HomeMy WebLinkAbout20110815 - VI-09
City Council Memorandum To: Mayor Hicks & City Councilmembers From: Melanie Mesko Lee, Assistant City Administrator Date: August 11, 2011 Item: Life, Long-Term Disability, and Dental
Insurance Council Action Requested: Accept bids for life, long-term disability and dental insurance, effective January 1, 2012. Background Information: Earlier this year, the City changed
insurance brokers for life, long-term disability, long-term care, and dental insurance. As part of that change, RFP’s were solicited for rates for the life, LTD, and dental plans (long-term
care coverage has limited availability, so was excluded from the RFP process). Based on the RFP’s received, it is staff’s recommendation that the following plans be approved, Long-Term
Disability—Change to CIGNA. There are additional coverage benefits available through this change, and the premium will decrease and provide a savings of approximately $8,400 annually
to the City. This rate is guaranteed for 3 years. Life Insurance—Remain with Minnesota Life. There is a decrease in the rate offered for the basic/AD&D coverage paid by the City which
will provide an annual savings of approximately $4,800. Additionally, supplemental coverage rates, which are paid by employees, will also decrease. These rates are guaranteed for 3 years.
Dental Insurance—Remain with Delta Dental, but change the term of the coverage from a midyear (July 1-June 30) to a calendar year, which is consistent with all other insurance options
available through the City. This change will reduce confusion among employees on when dental coverage may be changed during the mid-year annual open enrollment period, as well as allow
the City to streamline all insurances into one annual open enrollment period. This will result in a slight increase in premiums, but the rates charged effective January 1, 2012 are the
same as those which would be charged effective with a July 1, 2012 renewal should the City make no other change to our current dental insurance option.
Financial Impact: Reduction in both City contribution to life and long-term disability coverage of approximately $13,000 annually, as well as a reduction in supplemental life insurance
premiums paid by employees. There is a slight increase in the dental insurance rates with a change in the term of the coverage renewal dates. These reductions have been incorporated
into the proposed 2012 budget. Advisory Commission Discussion: N/A Council Committee Discussion: N/A Attachments: None