SUBJECT:
Title
Request Approval of Life Insurance Renewal with Standard Insurance Co. (Budget impact - Expenditure of $379,413 as approved in the FY 21/22 budget)
Body
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INITIATOR: |
DEPARTMENT: |
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Amanda Tart, Director |
Human Resources |
DESCRIPTION/BACKGROUND:
The FY 2022 proposed renewal from Standard represents a no rate increase to County provided basic coverage or to active employee supplemental coverage. There is a 39% rate increase to retiree basic and supplemental coverage. This is the first increase to retiree rates since 2009. All rates include a two (2) year rate guarantee.
The Basic and Accidental Death and Dismemberment coverage provided to active employees is one times salary, paid 100% by the County. Employee supplemental and dependent coverage is voluntary and paid 100% by employees. Retirees have the option to keep 100% of their Basic and Supplemental coverage at the time of retirement and pay 100% of the premium, based on an age step rate. Employees retiring prior to October 1, 2009 are able to keep $10,000 of basic coverage at the group composite rate with all other coverage based on an age step rate.
Currently, the policy allows retirees to carry a maximum life volume of $200,000 which is now what is driving the rate increase. The retiree claims vs premium loss ratio actually called for a 57% increase; however, Standard has agreed to a phased in approach. The life insurance is meant to be a standard death benefit with no cash value. With this rate increase it is anticipated that retirees will need to look at their coverage and potentially reduce their life volume which should assist in mitigating the loss ratio going forward. Retirees may reduce coverage in $5,000 increments at any time. The county insurance committee will be meeting to review the overall policy design to determine what policy design changes and maximums should be recommended for the future to ensure adequate coverage with reasonable and competitive rates.
BUDGET/IMPACT:
Expenditure of $379,413 as approved in the FY 21/22 budget. Total Group life insurance premium is estimated at $1,266,740 with anticipated contributions from employees and retirees of $887,327.
RECOMMENDED ACTION:
Recommended action
Motion to approve the Group Life Insurance renewal with Standard Insurance Company to be effective October 1, 2021.
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