AGENDA CAPTION:
Title
Consider approval of Resolution 2024-242R, approving a contract extension with Minnesota Life Insurance Company, and Madison National Life Insurance Company, through OCHS, Inc., for Basic Term Life, Voluntary Life, AD&D, and Long-Term Disability Insurance Administration, for an estimated annual amount of $176,000.00; authorizing the City Manager, or her designee, to execute the appropriate documents to implement the extension on behalf of the city; and declaring an effective date.
Body
Meeting date: December 3, 2024
Department: Human Resources Department - Linda Spacek, Director
Amount & Source of Funding
Funds Required: $176,000 estimated annual amount
Account Number: Multiple Sources
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Fiscal Note:
Prior Council Action: Res 2018-121R, approval of original contract
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Background Information:
The City approved a contract for Basic Term Life and AD&D, Voluntary Life and AD&D, and Long-Term Disability Administration following a competitive sealed proposal process. The contract is with OCHS, Inc., located in St. Paul, Minnesota, A Securian Company, underwritten by Minnesota Life Insurance Company, and Madison National Life Insurance Company and includes the City’s Long-Term Disability Insurance for employees.
Starting January 2023, as approved through the Budget Process, the City’s Basic Term Life and AD&D insurance coverage was modified from $25,000 per employee to one times (1x) the employee’s annual salary. This is evidenced in the Basic Life rate change from $0.035 per $1,000 coverage to $0.05 per $1,000 coverage. Additionally, since the onset of the contract, the number of insured lives has increased from 631 to 835 lives. The Basic Term Life and AD&D is the only coverage being modified at this time and typically runs about $50,000 annually.
Combining the increased amounts per employee for Basic Term Life and AD&D with the unchanged amounts per employee for the Long-Term Disability, the estimated annual contract amount is $176,000.
As a result, the City is requesting Council’s approval to increase the total contract amount to accommodate the growing number of lives insured as the number of City staff increases as well as extend the existing contract for another three (3) years.
The City anticipates issuing a new Request for Proposal solicitation within the next two (2) years.
Council Committee, Board/Commission Action:
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Recommendation:
Staff recommends approval of the contract extension