AGENDA MEMORANDUM

 

 

MEETING DATE:               August 28, 2006                     

 

FROM:                                   J. Cunningham Perry, Human Resources Director

 

SUBJECT:                              Resolution approving an Agreement with       Jefferson Pilot Financial Insurance Company Agreement

 

 

 

Staff Recommendation:

Staff recommends approving an agreement with Jefferson Pilot Financial Insurance Company to provide basic and voluntary life insurance to the employees of the City of Leesburg.

 

Analysis:

Standard Insurance Company has provided basic and voluntary life insurance to the City of Leesburg and its employees since October 1, 2001. 10/1/01.   During that time frame, the premium rates for basic life and AD &D insurance has increased from $.38 per $1,000 of coverage to the initial proposed renewal rate of $.41 per $1,000 of coverage for the upcoming FY 06/07. 

 

Also during that time frame, the City has allowed its retirees the opportunity to maintain up to $15,000 of life insurance benefit at their own cost but at the City’s group rate.  Even though retirees paid for their own coverage, this practice of paying a blended rate for active employees and retirees drove the cost of providing basic life insurance for our active employees up considerably.

 

At the City’s request, L. B. Bryan and Company, remarketed the City’s life insurance program and further requested separate rates for active employees and for retirees.  Jefferson Pilot Financial Insurance Company, an A+ (A.M. Best) rated insurance company, offered the lowest and best proposal at $.30 per $1,000 of life insurance for active employees, and $.057 per $1,000 of coverage for retirees.  This proposal translates into a 30% reduction in cost to the City for providing basic life and AD&D insurance to their active employees or a savings of $37,000 per year, and only an increase of $0.16 per $1,000 of life insurance coverage for retirees.  In addition for retirees, this proposal also includes a “no age reduction clause” that prevents their amount of life insurance coverage to be automatically reduced each year as they get older. This proposal also guarantees these rates for three (3) years.

 

Other advantages of the Jefferson Pilot Financial Insurance Company proposal include no increase in premiums for employees that purchase additional voluntary coverage, and an increase in the guaranteed issue amount from $85,000 to $100,000. Guaranteed issue amount is the amount of voluntary insurance that a newly eligible employee can purchased without having to answer medical questions or take a medical exam. 

 

 

 

Options:        

1.      Approve the plan with Jefferson Pilot Financial Insurance Company  plan.

2.      Deny plan.

3.      Such other action as the Commission may deem appropriateProvide some other option.

 

Fiscal Impact:

Approval of this agreement will result in a $37,000 per year decrease in the City’s cost of providing basic life insurance to our employees

 

 

Submission Date and Time:    8/23/06 7:05 PM8/23/06 11:59 AM8/22/06 3:51 PM8/21/06 4:14 PM8/18/06 3:35 PM8/18/06 12:56 PM8/17/06 12:38 PM____

 

Department: Human Resources_________

Prepared by:  Dann Herrin_____________                     

Attachments:  Yes____   No __X____

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Newspapers:

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_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. __wp________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager _________RS__________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________

 

 

 

 

Carol to add Mayor and City Clerk to contract for signatures

 

 

RESOLUTION NO._______________

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH JEFFERSON PILOT FINANCIAL INSURANCE COMPANY TO PROVDE BASIC AND VOLUNTARY LIFE AND AD&D INSURANCE TO THE CITY OF LEESBURG AND ITS EMPLOYEES; AND PROVIDING AN EFFECTIVE DATE.

 

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

            THAT the Mayor and City Clerk are hereby authorized to execute an agreement with Jefferson Pilot Financial Insurance Company whose address is 8801 Indian Hills Drive, Omaha, Nebraska  68114-4066, to provide basic and supplemental life and AD&D insurance to the City of Leesburg and its employees.

 

             THAT this resolution shall become effective October 1, 2006.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the __28th___ day of _August________ 2006.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk