Item 4HITEM 4H
CITY OF
SOUTHLAKI
MEMORANDUM
July 30, 2014
TO: Shana Yelverton, City Manager
FROM: Stacey Black, Director of Human Resources
SUBJECT: 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.
Action
Requested: 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.
Background
Information: As part of its standard benefit package, the City provides all full-time
employees with Long Term Disability (LTD), Accidental Death and
Dismemberment (AD&D) and Basic Life Insurance. Cigna is the City's
current LTD carrier. 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 Standard is the City's provider
for AD&D and Basic Life Insurance. The City's Basic Life insurance
provides employees with one times their annual salary (up to $50,000)
in life insurance and the 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. The Standard also offers
employees the opportunity to purchase additional voluntary
supplemental life insurance at their own cost. Both carriers have been
the City's provider for insurance since 2006.
In May, the City issued a Request for Proposals for Long Term
Disability, Accidental Death and Dismemberment, and Basic Life
Insurance. The City last issued an RFP for LTD, AD&D and Basic Life
insurance in 2006, and will typically issue an RFP every six years,
depending upon renewal proposals. Five carriers submitted proposals
in response to the RFP, including the current carriers.
Each proposal was reviewed and evaluated based on the following
criteria:
0 experience, qualifications, reputation and references;
Shana Yelverton, City Manager
July 30, 2014
Page 2
• rates;
• schedule of benefits; and
• reporting and ease of billing.
ITEM 4H
Staff carefully reviewed each proposal to determine the best option for
the City. Following an initial review and interviews, Cigna and The
Standard were selected as finalists. Both carriers offered LTD, AD&D,
Basic Life, and Supplemental Voluntary Life insurances at the City's
current benefit levels. A summary of the proposed rates and the
associated annual estimated premium costs are below.
Current
Cigna
The Standard
Coverage
Rate
Est.
Annual
Rate Est.
Annual
Rate Est.
An
LTD
Cost
Cost
Cost
Rate / $100
$ 0.223
$
36,803
$ 0.190 $
31,356
$ 0.320 $
52,811
AD&D
Rate / $1, 000
$ 0.040
$
6,517
$ 0.030 $
4,888
$ 0.040 $
6,517
Basic Life
Rate / $1, 000
$ 0.085
$
13,849
$ 0.110 $
17,922
$ 0.075 $
12,219
Tota I:
$
57,169
F $
54,166
$
71,547
After meeting with both companies and analyzing plan options, staff
recommends selecting Cigna as the provider for LTD, AD&D, and
Basic Life insurance. Although Cigna's Basic Life rate is higher than
the current rate, Cigna's proposal includes a reduced LTD rate if the
City selects Cigna for all three products. Otherwise, Cigna proposes
the current LTD rate for a standalone product. Packaging the products
results in an overall cost savings of slightly more than $3,000. In
addition, Cigna has offered a three year rate guarantee.
There are a number of advantages to selecting Cigna to provide LTD,
AD&D, and Basic Life Insurance in addition to the lower premiums and
three year rate guarantee, including:
• The City has had a favorable experience with the current LTD
plan and by awarding the contract to one carrier it consolidates
billing and administrative processes;
• The voluntary supplemental life insurance premiums are lower
than the current premium structure; and
• Cigna offers additional services for employees as part of the
basic life insurance coverage including will preparation,
emergency travel assistance and identity theft assistance.
Shana Yelverton, City Manager ITEM 4H
July 30, 2014
Page 3
Financial
Considerations: The estimated cost of LTD, AD&D and Basic Life Insurance is $4,514
per month, or $54,166 annually. The annual estimated decrease in
premiums is $3,003 for FY 2015.
The proposed LTD, AD&D and Basic Life Insurance plan costs will be
included in the proposed budget for Fiscal Year 2015.
Strategic Link: Performance Management and Service Delivery: attract, develop and
retain a skilled workforce. C13O2: Become an employer of choice by
developing a plan to recruit, develop and retain employees committed
to excellence.
Citizen Input/
Board Review: N/A
Legal Review: N/A
Alternatives: Deny contract Cigna and seek alternative options.
Supporting
Documents: The following supporting documents are attached:
• RFP Finalist Comparison
• Cigna Proposal
Staff
Recommendation: 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.
Basic Life
AD&D
LTD
Basic Life
AD&D
LTD
*Only if bundled with Basic and AD&D, otherwise reverts to current rate.
Basic Life
AD&D
LTD
Proposed Rates - STANDARD
Basic Life, AD&D and LTD Finalists
Current Rates
Carrier
Estimated Volume
Rate / $1,000
Monthly Cost
Annual Cost
Standard
$ 13,577,000
$ 0.085
$ 1,154
$ 13,849
Standard
$ 13,577,000
$ 0.040
$ 543
$ 6,517
Carrier
Estimated Volume
Rate / $100
Monthly Cost
Annual Cost
Ci na
1 $ 1,375,281
1 $ 0.223
1 $ 3,067
$ 36,803
Total: $ 57,168.02
Proposed Rates - CIGNA
Carrier
Estimated Volume
Rate / $1,000
Monthly Cost
Annual Cost
Cigna
$ 13,577,000
$ 0.110
$ 1,493
$ 17,922
Cigna
$ 13,577,000
$ 0.030
$ 407
$ 4,888
Carrier
Estimated Volume
Rate / $100*
Monthly Cost
Annual Cost
Ci na
$ 1,375,281
$ 0.190
$ 2,613
1 $ 31,356
Total: $
Difference: $
54,165.77
(3,002.25)
Carrier
Estimated Volume
Rate / $1,000
Monthly Cost
Annual Cost
Cigna
$ 13,577,000
$ 0.075
$ 1,018
$ 12,219
Cigna
$ 13,577,000
$ 0.040
$ 543
$ 6,517
Carrier
Estimated Volume
Rate / $100
Monthly Cost
Annual Cost
Ci na
1 $ 1,375,281
$ 0.320
1 $ 4,401
1 $ 52,811
Total: $ 71,547.05
Difference: $ 14,379.03
Prepared For:
City of Southlake
Requested By: LIFETIME BENEFIT INSURANCE LLP
Proposed Effective Date: October 1, 2014
This Proposal Valid Until: September 2, 2014
Underwritten By: Life Insurance Company of North America
The information contained in the following response/proposal is confidential and proprietary information of the insurance company
making the proposal. It is being provided with the understanding that it will not be used by City of Southlake, its representatives or
consultants for any purpose other than the evaluation of the insurance company's proposal in connection with the services sought by
City of Southlake. Dissemination of the information contained herein by City of Southlake, its representatives and consultants shall be
limited to their respective employees who are directly involved in the evaluation process. Under no circumstances is any of the
information contained herein (including excerpts, summaries, extracts and evaluations thereof) to be used, disseminated, disclosed or
otherwise communicated to any person or entity other than City of Southlake and its representatives and consultants involved in the
evaluation process.
.-,-y(.:,ugna,
"Cigna," "Cigna Group Insurance" and the "Tree of Life" logo are registered service marks of Cigna Intellectual Property, Inc.,
licensed for the use by operating subsidiaries of Cigna Corporation. All products and services are provided exclusively by such
operating subsidiaries and not by Cigna Corporation. As used in this proposal, these service marks refer to the insurance company
which has issued this proposal.
City of Southlake
Long Term Disability Proposal
Schedule of Benefits Summary
Eligibility
All active, full-time U.S. Employees of the Employer regularly working a minimum
of 30 hours per week.
Monthly Benefit
60% to $5,000
Benefit Waiting Period
90 days
Definition of Disability
24 Months Own Occupation
Definition of Covered Earnings
Employee's annual wages or salary, including commission, and excluding extra
compensation, bonus, and overtime. Commission will be averaged over a 12 month
eriod.
Eligibility Waiting Period
No waiting period
Earnings Test
80/60 OR
Taxation of Benefits
Taxable Benefit
Benefits below apply to the following classes: 1
Accumulated Sick Leave
Not Included in Benefit Waiting Period
Minimum Benefit
$100 or 10% of benefit
Maximum Benefit Duration
To Age 65
Benefit Reduction Schedule
Traditional graded scale to 65
Integration Type
Full Family
Employer Contribution
100%
Survivors Benefits
3 months lump sum
Continuation of Insurance
Family Medical Leave (12 weeks)
Family Medical Military Leave (12 weeks)
-Dre-Existing Condition Limitation
3 months Prior/12 months Insured
ental Illness Limitation
24 Month Lifetime Limitation
Substance Abuse Limitation
24 Month Lifetime Limitation
Chemical Sensitivity
No Limitation
Subjective Symptom Limitation
No Limitation
Return to Work Incentive
Included
Trial Work Days
Unlimited
Rehabilitation Benefits
Included
Life Assistance Program
Included
Number of Eligible Employees
283
For additional descrintions_ see Kev Definitions and Provkinns cectinn helnw
Coverage
Monthly Covered Payroll
Monthly Rate per $100 of
Monthly Covered Payroll
Monthly Premium
LTD
1,108,001
$0.19
$2,105
Rates are guaranteed for 3 years
Rates are only valid if the product is sold as part of this package
LONG TERM DISABILITY COIYM I[SSION SUMMARY
Rates include a Flat 15% Commission
City of Southlake
Basic Term Life Proposal
Schedule of Benefits Summary
Employee Eligibility
All active, full-time U.S. Employees of the Employer regularly working a
minimum of 30 hours per week.
Employee Eligibility Waiting Period
No waiting period
Employee Annual Compensation
Employee's annual wages or salary, including commission, and excluding
Definition
extra compensation, bonus, and overtime. Commission will be averaged
over a 12 month period.
Employee Basic Life Benefit
1 times annual compensation rounded to the nearest $1,000 not to exceed
$50,000
Employee Guaranteed Issue Amount
1 times annual compensation rounded to the nearest $1,000 not to exceed
$50,000
Employee Minimum Benefit
No minimum benefit
Employee Benefit Reduction
65% @ age 70, 45% @ age 75, 30% @ age 80, 20% @ age 8515% @ age
Schedule Benefits Reduce to:
90
Waiver of Premium with
Must be totally disabled before age 60
Extended Death Benefit
6 month waiting period
Benefit provided to age 65
Extended Death Benefit coverage during waiting period, no premiums
required during this time
Continuation for Disability
Life coverage continued for a disabled employee over the age of 60 on a
(Age 60+)
continuing premium paying basis for up to 12 months, while policy is in
force
Continuation of Insurance
Family Medical Leave (12 weeks)
Family Military Convalescence Support (26 weeks)
Leave of Absence (2 months)
Portability
Employee only
Coverage ends at age 70
Inforce amounts do not require medical underwriting. Increases in
coverage are allowed up to plan max with medical underwriting
Terminal Illness
The lesser of 75% up to $50,000 for Basic benefits
Coverage available for employees and spouses
Employer Contribution
100°l0
Number of Eligible Employees
283
Beneficiary Services
- Comprehensive package of financial, bereavement and legal counseling -
Available for benefit payments >= $5,000
BASIC TERM LIFE RATE SUMMARY
Coverage
Estimated Volume
Rate
Estimated Monthly
Cast
Basic Employee Life
Em lgive
$11,529,600
$0.11 per $1,000
$1,268
We have separate rates for ported individuals.
Rates are guaranteed for 3 years
Rates are only valid if the product is sold as part of this package
BASIC TERM LIFE COMMISSION SUMMARY
Rates include a Flat 15% Commission
City of Southlake
Basic Accident Proposal
Schedule of Benefits Summary
Eligibility
All active, full-time U.S. Employees of the Employer regularly
working a minimum of 30 hours per week.
Benefits:
Covered Earnings Definition
Employee's annual wages or salary, including commission, and
excluding extra compensation, bonus, and overtime. Commission will
be averaged over a 12 month period.
Eligibility Waiting Period
None
Employee Benefit
1 times Base Annual Earnings rounded to the next higher $1,000
subject to a maximum of $50,000
Coverage
Basic, Employer paid, 24 Hour Accidental Death & Dismemberment
Benefits. Other enhancements will be defined in the policy.
Loss of Life
100% of the Principal Sum
Dismemberment
Loss of Two or More Hands or Feet
100% of the Principal Sum
Loss of Sight of Both Eyes
100°% of the Principal Sum
Loss of Speech and Hearing (in both ears)
100% of the Principal Sum
Quadriplegia (Total paralysis of upper and
100°% of the Principal Sum
lower limbs)
Paraplegia (Total paralysis of both lower
75% of the Principal Sum
limbs)
Hemiplegia (Total paralysis of upper and
50% of the Principal Sum
lower limbs on one side of the body)
Uniplegia (Total paralysis of one upper or
25% of the Principal Sum
one lower limb)
Loss of One Hand or Foot
50% of the Principal Sum
Loss of Sight in One Eye
50°% of the Principal Sum
Severance and Reattachment of One Hand
50% of the Principal Sum
or Foot
Loss of Speech
50°% of the Principal Sum
Loss of Hearing (in both ears)
50% of the Principal Sum
Loss of Thumb and Index Finger of the
25% of the Principal Sum
Same Hand
Loss of all Four Fingers of the Same Hand
25% of the Principal Sum
Loss of all the Toes of the Same Foot
20% of the Principal Sum
Coma
Monthly Benefit
1 % of Principal Sum
Number of Monthly Benefits
11
When Payable
At the end of each month during which the Covered Person remains
comatose
Lump Sum Benefit
100% of Principal Sum
When Payable
Beginning of 12th Month
Accidental Death & Dismemberment Schedule of Benefits: We will pay the benefit for any one of the Covered Losses
listed in the Schedule of Benefits, if the Covered Person suffers a Covered Loss resulting directly and independently of
all other causes from a Covered Accident within the applicable time period specified in the Schedule of Benefits.
If the Covered Person sustains more than one Covered Loss as a result of the same Covered Accident, benefits will be
paid for the Covered Loss for which the largest available benefit is payable.
If the loss results in death, benefits will only be paid under the Loss of Life benefit provision.
Any Loss of Life benefit will be reduced by any paid or payable Accidental Dismemberment benefit. However, if such
Accidental Dismemberment benefit equals or exceeds the Loss of Life benefit, no additional benefit will be paid.
Extension of Coverage:
Coverage expanded to cover the following circumstances:
• Exposure & Disappearance - loss occurs due to exposure; disappearance if not found within one year
Benefit Reductions
We can help you meet your Age Discrimination in Employment Act
(ADEA) responsibilities by extending coverage to all active
employees, regardless of age.
Benefits reduced for employees based on ages at time of accident
according to the following schedule:
65% @age 65-69, 45% gage 70-74, 30% @age 75-79; 20% @age
80 or over
Continuation of Insurance
Family Medical Military Leave (12 weeks)
Leave of Absence (2 months)
Additional Benefits:
Child Day Care
Reimburse child care expenses if the Employee or covered spouse
dies & is survived by a Covered Dependent Child
Additional 3% of principal sum; maximum $3,000 per year; for 4
years oruntilage 13, whichever occurs first
Law Enforcement Officer's Benefit
We will pay the benefit shown in the Schedule of Benefits, subject to
the following conditions and exclusions, on receipt of due proof that
the Covered Person, while serving as a Law Enforcement Officer,
suffers a Covered Loss that results directly and independently of all
other causes from a Covered Accident. The Covered Accident must
occur in the line of duty. Benefits will not be paid for a loss caused
by or resulting from any of the following:
1. injury resulting from maintenance, repair or cleaning of
firearms;
2. injury sustained in consequence of the illegal use of fire arms
by the Covered Person
Additional 100% of applicable principal sum to $50,000
Seatbelt and Airbag Benefit
Covered Person dies directly and independently of all other causes
from a Covered Accident while wearing a seatbelt and riding in a
private passenger automobile.
If seatbelt benefit is payable, an additional benefit is provided if
Covered Person was also positioned in a seat protected by a properly
—functioning and properly deployed Supplemental Restraint System
Airbag.
Seatbelt: Additional 10% of the principal sum to a maximum of
$25,000
Airbag: Additional 5% of the principal sum to a maximum of
$10,000
Special Education Benefit I (Child)
We will pay the Benefit below for each qualifying Dependent Child
of a Covered Person whose death resulted from a Covered Accident,
if the child enrolls as a full-time student at an accredited school of
higher learning within 365 days from the date of the Covered
Accident, continues his education as a full-time student and incurs
expenses for tuition, fees, books, room and board, transportation and
any other costs payable directly to, or approved and certified by, such
school.
Additional 3% of Principal Sum, up to a maximum of $3,000 per
year for up to 4 years
If no dependent child qualifies we will pay the following default
amount: $1,000
Spouse Training Reimburse covered Spouse who receives education/training for
employment within three years of the covered employee's death as a
result of a loss
Additional 3% of principal sum to $3,000
I Beneficiary Designation I Recognize Prior Beneficiary Designations or Pay According to
Succession Schedule (if no beneficiary has been designated)
BASIC ACCIDENT RATE SUMMARY
Number of Eligible Lives: 283
Coverage
Estimated Volume
Rate/S1,000
Estimated Monthly
Cost
Class 1
Employee Only
$11,529,600
$0.03
$346
Premium rates are guaranteed for 36 months provided that the first year premium exceeds $1,200.
Rate guarantee is subject to all provisions of the policy including the policy's termination provisions.
Rates are only valid if the product is sold as part of this package
BASIC ACCIDENT COMMISSION SUMMARY
Rate includes a Flat 15% Commission
City of Southlake
Voluntary Term Life Proposal
Schedule of Benefits Summary
Employee Eligibility
All active, full-time U.S. Employees of the Employer regularly working a
minimum of 30 hours per week.
Employee Eligibility Waiting Period
No waiting period
Employee Annual Compensation
Employee's annual wages or salary, including commission, and excluding
Definition
extra compensation, bonus, and overtime. Commission will be averaged
over a 12 month period.
Employee Voluntary Life Benefit
Units of $10,000 to $500,000, not to exceed 5 times Annual Earnings
Employee Guaranteed Issue Amount
$130,000
Employee Minimum Benefit
No minimum benefit
Spouse Eligibility
Employees must participate in voluntary plan for dependents to
participate
Domestic Partner Z Civil Union
State -registered civil unions/domestic partnerships included (state
Coverage
mandate). Employer -recognized Domestic Partners may optionally be
included (definition to be agreed upon).
Spouse Life Benefit
Units of $5,000 to the lesser of $250,000 or 50°% of Employee's Voluntar,
Life Insurance Amount
Infant/Child Life Benefit
Birth to 6 months: $1,000
6 months to 26 years: Units of $1,000 to $10,000
Dependent Guaranteed Issue Amount
Spouse: $25,000
Child: All Guaranteed Issue
Initial Enrollment Event
Offered for an effective date of 101112014
Applies to all eligible employees (including dependents)
Enrollment Guaranteed Issue:
• Employee: Up to case level Guaranteed Issue*
• Spouse: Up to case level Guaranteed Issue*
*Any benefit amounts above the case level Guaranteed Issue are subject to
full medical underwritin
Ongoing Enrollment Event
None
Employee Benefit Reduction
65°% @ age 70, 45°% @ age 75, 30% @ age 80, 20% @ age 85, 15% @
Schedule Benefits Reduce to:
age 90
Waiver of Premium with
Must be totally disabled before age 60
Extended Death Benefit
6 month waiting period
Benefit provided to age 65
Extended Death Benefit coverage during waiting period, no premiums
required during this time
Continuation for Disability
Life coverage continued for a disabled employee over the age of 60 on a
(Age 60+)
continuing premium paying basis for up to 12 months, while policy is in
force
Continuation of Insurance
Family Medical Leave (12 weeks)
Family Military Convalescence Support (26 weeks)
Leave of Absence (2 months)
Portability
Employee and covered dependents
Coverage ends at age 70
Inforce amounts do not require medical underwriting. Increases in
coverage are allowed up to plan max with medical underwriting
Terminal Illness
The lesser of 75% up to $500 000 for Voluntary benefits
Coverage available for employees and spouses
Participation Requirement
30% of eligible employees
Suicide Exclusion
We do not pay death benefits if insured commits suicide during first two
years of coverage This two year suicide exclusion also applies to all later
increases in coverage
Employee Contribution
100%
Number of Eligible Employees
283
Beneficiary Services
- Comprehensive package of financial, bereavement and legal counseling -
Available for benefit payments >= $5,000
Enrollment Communications &
Support
- Client -specific brochures & applications
Coverage
Premium Rate
Voluntary Term Life
Errs plojgee
See Step Rates Table below
Voluntary Dependent Life
-
Err. S ouse
See Step Rates Table below—,
ClnZc
$0.2500 per $1,000 1
VOLUNTARY LIFE INSURANCE STEP RATES FOR EMPLOVFV AND.WnITRF
Age
Employee and Spouse
Rate per $1,000
<20
$0.059
20-24
$0.093
25-29
$0.093
30-34
$0.093
35-39
$0.11"
40-44
$0.164
45-49
$0.247
50-54
$0.392
55-59
$0.630
60-64
$0.966
65-69
$1.638
70-74
$3.108
75-79
$6.278
80-84
$12.472
85-89
$22.993
90-94
$37.516
95-99
$56.947
We have separate rates for ported individuals.
Rates are guaranteed for 3 years
Rates are only valid if the product is sold as part of this package
VOLUNTARY TERM LIFE COMMISSION SUMMARY
Rates include a Flat 15% Commission
City of Southlake
Voluntary Accident Proposal
Schedule of Benefits Summary
Eligibility
All active, full-time U.S. Employees of the Employer regularly
working a minimum of 30 hours per week.
Benefits:
Covered Earnings Definition
Employee's annual wages or salary, including commission, and
excluding extra compensation, bonus, and overtime. Commission will
be averaged over a 12 month period.
Eligibility Waiting Period
None
Employee Benefit
Units of $10,000 to $500,000, not to exceed 5 times Annual Earnings
Coverage
Voluntary, Employee paid, 24 Hour Accidental Death &
Dismemberment Benefits. Other enhancements will be defined in the
policy.
Domestic Partner f Civil Union Coverage
State -registered civil unions/domestic partnerships included (state
mandate). Employer -recognized Domestic Partners may optionally be
included (definition to be agreed upon).
Loss of Life
100% of the Principal Sum
Dismemberment
Loss of Two or More Hands or Feet
100% of the Principal Sum
Loss of Sight of Both Eyes
100°% of the Principal Sum
Loss of Speech and Hearing (in both ears)
100°% of the Principal Sum
Quadriplegia (Total paralysis of upper and
100% of the Principal Sum
lower limbs)
Paraplegia (Total paralysis of both lower
75% of the Principal Sum
limbs)
Hemiplegia (Total paralysis of upper and
50% of the Principal Sum
lower limbs on one side of the body)
Uniplegia (Total paralysis of one upper or
25% of the Principal Sum
one lower limb)
Loss of One Hand or Foot
50% of the Principal Sum
Loss of Sight in One Eye
50% of the Principal Sum
Severance and Reattachment of One Hand
50% of the Principal Sum
or Foot
Loss of Speech
50% of the Principal Sum
Loss of Hearing (in both ears)
50% of the Principal Sum
Loss of Thumb and Index Finger of the
25% of the Principal Sum
Same Hand
Loss of all Four Fingers of the Same Hand
25% of the Principal Sum
Loss of all the Toes of the Same Foot
20% of the Principal Sum
Coma
Monthly Benefit
1 % of Principal Sum
Number of Monthly Benefits
11
When Payable
At the end of each month during which the Covered Person remains
comatose
Lump Sum Benefit
100% of Principal Sum
When Payable
Beginning of 12th Month
Accidental Death & Dismemberment Schedule of Benefits: We will pay the benefit for any one of the Covered Losses
listed in the Schedule of Benefits, if the Covered Person suffers a Covered Loss resulting directly and independently of
all other causes from a Covered Accident within the applicable time period specified in the Schedule of Benefits.
If the Covered Person sustains more than one Covered Loss as a result of the same Covered Accident, benefits will be
paid for the Covered Loss for which the largest available benefit is payable.
If the loss results in death, benefits will only be paid under the Loss of Life benefit provision.
Any Loss of Life benefit will be reduced by any paid or payable Accidental Dismemberment benefit. However, if such
Accidental Dismemberment benefit equals or exceeds the Loss of Life benefit, no additional benefit will be paid.
Extension of Coverage:
Coverage expanded to cover the following circumstances:
• Exposure & Disappearance - loss occurs due to exposure; disappearance if not found within one year
Spouse Benefit
Units of $5,000 to $250,000
Spouse Maximum Principal Sum
$250,000
Child Benefit
Units of $1,000 to $10,000
Child Maximum Principal Sum
$10,000
Benefit Reductions
We can help you meet your Age Discrimination in Employment Act
(AREA) responsibilities by extending coverage to all active
employees, regardless of age.
Benefits reduced for employees based on ages at time of accident
according to the following schedule:
65% @age 65-69, 45°% @age 70-74, 30% @age 75-79; 20% @age
80 or over
Continuation of Insurance
Family Medical Military Leave (12 weeks)
Additional Benefits:
Child Day Care
Reimburse child care expenses if the Employee or covered spouse
dies & is survived by a Covered Dependent Child
Additional 3% of principal sum; maximum $3,000 per year; for 4
ears or until age 13, whichever occurs first
Law Enforcement Officer's Benefit
We will pay the benefit shown in the Schedule of Benefits, subject to
the following conditions and exclusions, on receipt of due proof that
the Covered Person, while serving as a Law Enforcement Officer,
suffers a Covered Loss that results directly and independently of all
other causes from a Covered Accident. The Covered Accident must
occur in the line of duty. Benefits will not be paid for a loss caused
by or resulting from any of the following:
1. injury resulting from maintenance, repair or cleaning of
firearms;
2. injury sustained in consequence of the illegal use of fire arms
by the Covered Person
Additional 100% of applicable principal sum to $50,000
Seatbelt and Airbag Benefit
Covered Person dies directly and independently of all other causes
from a Covered Accident while wearing a seatbeh and riding in a
private passenger automobile.
If seatbeh benefit is payable, an additional benefit is provided if
Covered Person was also positioned in a seat protected by a properly
—functioning and properly deployed Supplemental Restraint System
Airbag.
Seatbelt: Additional 10% of the principal sum to a maximum of
$25,000
Airbag: Additional 5% of the principal sum to a maximum of
$10,000
Special Education Benefit I (Child)
We will pay the Benefit below for each qualifying Dependent Child
of a Covered Person whose death resulted from a Covered Accident,
if the child enrolls as a full-time student at an accredited school of
higher learning within 365 days from the date of the Covered
Accident, continues his education as a full-time student and incurs
expenses for tuition, fees, books, room and board, transportation and
any other costs payable directly to, or approved and certified by, such
school.
Additional 3% of Principal Sum, up to a maximum of $3,000 per
year for up to 4 years
If no dependent child qualifies we will pay the following default
amount: $1,000
Spouse Training Reimburse covered Spouse who receives education/training for
employment within three years of the covered employee's death as a
result of a loss
Additional 3% of principal sum to $3,000
Beneficiary Designation Recognize Prior Beneficiary Designations or Pay According to
Succession Schedule (if no beneficiary has been designated)
Number of Eligible Lives: 283
Coverage
Ratel$1,000
Class 1
Employee Only
$0.0340
Spouse Only
$0.0260
Children Only
$0.0280
Rates are subject to change.
Premium rates are guaranteed for 36 months provided that the first year premium exceeds $1,200.
Rate guarantee is subject to all provisions of the policy including the policy's termination provisions.
Rates are only valid if the product is sold as part of this package
VOLUNTARY ACCIDENT COMMISSION SUMMARY
Rate includes a Flat 15% Commission
Cigna Programs and Services Provided at No Additional Cost
Identity Theft - provides specialized Personal Case Managers who assist consumers who have experienced an
identity theft event.
• Will Preparation and Funeral Planning Services - provides online access state -specific legal documentation for
Wills and Power of Attorney and include valuable resources for estate and funeral planning.
• Healthy Rewards® - provides discounts on a variety of health and wellness products and services.
• Cigna's Life Assistance & Work/Life Support Program - provides 3 face to face visits to counselors to address
emotional issues, as well as online resources and interactive tools.
• Cignasurrance® - provides assistance from expert resources in financial, legal, and behavioral health services for
beneficiaries with claim payments of $5,000 or more.
• Cigna Secure Travel - provides comprehensive protection when traveling 100 miles or more from home, including
unlimited medical evacuation and repatriation benefits
• AD&D Conversion - available up to age 70; to a maximum of $250,000.
• My Secure Advantage TM -offers customers with approved long-term disability claims (and their household
members) access to expert "money coaching" for all types of financial planning and challenges.
Superior Service and Simplified Administration
• Dedicated Account Managers to oversee plan design effectiveness; provide ongoing consultative analysis and make
recommendations to optimize productivity/minimize costs.
• Dedicated Implementation Coordinators to help ensure easy plan setup, answer questions, resolve issues and drive
employee awareness and education through marketing and communications.
• Dedicated Clinical and Expert Resources which includes over 800 disability claim managers in four offices, 80
medical professionals, 9 medical directors, 35 vocational professionals, 65+ intake specialists and access to over
1,100 nurses and 500 doctors representing over 40 clinical specialties.
• Comprehensive Reporting and Online Tools to help make informed decisions and manage costs.
• Verbal Authorization and Telephonic Intake - Employees calling to report a disability claim can provide
authorization to access medical information using a secure, confidential interactive voice response system, which
allows for faster disability claim processing.
• Stay -at -Work Services - help employees with physical/psychological limitations that are at increased risk of a
disability get the support they need to stay productive and on the job.
• Social Security Advocacy - program offers expert resources to help qualified employees apply and be approved for
Social Security Disability Insurance.
• Cigna's "Work Wellness" Website http://www.cigna.com/workwellness is an online resource for customers which
includes useful information on disability and return to work, general information on family medical leave, managing
their particular health condition at work and more.
Disability Contract Features
• Return to Work Incentive Benefit
For the first 24 months of the benefits payable - allows an individual through a combination of work earnings and
disability benefit, the potential to obtain 100% of pre -disability income.
• Use of Trial Work Days
Cigna offers an unlimited Number of days an employee can attempt to return to work without extending the
elimination period.
• Rehabilitation Program
Rehabilitation expenses (which can include expenses for medical, education, moving, family care or other) are paid
for at Cigna's discretion. No rehabilitation expense cap exists in our contract.
• FICA Services
Cigna offers three level of service for Employer Paid business - Self -report and pay, FICA reimbursement and FICA
match - to accommodate the specific needs of our disability clients.
Maximum Benefit Period
'his is the maximum length of time for which we will pay Disability Benefits to a disabled employee. Benefit payments
may end earlier if the employee no longer qualifies under the terms or conditions of this policy.
Age at Start of Disability Maximum Benefit Duration
age 62 or younger the employee's 65th birthday or the 42nd monthly_disabili
age 63
age 64
age 65
ige 66
age 67
age 68
age 69 or older
the 36th monthly disability benefit
the 30th monthly disability benefit
the 24th monthly disability benefit
the 21 st monthly disability benefit
the 18th monthly disability benefit
the 15th monthly disability benefit
the 12th monthly disability benefit
Life Contract Features
Extended Death Benefit with Waiver of Premium:
• We provide up to 12 months of premium -free continued life insurance coverage for disabled employees - even
if they're attempting to return to work
• We also provide up to 18 months of additional premium -free coverage if the employee is participating in a
rehabilitation program. And if the employee is too sick to fully work again, Cigna's life insurance coverage will
continue subject to the waiver of premium and continuation provisions quoted
"Linked waiver"
Automatically starts the claim process to see if the customer qualifies for Term Life premiums to be waived while
they're out on disability (requires Cigna Disability coverage)
Portability
Employees have the option to port their Group Term Life coverage at pooled port rates listed below
Age
Rate
<20
$0.153
20-24
$0.144
25-29
$0.153
30-34
$0.177
35-39
$0.190
40-44
$0.243
45-49
$0.384
50-54
$0.726
55-59
$1.347
60-64
$2.461
65-69
$4.065
Rates for ported insureds are based on the company's pooled experience for ported certificates and are higher than active
employee rates. Rates for ported insureds are renewed annually and are not subject to any rate guarantee proposed for
active employees. Ported coverage ends at age 70.
AD&D Contract Features
tcident Exclusions
In addition to any benefit -specific exclusions, benefits will not be paid for any Covered Injury or Covered Loss
which, directly or indirectly, in whole or in part, is caused by or results from any of the following unless coverage is
specifically provided for by name in the Description of Benefits Section:
l . intentionally self-inflicted Injury, suicide or any attempt thereat while sane or insane;
2. commission or attempt to commit a felony or an assault;
3. commission of or active participation in a riot, insurrection or Terrorist Act;
4. declared or undeclared war or act of war;
5. flight in, boarding or alighting from an Aircraft or any craft designed to fly above the Earth's surface:
a. except as a fare -paying passenger on a regularly scheduled commercial airline;
b. being flown by the Covered Person or in which the Covered Person is a member of the crew;
c. being used for:
i. crop dusting, spraying, seeding, giving flying instruction, receiving flying instruction, fire fighting, sky
writing, sky diving, hang gliding, pipeline inspection, power line inspection, aerial photography, aerial
exploration, racing, endurance tests, stunt, acrobatic flying or
ii. any operation that requires a special permit from the FAA, even if it is granted (this does not apply if the
permit is required only because of the territory flown over or landed on)
d. designed for flight above or beyond the earth's atmosphere;
e. an ultra -light or glider;
f. being used for the purpose of parachuting or skydiving;
g. being used by any military authority, except an Aircraft used by the Air Mobility Command or its foreign
equivalent;
6. Travel in any Aircraft owned, leased or controlled by the Policyholder, Subscriber, or any of its subsidiaries or
affiliates. An Aircraft will be deemed to be "controlled" by the Policyholder, Subscriber if the Aircraft may be
used as the Policyholder, Subscriber wishes for more than 10 straight days, or more than 15 days in any year;
7. A Covered Accident that occurs while on active duty service in the military, naval or air force of any country or
international organization. Upon Our receipt of proof of service, We will refund any premium paid for this time.
Reserve or National Guard active duty training is not excluded unless it extends beyond 31 days;
8. operating any type of vehicle under the influence of alcohol or any drug, narcotic or other intoxicant including
any prescribed drug for which the covered person has been provided a written warning against operating a
vehicle while taking it. Under the influence of alcohol, for purposes of this exclusion, means intoxicated, as
defined by the law of the state in which the Covered Accident occurred;
9. Voluntary ingestion of any narcotic, drug, poison, gas or fumes, unless prescribed or taken under the direction of
a Physician and taken in accordance with the prescribed dosage;
10 Sickness, disease, bodily or mental infirmity, bacterial or viral infection or medical or surgical treatment thereof,
except for any bacterial infection resulting from an accidental external cut or wound or accidental ingestion of
contaminated food.
.............._
PROPOSAL PROVISIONS'
• This is not a contract...
This proposal outlines some of the important features of the proposed group insurance program. The controlling
provisions will be in the group insurance policy, and this proposal is not intended in any way to modify the provisions
or their meanings.
If you decide to purchase the plan proposed here, we will send you a policy that fully describes all of the provisions of
the group disability, term life or AD&D insurance coverage to which you and Life Insurance Company of North
America (Cigna) have agreed.
To accept the terms of this proposal, you must notify Cigna of your acceptance by that date, and pay premium equal
to the Total Basic Estimated Monthly Cost on the Schedule of Benefits Summary. This proposal may be withdrawn
by Cigna at any time before acceptance.
Eligibility
Cigna's eligibility requirements assume that employees are working on a full-time basis, and citizens of the United
States, and working in the United States. Part-time, seasonal, temporary, contracted, leased or severed employees are
not eligible, unless otherwise noted.
• Policy on Rate Changes
The rates and fees quoted within the proposal are based on information furnished to Cigna for the purpose of
developing a proposal of group insurance. Cigna has assumed that the demographic and plan design information
provided will be an accurate representation of your company at the time of implementation. Premium rates are
guaranteed as noted in the product schedule of benefits. These rates and the guarantee assume that the number of
eligible or insured employees does not change by more than 15% from the date of the census provided.
• Policy on Contractual Language
Cigna's contract language will be used without modification. Cigna will attempt to match the intent of disclosed
policy provisions at the time of quote, but will not duplicate the existing policy language.
• Medical Underwriting Status
Medical Underwriting Activity Status Reports are sent to the location(s) designated by the employer and are typically
distributed on a monthly basis. If online Medical Evidence of Insurability is quoted, Medical Underwriting Activity
Reports (reporting status of medically underwritten coverage) are sent electronically to the employer and are typically
distributed on a weekly basis.
• Producer Compensation
Cigna may have entered into, or may enter into, agreements with brokers, under which the insurance company
compensates brokers for providing marketplace intelligence and other services intended to enhance the effectiveness
of the insurance company's business. Cigna may also invite brokers to participate in events sponsored by the
insurance company for the same purposes.
Any compensation paid may be based on meeting targets for new business production and persistency, and, if paid, is
funded from the insurance company's overhead and is based on the broker's overall book of business with the
insurance company. Any such payments are separate from commissions and, if applicable, will be included in ERISA
Form 5500, Schedule A information provided by the insurance company.