Item 5Klinty oar aouiniaxe, i exas
MEMORANDUM
July 21, 2006
TO: Shang Yelverton, City Manager
FROM: Kevin Hugman, Director of Human Resources
SUBJECT: Approve a contract with CIGNA Group Insurance to provide employee long
term disability (LTD) benefits
Action Requested: City Council consider approval of a contract with CIGNA Group Insurance to
provide employee long term disability (LTD) benefits for Fiscal Year 2006-
2007.
Background
Information: In May 2006, the City bid out its employee insurance benefits. These benefits
include medical, dental, group life insurance (basic, supplemental and
Accidental Death and Dismemberment), long term disability, flexible spending
account (Section 125) administration, and optional vision coverage. Bids were
received on June 26, 2006.
A total of 28 carriers submitted 57 proposals for employee benefit plans. A
summary of the bids received is attached (Attachment A).
Four carriers submitted five different proposals for LTD benefits. Staff
reviewed the proposals on the following criteria:
• Experience and reputation
• Proposed schedule of benefits
• Rates
• Provider network access / penetration
• Reporting and cost management
Based on this review, staff recommends CIGNA as providing the best plan
benefits and the lowest rates. CIGNA Group Insurance has been rated A-
( "Excellent ") or better for the last 15 years by A.M. Best. CIGNA has provided
a two -year rate guarantee.
LTD:
Shana Yelverton, City Manager
July 21, 2006
Page 2
Financial
Considerations: The proposed LTD insurance plan costs are within budget amounts for the
proposed FY 2006 -2007 Budget. The proposed rates represent a decrease of
approximately $3,391 per year when compared to current rates.
Citizen Input/
Board Review: Not Applicable.
Legal Review: The City Attorney reviewed the Request for Proposals (RFP) and applicable
documents.
Alternatives: Denial of contract with CIGNA; seek alternatives.
Supporting
Documents:
• Summary of Bids Received
Staff
Recommendation: City Council approve a contract with CIGNA for employee long term
disability (LTD) benefits, effective October 1, 2006 with guaranteed rates
through September 30, 2008.
Staff Contact: Kevin Hugman, Director of Human Resources
Ciimmary of Rirlc Par- aivarl
Insurance Company
Agent
Medical
Dental
Basic 1
Supp Life
1 AD&D
LTD
Vision
Flex Plan
Aetna
Lifetime Benefits I Bob Mundlin
X
X
X
United Health Care
Lifetime Benefits / Bob Mundlin
X
X
Blue Cross Blue Shield
Lifetime Benefits / Bob Mundlin
Al Boenker Insurance
X
X
Ameritas Group
Lifetime Benefits / Bob Mundlin
X
Total Administrative Service Corp.
Lifetime Benefits I Bob Mundlin
X
X
CompBenefits
Lifetime Benefits / Bob Mundlin
X
X
Guardian Life Insurance Co.
Greg Thompson
X
X
Guardian Life Insurance Co.
Lifetime Benefits 1 Bob Mundlin
X
X
Delta Dental
None
X
Sun Life Financial
Lifetime Benefits / Bob Mundlin
X
X
Safeguard
Lifetime Benefits 1 Bob Mundlin
X
X
MetLife
Lifetime Benefits 1 Bob Mundlin
X
AIG American General
Lifetime Benefits I Bob Mundlin
X
X
Dental Select
Lifetime Benefits 1 Bob Mundlin
X
Principal Financial Group
Summit Financial / Jim Vollmer
X
Mutual of Omaha
Lifetime Benefits / Bob Mundlin
X
Unimerica
None
X
Jefferson Pilot Financial
Lifetime Benefits 1 Bob Mundlin
X
Standard Insurance Company
Lifetime Benefits I Bob Mundlin
X
Prudential Financial
Lifetime Benefits / Bob Mundlin
X
X
Fort Dearborn Life
Lifetime Benefits 1 Bob Mundlin
X
X
CIGNA
Lifetime Benefits 1 Bob Mundlin
X
X
Unum Provident
Lifetime Benefits I Bob Mundlin
X
X
LifeRe
Lifetime Benefits 1 Bob Mundlin
X
X
Benefit Management Admin (BMA)
Lifetime Benefits / Bob Mundlin
X
AdminOne Corporation
Summit Financial 1 Jim Vollmer
X
Spectera
Lifetime Benefits 1 Bob Mundlin
X
I VSP
Lifetime Benefits/ Bob Mundlin
X
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7/25/2006