HomeMy WebLinkAboutItem 06.n
Date: Item No.
RESOLUTION AUTHORIZING THE PURCHASE OF LIFE AND
LONG-TERM DISABILITY INSURANCE FROM OCHS, INC.
Proposed Action
Staff recommends adoption of the following motion: Move to approve Ochs, Inc. as the Group Life,
Voluntary Life and Long-Term Disability provider beginning January 1, 2019.
Overview
The City of Lakeville employee benefit program includes basic life insurance and long-term disability
insurance for eligible employees. Unum is the City’s current provider for life insurance and long-term
disability insurance through December 31, 2018. NFP conducted an RFP and received several
proposals. Ochs, Inc. quoted basic life insurance premiums for 2019 for a cost of $0.08 per $1,000 and
$0.03 per $1,000 for AD&D. Rates are guaranteed through 12/31/2021. Minnesota Life Insurance
Company is the underwriting company for group life and voluntary life insurance.
Ochs, Inc. also quoted long-term disability insurance for a cost of $0.220 rate per $100 C. M. E. This
resulted in a percentage change of -4.3%. Madison National Life Insurance Company is the
underwriting company for long-term disability. Rates are guaranteed through 12/31/2021.
Staff recommends Council adopt the resolution authorizing the purchase of life insurance and long-
term disability insurance through Ochs, Inc. beginning January 1, 2019.
Primary Issues to Consider
• What are the life and long-term disability plan designs and rates?
Supporting Information
• 2019 Life and Long-Term Disability Insurance Information
• Resolution authorizing the purchase of life and long-term disability insurance beginning
January 1, 2019.
Financial Impact: $ Budgeted: Y☒ N☐ Source:
Related Documents: (CIP, ERP, etc.):
Envision Lakeville Community Values: Good Value for Public Services
Report Completed by: Tammy Schutta, Human Resources Manager
October 15, 2018
General Fund
2019 Life and Long-Term Disability Insurance Information
Eligibility: Eligibility: to be eligible for coverage, you must be a full-time employee at
active work and working a minimum of 30 hours per week.
What are the 2019 Life Insurance plan design and rates?
Basic Term Life and AD&D Rates and Plan Design
Class Life Amount AD&D
Amount
All Eligible Employees $25,000 $25,000
Spouse $1,000 N/A
Spouse
Children $1,000 N/A
Minnesota Life
Age Reductions:
At Age 65: Reduces to 67%
At Age 70: Reduces to 45%
At Age 75: N/A
Waiver of Premium: Prior to 60, waiting period 9 months,
ends at age 65
COST SCHEDULE
Life (rate per $1000) $0.080
AD&D (rate per $1000) $0.030
Total $0.110
Dependent Rate $0.220
Monthly Premium $600.79
Annual Premium $7,209.51
Rate Guarantee Through 12/31/2021
Estimated Volume $5,141,750
Estimated Dependent
Volume $161,000
Voluntary Term Life Plan Design
Minnesota Life
Employee Guarantee Issue
Limit $200,000 for new employees if elected within 31 days of initial eligibility
Employee Maximum Benefit $10,000 increments to a maximum of the lesser of 5x annual earnings or
$500,000
Employee Minimum $10,000
Spouse Guarantee Issue Limit $25,000
Spouse Maximum Benefit Increments of $5,000 to a maximum of $150,000
Child(ren) Benefit Available in amounts: $2,000, $4,000, $6,000, $10,000, $15,000
Age Reduction Schedule None
AD&D Benefit Equal to Life Benefit
Participation Requirement None
What are the 2019 long-term disability insurance plan design and rates?
Eligibility: A regular employee of the employer or an associated company working 30
hours per week, at active work. Temporary or seasonal workers are not eligible.
Class 1 All union members
Class 2 City Manager, City Clerk, or
Department Head
Class 3 All non-union members
Madison National Life
Elimination Period
Class 1 90 days
Class 2 60 days
Class 3 60 days
Benefit Percentage 60%
Monthly Maximum Benefit $6,000
Benefit Duration SSNRA
Definition of Disability OR
Own Occupation Limitation
Class 1 36 months
Class 2 60 months
Class 3 36 months
Mental Illness Limitation 24 months lifetime
Drug/Alcohol Limitation 24 months lifetime
Special Condition Limitation No Limitations
Pre-existing Limitation 3/12
Survivor Benefit 3 months
Conversion Benefit Available
COST SCHEDULE Madison National Life
Rate per $100 C.M.E. 0.220
Monthly Premium $2,854.65
Annual Premium $34,255.85
Rate Guarantee Through 12/31/2021
Employer Contribution 100%
Participation Requirement 100%
Estimated Volume $1,297,570
CITY OF LAKEVILLE
RESOLUTION NO. ____
RESOLUTION AUTHORIZING THE PURCHASE OF LIFE
AND LONG-TERM DISABILITY INSURANCE
WHEREAS, the City Council has authorized the purchase of $25,000 life insurance benefits for
eligible employees and $1,000 life insurance benefits for dependents per Personnel Policy 6.61;
and
WHEREAS, the City Council has authorized the purchase of long-term disability insurance for
eligible employees per Personnel Policy 6.61.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Lakeville approves as
follows:
1. That the proposal from Ochs, Inc. for life insurance and long-term disability insurance is
acceptable. Minnesota Life Insurance Company is the underwriting company for life
insurance and Madison Nation Life Insurance Company is the underwriting company for
long-term disability.
2. That the agreement to provide life insurance is acceptable with Minnesota Life Insurance
Company and the agreement to provide long term disability insurance is acceptable with
Madison National Life Insurance Company. Rates are guaranteed for life insurance and
long-term disability through 12/31/2021.
3. That the City Administrator is hereby authorized and directed to sign the necessary
agreements and implement the coverage for life insurance and long-term disability
insurance.
ADOPTED by the Lakeville City Council this 15th day of October, 2018.
______________________________
Douglas P. Anderson, Mayor
_________________________________
Charlene Friedges, City Clerk