CITY OF
HUMAN RESOURCES DEPARTMENT
TO: Honorable Mayor and
Commissioners
FROM:
BY: Ernest
King, Human Resources Director
DATE: September
12, 2008
RE: Employee
Group Insurance Renewal - Fiscal Year 2008/09
Currently, the City has independent agreements with five vendors for our employee group insurance. These vendors and associated benefits are listed below:
|
Vendors |
Benefit |
|
|
Health and Vision |
|
Comp Benefits |
Dental |
|
Reliance |
Life Insurance |
|
Reliance |
Long-Term Disability Management |
|
|
Long-Term Disability Non-Management |
Health/Vision
The City’s contract for group Health and Vision insurance expires on September 30, 2008. Florida League of Cities (FLC), utilizing United Healthcare network, currently provides group health insurance coverage to City employees. It also provides vision insurance through Vision-Care.
Based on FLC’s proposal for this year, the amount estimated and allocated in FY 08/09 budget ($1,234,931) is actually$147,456 lower than the amount budgeted in 07/08.
According to our year end projections, the actual City cost for FY 07/08 will be approximately $1,107,561 ($274,826 under budget). These savings are associated with the proactive budgetary constraint measures implemented by the City Administration in anticipation of the impact of the Property Tax Reform legislature and staff reductions due to outsourcing of various positions.
The budgeted amount for FY 08/09 ($1,234,931) is inclusive of an 11.5% increase in the rate. FLC initially proposed a rate increase of 25.00%. However, due to staff’s diligent negotiations, we were able to reduce the proposed rate increase to 11.5% for the City’s current group Health Insurance Plan and no increase for Vision Insurance Plan as illustrated in the following table:
|
Group
Health Monthly Rates |
Current 07/08
|
Proposed 08/09
|
|
Employee (only) |
429.02 |
478.70 |
|
Employee + Children |
812.23 |
906.28 |
|
Employee + Spouse |
931.97 |
1,039.89 |
|
Family |
1,315.18 |
1,467.47 |
Vision Monthly Rate
|
Current 06/07
|
Proposed 07/08
|
|
Employee (only) |
5.74 |
5.74 (no change) |
|
Employee +1 |
14.17 |
14.17 (no change) |
|
Family |
28.34 |
28.34 (no change) |
Dental
The City’s contract with Humana/Comp Benefits for dental insurance expires on September 30, 2008. Comp Benefits has proposed to renew our current Dental Plan (CS 250) with only a five percent (5%) increase from 2007/08 rates as indicated in the following table:
Dental Monthly Rates
|
Current 07/08
|
Proposed 08/09
|
|
Employee Only |
11.14 |
11.70 |
|
Employee + 1 |
21.16 |
22.22 |
|
Employee + Family |
28.30 |
28.72 |
Further, at the request of our employees, staff has worked with the City’s Humana/Comp Benefits representative to offer the Advantage Plus 2 Plan. The Advantage Plus 2 Plan is an open access DHMO with 30% more providers in network. In addition, employees that select the Advantage Plus 2 Plan will not have to be assigned to a specific provider.
By offering the Advantage Plus 2 Plan, employees would have an option to participate in the CS 250 or Advantage Plus 2 Plan depending on their individual needs. The CS 250 would continue to be the City’s primary plan. Any employee that selects the Advantage Plus 2 Plan will be responsible for the additional cost, thereby eliminating any additional fiscal impact to the City.
The rates for the Advantage Plus 2 Plan are indicated in the following table:
Dental Monthly Rates
|
Current 07/08
|
Proposed 08/09
|
|
Employee Only |
N/A |
21.90 |
|
Employee + 1 |
N/A |
42.72 |
|
Employee + Family |
N/A |
72.70 |
Rates for both dental plans are guaranteed for two (2) years.
Life Insurance
On September 30, 2008 the Group Life insurance policy with Reliance Standard Life Insurance expires. According to the City’s Broker for Group Life insurance, Dan Rachman, Reliance Standard Life Insurance will renew our Group Life insurance and Accidental Death and Dismemberment (AD&D) with no rate increase. The current rates of $0.30/$1000 for Life and $0.06/$1000 for Accidental Death and Dismemberment will apply during the next fiscal year...
The Group Life Policy currently provides basic life and accidental death and dismemberment coverage for each active, full-time employee after one month of employment with the City, according to the following classifications:
|
Class |
Employee Group |
Death Benefit |
|
Class 1 |
Department Heads and Commissioners |
$100,000 |
|
Class 2 |
Fire Employees |
$50,000 |
|
Class 3 |
General Employees |
$50,000 |
|
Class 4 |
Federation of Public Employees members |
$50,000 |
|
Class 5 |
Retirees |
$10,000 |
Retiree’s Life insurance automatically defaults to
$10,000. Retiree’s pay 100% of premium
for Life insurance. The City pays the
full cost of Group Life insurance and AD&D insurance for active employees
only.
Rates are guaranteed for two (2) years.
LTD Management
On September 30, 2008 the Long-term Disability (LTD) Policy for management personnel provided by Reliance Standard Life Insurance expires. According to the City’s Broker for management personnel Long-term Disability insurance, Dan Rachman, Reliance Standard Life Insurance will renew our policy with no rate increase.
This policy covers each active, full-time employee who is exempt from overtime and compensatory time in accordance with the Fair Labor Standards Act, except for temporary employees.
The following table illustrates the management Long-term Disability policy benefits:
|
Age at
Disablement |
Duration of Benefits |
|
Under 60 |
Up to age 65 |
|
From 60-69 |
5 years or up to age 70, whichever is less |
|
69 or older |
12 Months |
The City pays the full cost of this policy
at a rate of $0.76/$100 of covered payroll.
Rates are guaranteed for two (2)
years.
LTD Non-Management
On September 30, 2008 the Long-term Disability (LTD) Policy for non-management personnel, provided by Lincoln Financial Group, expires. Lincoln Financial has proposed to renew the City’s policy with no rate increase.
|
Age at
Disablement |
Duration of Benefits |
|
Under 60 |
Up to age 65 |
|
From 60- 69 |
5 years or up to age 70, whichever is less |
|
69 or older |
12 Months |
The City pays the full cost of this policy at a rate of $0.83/$100 of
covered payroll.
Rates are guaranteed for two (2)
years
RECOMMENDATION
The City Administration recommends Commission’s consideration and
approval of the attached Resolution authorizing the City Manager to renew the
City’s Group Insurance contracts for fiscal year 2008/2009 with:
RESOLUTION NO. ______________________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF NORTH LAUDERDALE,
FLORIDA, AUTHORIZING THE CITY MANAGER TO ENTER INTO RENEWAL CONTRACTS BY AND
BETWEEN THE CITY OF NORTH LAUDERDALE AND THE FLORIDA LEAGUE OF CITIES, COMP
BENEFITS, RELIANCE STANDARD AND LINCOLN FINANCIAL GROUP FOR EMPLOYEE GROUP
INSURANCE AS OUTLINED IN SECTION 1 OF THIS RESOLUTION FOR FISCAL YEAR
2008/2009; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF
Section 1: That the City Commission of the City of North Lauderdale, Florida, does hereby authorize and direct the City Manager, on behalf of the City, to execute agreements by and between the City of North Lauderdale and Florida League of Cities, Comp Benefits, Reliance Standard and Lincoln Financial Group as follows for fiscal year 2008/2009 effective October 1, 2008:
Comp Benefits for Group Dental Insurance
Reliance Standard Life for Group Life Insurance
Reliance Standard Life for Management Long-Term Disability
Section 2: That this Resolution shall take effect immediately upon adoption.
PASSED and
ADOPTED by the City Commission of the City of
____________ day of September, 2008.
APPROVED AS TO FORM:
__________________________________
CITY ATTORNEY SAMUEL S. GOREN
____________________________________
MAYOR JACK BRADY
ATTEST:
____________________________________
VICE MAYOR JOHN R. CANGEMI
_________________________________________