantee 3 years
Assumptions
•Final Spouse Life rates are subject to change if actual enrollment varies from the assumed enrollment of 20%
•Final Additional Life rates are subject to change if actual enrollment varies from the assumed enrollment of 54%
•Rates include electronic documents. Printed certificates are available for an additional cost.
•Rates assume billing is centralized in one location.
•The proposed rates assume coverage currently in force.
•This is not our customary age-reduction schedule. We assume you have determined that the schedule you requested complies with the
ADEA.
Conditions
•Additional Life can only be purchased in conjunction with Basic Life.
•Member's Basic Life benefits plus Additional Life benefits may not exceed 6 times annual earnings.
•Until coverage has been in force for two years (one year in Colorado, Missouri and North Dakota), death that results from suicide or other
intentionally self-inflicted injury is not covered. This exclusion does not apply to plans written in Washington.
Plan 2- 2109824;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
9
Conditions (continued)
• Except as provided in the Additional Plan Design Details, we require evidence of insurability for:
– Increases in elected benefit amounts from the current plan to this plan.
– Members who are eligible under the current plan but are not enrolled.
– Spouses who are eligible under the current plan but are not enrolled.
– Children who are eligible under the current plan but are not enrolled.
– Individuals who enroll more than 31 days after they are first eligible for coverage.
– Increases in elected benefit amounts after initial enrollment.
•Member must be enrolled in Additional Life to enroll in the Spouse Life plan.
•Member must be enrolled in Additional Life to enroll in the Child Life plan.
• Dependents must be insured under Dependents Life in order to be eligible for AD&D.
• The elected benefit amount for Child AD&D must match the benefit amount for Child Life
• Member must be insured under Additional Life in order to be eligible for Additional AD&D
• The elected benefit amount for Spouse AD&D must match the benefit amount for Spouse Life
• The elected benefit amount for Additional AD&D must match the benefit amount for Additional Life
• Spouse Life can't exceed 100% of member's enrolled benefit for Additional Life.
• Child Life can't exceed 100% of member's enrolled benefit for Additional Life.
More Information
For additional information on the available features and benefits of Dependent Life and AD&D Insurance from The Standard, click here:
http://www.standard.com/group-life-add
Plan 3- 2109825;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
10
Long Term Disability Insurance
Protect your employees' income and your company's bottom line. This insurance comes with innovative resources designed to help you build
a more productive workplace. Our Workplace Possibilities(SM) program, included at no extra cost, helps employees stay on the job and return
to work sooner. While not all claims can be shortened, our customers are currently experiencing anywhere from a 10% to a 25% reduction in
disability days who participate in the Workplace Possibilities Program. That's just one example of how we add real value as your partner.
Covered Members
7
A regular employee of the Employer working 30 or more hours per week.
.
Group LTD
Benefit Schedule 60%
Insured Predisability
Earnings $11,667
Maximum Monthly Benefit $7,000
Minimum Monthly Benefit $100
Benefit Waiting Period 90 Days
Maximum Benefit Period To SSNRA
Guarantee Issue Amount Full Benefit
Employer Contribution 100%
Minimum Participation 100%
Own Occupation Period 24 Months
Partial/Residual Disability Included
Preexisting Condition Period 3/12
Mental &Nervous Limitation 24 months
Substance Abuse Limitation 24 months
Other Limited Conditions 24 months
Musculoskeletal/Connective
Tissue Limitation 24 months
Return to Work Incentive 12 months
Employee Assistance
Program Included: 3 face-to-face
Plan 3- 2109825;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
11
Additional Plan Design Details
• The Standard pays the employer's matching FICA and Medicare taxes and prepares W-2s for members receiving LTD benefits.
• The plan includes the Workplace Possibilities(SM) program, an innovative approach to addressing and reducing the causes of absence and
disability - with innovative tools and resources designed to help keep your employees productive and on the job.
• This coverage includes a $25,000 Reasonable Accommodation Expense Benefit, which reimburses employers for workplace modifications
that enable employees to return to or remain at work. The Reasonable Accommodation Expense Benefit is separate from the LTD claim
payment.
• A Rehabilitation Plan Benefit is included, which increases the LTD benefit amount by 10% of predisability earnings, not to exceed the
maximum benefit, when member is participating in an approved rehabilitation plan. This benefit will also assist in paying for approved
expenses incurred by a disabled member a part of an approved rehabilitation plan.
•Survivors Benefit pays a lump sum equal to 3 times the non-integrated LTD benefit.
•Continuity of Coverage.
• The limitations included in the policy are combined lifetime limitations.
Plan 3- 2109825;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
12
abcd
Cost
Group LTD
Members 342
Volume $1,789,327
Rate: Percent of earnings .236
Monthly Premium $4,223
Rate Guarantee 3 years
Assumptions
• Sick leave payable to the member will be used as deductible income.
• Workers' compensation benefits will be considered deductible income.
• Rates assume members participate in Public Employee Retirement System.
• Rates include electronic documents. Printed certificates are available for an additional cost.
• Rates assume a package sale.
• Rates assume billing is centralized in one location.
Conditions
• Rate assumes that coverage is currently in force.
• Confirmation that you participate in Public Employee Retirement System is required.
More Information
For additional information on the available features and benefits of Long Term Disability Insurance from The Standard:
Click here for California: http://www.standard.com/ca-group-long-term-disability
Click here for all other states: http://www.standard.com/group-long-term-disability
Plan 3- 2109825;
Proposed Effective Date
October 01, 2019
Prepared for:
City of Southlake
Producer Compensation Disclosure
We recognize the valuable role of insurance advisors, consultants and brokers ("producers") in helping their clients design an employee benefits
program, and we support reasonable and fair compensation for these services. Producers may be eligible to receive compensation from The
Standard.
The commission quoted in this proposal are noted below. Additionally, fees for administrative, marketing or consulting services may apply.
If applicable, fees are noted below.
Normal commission scale (www.standard.com/financial-professional/insurance-benefits/compensation) included for Life and LTD.
Unless participation is declined by the producer or client, contingent compensation is additional compensation that may also be paid and is
dependent on the satisfaction of one or more minimum requirements, such as a specified amount of new premium volume or persistency in
connection with the producer's block of business. For information about our customary producer rewards program visit
www.standard.com/financial-professional/insurance-benefits/compensation.Some producers may have a contingent compensation
arrangement that differs from our customary program. Please consult with your producer for additional details.
About This Employee Benefits Proposal
We appreciate the opportunity to provide you with this benefit and cost summary proposal from The Standard. This document outlines certain
important features of the group insurance coverages available. This is not a contract or an offer to contract for such coverages. Detailed
information about other important features of the coverage proposed is available on request. Just ask your broker/consultant or your
representative at The Standard.
A completed application must be submitted before a group can be considered for coverage. Insurance will be effective after the application is
accepted by The Standard. If approved, we will issue a contract containing our customary language. It will not duplicate policy language from
another carrier. The group contract will contain provisions and defined terms not described in this Employee Benefits Proposal. The group
contract will control if there are discrepancies between it and this proposal.
This benefit and cost summary proposal expires on October 20, 2019, unless replaced or withdrawn by The Standard.
The proposed premium rate and plan design for each coverage are based on the underwriting data received by The Standard. Final premium
rates and plan provisions will be determined by The Standard on the basis of: applicable state laws, policyholder contributions, confirmation of
occupations, the actual composition of the group of persons who will become insured and our current underwriting rules and practices.
Financial Strength Ratings
For information about our Financial strengths ratings visit www.standard.com/about