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Item 07 City of Springfield Hartford Group Insurance Agreement
AGENDA ITEM SUMMARY Meeting Date: 9/19/2016 Meeting Type: Regular Meeting Staff Contact/Dept.: Laura Turner Staff Phone No: 541-726-4661 Estimated Time: Consent Calendar S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially Responsible and Innovative Government Services ITEM TITLE: CITY OF SPRINGFIELD HARTFORD GROUP INSURANCE AGREEMENT ACTION REQUESTED: Authorize City Manager to enter into an agreement with Hartford Insurance Company in the amount not to exceed $135,000 annually for group insurance services. Services include employee Group Basic Life, Accidental Death & Dismemberment and Long Term Disability insurance. ISSUE STATEMENT: Human Resources is requesting authorization to change insurance carriers from Standard Insurance Company to Hartford Insurance Company effective October 1, 2016 which will lower the total annual cost of employee insurance services by 45.5%, and to add enhanced customer services plus expand existing services with new value-added programs at no additional cost to the City. ATTACHMENTS: 1. Hartford Insurance Company Proof of Insurance Effective October 1, 2016 2. Insurance Quote Summary DISCUSSION/ FINANCIAL IMPACT: Standard Insurance Company is our provider for employee Group Basic Life, Accidental Death and Dismemberment (AD&D), Long Term Disability (LTD) and Voluntary employee paid insurance programs including Short Term Disability (STD), Supplemental Life, Dependent Life and AD&D. Our broker received bids from Hartford, Cigna & Standard insurance. Hartford Insurance’s bid came in at the lowest price and with the best services out of the three companies. Hartford has offered to provide all current lines of insurance coverage at the same service levels as currently provided for an annual cost of $134,409. If we move services to Hartford, the cost savings will be $112,224 annually, translating to a 45.5% decrease from Standard current cost of $246,743. Hartford offers a rate guarantee for three years. Cost Comparison Summary Insurance Service: Standard: Hartford: Potential Savings: Life/AD&D 75,746 33,199 42,547 Long Term Disability 170,997 101,201 69,787 Total Cost $246,743 $134,409 $112,334 Additionally, Hartford will provide enhanced customer service for the employee paid Short Term Disability program to include telephonic claim submission and on-line access to claim information streamlining the claims process for both employees and staff. Hartford will also provide new value added programs to include Travel Assistance and ID Theft Protection Service, Estate Guidance, Beneficiary Assist and the Stay At Work program designed to help with workplace equipment accommodations. All of the above is at no additional cost to the city. Staff recommends that Council authorize the City Manager to enter into an agreement with Hartford Insurance Company in the amount not to exceed $135,000 annually to provide employee group insurance service for the City. AIS ATTACHMENT 1, Page 1 of 16 AIS ATTACHMENT 1, Page 2 of 16 AIS ATTACHMENT 1, Page 3 of 16 AIS ATTACHMENT 1, Page 4 of 16 AIS ATTACHMENT 1, Page 5 of 16 AIS ATTACHMENT 1, Page 6 of 16 AIS ATTACHMENT 1, Page 7 of 16 AIS ATTACHMENT 1, Page 8 of 16 AIS ATTACHMENT 1, Page 9 of 16 AIS ATTACHMENT 1, Page 10 of 16 AIS ATTACHMENT 1, Page 11 of 16 AIS ATTACHMENT 1, Page 12 of 16 AIS ATTACHMENT 1, Page 13 of 16 AIS ATTACHMENT 1, Page 14 of 16 AIS ATTACHMENT 1, Page 15 of 16 AIS ATTACHMENT 1, Page 16 of 16 © USI Insurance Services, City of Springfield (Life & DI Renewal Analysis) UPDATED 5.23.16 - Cost Summary, 5/23/2016 City of Springfield Life/AD&D & Disability Cost Summary July 1, 2016 Effective Date Carriers Current Revised Option 1 Option 2 Life/AD&D Standard Standard Hartford Cigna Pre-Retirement Life Standard Standard Hartford Cigna Long Term Disability Standard Standard Hartford Cigna Cost Summary Current Revised Option 1 Option 2 Life/AD&D 66,553 28,558 28,558 37,135 Pre-Retirement Life 9,193 9,193 4,641 10,237 Long Term Disability 170,997 125,518 101,210 103,057 Total Cost Summary 246,743 163,270 134,409 150,429 $ Change from Current (83,473) (112,334) (96,314) % Change from Current -33.8%-45.5%-39.0% Note 1.Voluntary life/AD&D and voluntary STD plan cost is not illustrated.