Item 4EItem 4E
CITY OF
SOUTH LAKE
MEMORANDUM
July 27, 2021
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, 2021 to
September 30, 2022.
Action
Requested
Background
Information:
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, 2021
to September 30, 2022.
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 third year of a three-year
rate guarantee.
Standard Insurance provides the following levels of coverage to
employees:
LTD
Life
.: .
1x annual salary
up to $50,000
60% of salary after a
1x annual salary
90 day waiting
up to $50,000
Sworn public safety
period
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
July 27, 2021
Page 2
Item 4E
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
$71,286 annually. There is no rate increase for FY 2022
The proposed LTD, Life, and AD&D plan costs will be included in the
proposed budget for Fiscal Year 2022.
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, 2021
to September 30, 2022.
Proposal Prepared on:
July 22, 2019
Proposed Effective Date:
October 1, 2019
Standard Insurance Company
Life and AD&D Insurance
Additional Life & AD&D Insurance
Long Term Disability Insurance
[TheSt7andardl
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
LTheS:tanc1ajrd
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).
Benefit Schedule
Rounding
Maximum Benefit
Guarantee Issue
AD&D Benefit
Age Reduction Schedule
Employer Contribution
Minimum Participation
1 x Annual Earnings
Up to next $1,000
$50,000
Full Benefit
Matches Life Benefit
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
100%
100%
Life Highlights
Waiver of Premium Eligible to age 60
Waived to age 65
Conversion
Portability
Repatriation Benefit
Travel Assistance
Life Services Toolkit
Included
Included
Included
Included
Included
Plan 2- 2109824; 1
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
AD&D Highliinhfig
Loss of life
Loss of both hands, or both
feet, or sight of both eyes
Loss of one hand and one
foot
Loss of sight of one eye and
either one hand or one foot
Loss of one hand or one foot
Loss of sight of one eye
Seat Belt Benefit
Air Bag Benefit
Family Benefits Package
Portability
Additional Plan Design
100%
100%
100%
100%
50%
50%
AD&D benefit payable up to $10,000
AD&D benefit payable up to $5,000
Included
Included
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
planninq documents as well as articles to help deal with identitv 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 Prepared for:
October 01, 2019 City of Southlake
Cost
Life
Members
Volume
Rate: Per $1,000
Monthly Premium
AD&D
Members
Volume
Rate: Per $1,000
Monthly Premium
Total Billed Premium
Rate Guarantee
$391
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
The elected b
Plan 2- 2109824; 3
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
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 Prepared for:
October 01, 2019 City of Southlake
Covered Members
An active employee of the Employer working 30 or more hours per week.
Benefit Schedule
Maximum Benefit
Minimum Benefit
Guarantee Issue
AD&D Benefit
Age Reduction Schedule
Employer Contribution
Minimum Participation
Additional
Increments of $10,000
Spouse•
Increments of $5,000
Increments of $2,000
$500,000
$250,000
$10,000
$10,000
$5,000
$2,000
$150,000
$30,000
Full Benefit
Matches Life Benefit
Matches Life Benefit
Matches Life Benefit
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
0%
0%
0%
Greater of 49% or 10 lives
20%
20%
Life Highlights U ,
Conversk
Portabili
Waiver of Premiu
Plan 2- 2109824;
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
AD&D Highlights A
Loss of life
Loss of both hands, or both
feet, or sight of both eyes
Loss of one hand and one
foot
Loss of sight of one eye and
either one hand or one foot
Loss of one hand or one foot
Loss of sight of one eye
Seat Belt Benefit
Air Bag Benefit
Portability
0
Additional
100%
••
100%
•
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
50%
50%
50%
Included
Included
Included
Included
Included
Included
Included
Included
Included
dditional Plan Design De
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; 6
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
Cost
Life
Members
Volume
Rate: Per $1,000
Monthly Premium
AD&D
Members
Volume
Rate: Per $1,000
Monthly premium
Total Billed Premium
Rate Guarantee
Life
Members
Volume
Rate: Per $1,000
Monthly Premium
Members
183
$20,810,000
Lives Age Rate I Volume
12
0-29
.058
$1,610,000
29
30-34
.061
$3,140,000
36
35-39
.075
$4,630,000
22
40-44
.117
$2,650,000
28
45-49
.184
$4,070,000
21
50-54
.286
$2,020,000
21
55-59
.456
$2,015,000
8
60-64
.570
$510,000
5
65-69
.820
$155,000
1
70-74
1.348
$10,000
0
75-99
4.280
$0
183
$20,810,000
.030
$3,765,000
Premium
$93
$192
$347
$310
$749
$578
$919
$291
$127
$13
$0
$3,619
Lives
Age
Rate
Volume
Premium I
3
0-29
.093
$255,000
$24
8
30-34
.093
$465,000
$43
14
35-39
.114
$475,000
$54
11
40-44
.164
$560,000
$92
17
45-49
.247
$795,000
$196
12
50-54
.392
$635,000
$249
12
55-59
.630
$375,000
$236
6
60-64
.966
$165,000
$159
2
65-69
1.638
$35,000
$57
1
70-74
3.108
$5,000
$16
0
75-99
6.278
$0
$0
M.-
$1,126
Plan 2- 2109824; 7
I
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
Volume
Rate: Per $1,000
Monthly premium
Total Billed Premium
Rate Guarantee
Life
$3,765,000
030
Elective: Paid by each Member electing coverage
Members 77
Rate: Per $1,000 .200
AD&D
Rate: Per $1,000 .030
Rate Guarantee 3 years
:MTh
$113
3 years
LTheS:tandaJrd
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.
nditi
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; 8
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
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.
For additional information on the available features and benefits of Dependent Life and AD&D Insurance from The Standard, click here:
htip://www.standard.com/group-life-add
Plan 2- 2109824;
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
LTheS:tandaJrd
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
A regular employee of the Employer working 30 or more hours per week.
Benefit Schedule
60%
$11,667
Insured Predisability
Earnings
$7,000
Maximum Monthly Benefit
$100
Minimum Monthly Benefit
90 Days
Benefit Waiting Period
Maximum Benefit Period
To SSNRA
Guarantee Issue Amount
Full Benefit
Employer Contribution
Minimum Participation
Own Occupation Period
Partial/Residual Disability
Preexisting Condition Period
Mental & Nervous Limitation
Substance Abuse Limitation
Other Limited Conditions
Musculoskeletal/Connective
Tissue Limitation
Return to Work Incentive
100%
100%
24 Months
Included
3/12
24 months
24 months
24 months
24 months
12 months
Employee Assistance J Included: 3 face-to-face
Program I
Plan 3- 2109825; 10
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
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; 11
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
Cost
Members
Volume
Rate: Percent of earnings
Monthly Premium
Rate Guarantee
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.
ons
Rate assumes that coverage is currently in force.
Confirmation that you participate in Public Employee Retirement System is required.
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; 12
Proposed Effective Date Prepared for:
October 01, 2019 City of Southlake
IProducer Compensation Discll
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
Plan 3- 2109825;