HomeMy WebLinkAbout125-99 RESOLUTIONRESOLUTION NO 125-99
A RESOLUTION AUTHORIZING THE MAYOR AND CITY
CLERK TO ENTER INTO CONTRACTS WITH USABLE LIFE,
INC., TO PROVIDE LIFE, AD&D, AND LTD COVERAGE; AND
TO PROVIDE THIRD PARTY ADMINISTRATION FOR AN
I.R.S. SECTION 125 FLEXIBLE SPENDING ACCOUNT.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS.
Section 1. That the City Council hereby authorizes the Mayor and City Clerk to enter
into contracts with USAb1e Life, Inc., to provide Life, AD&D, and LTD coverage; and to provide
third party administration for an I.R.S. Section 125 flexible spending account.
PASSED AND APPROVED this day of October , 1999.
APPROVED.
By. //d
Fred Hanna, Mayor
ATTEST:
By ).54 sem,_ 2141,
=-••_ ;; . Heather Wo' druff, City Jerk
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USAble Life
P. 0. Box 1650
Little Rock, AR 72203
GROUP INSURANCE APPLICATION
TYPE OR PRINT IN BLACK INK
1. Legal Name of Policyholder
CITY OF FAYETTEVILLE R-2467
Taxpayer ID#
STD
2. Mailing
113
Address of Policyholder
WEST MOUNTAIN
FAYETTEVILLE
City
State
ARKANSAS
Zip+4
72701
3. Street
$150,000
Address of Policyholder (if different from above)
City
State
Zip+4
0 other (give details):
4. Name of CEO, President or Owner of Company
Name
of Insurance
DON
Contact at Company
M. BAILEY
Telephone Number of Policyholder
501-521-7700
5. Name of Subsidiary or Affiliate Companies to be Covered
N/A
Fax Number of Policyholder
501-575-8257
6. Nature of Business
CITY/MUNICIPALITY
Effective as of
Qb— Mo.
12:01 a.m.
01
Day2000Yr.
Number of
Eligible Employees
528
Number Enrolled
for Coverage
528
7. Waiting
a. Present
b. Future
Period
Employees 30 DAYS
Employer Contribution
Life and AD&D
STD
100
% Dep.
%
Life
% Hosp. Indemnity
%
Employees 30 DAYS
Other
8. Eligible Employees
SEE ATTACHED ADDENDUM NO. 1
Retired Employees Insured
Present 0 Yes 0 No
Future 0 Yes 0 No
9. Employee Classes
SCHEDULE OF INSURANCE
Description
Life and AD&D
STD
Other*
SEE ATTACHED ADDENDUM NO.
1
• Indicate other benefits sold.
10. Guaranteed Issue
Changes in benefit amounts in accordance with the Schedule shown above will become effective on:
0 the first day of the policy month following the date of change; or
$150,000
$a the policy anniversary date coincident with or next following the date of change; or
(Life and AD&D amounts over Guaranteed Issue
are subject to evidence of insurability.)
0 other (give details):
11. Reductions & Termination (Benefit reduction due to age will be effective on the insured's birthday.)
O Employee Life and AD&D benefits reduce 33 1/3% of the pre -age 65 amount at ages 65 & 70. Terminate at retirement.
❑ Dependent Life benefits reduce 50% at the spouse's age 65. Terminate at the employee's retirement.
O STD benefits reduce 33 1/3% of the pre -age 65 amount at ages 65 & 70. Terminate at retirement.
$S Other: SEE ATTACHED ADDENDUM NO. 1
GPOL-APP (2-98)
(over)
Page 2 of Application
12. Extended Life Insurance Benefits
R$ Yes ❑ No
If Yes, indicate type of coverage desired: X8 Standard Coverage
0 One-year Extension
13. Dependent Life Insurance
❑ Yes %% No
If Yes, indicate correct plan:
Spouse
Each child over days to months
Each child
months to
years (students to age
0 Plan I
$2,000
100
1,000
0 Plan II 0 Other
$5,000
200
2,000
14. Short Term Disability Accident Benefits
(non -occupational)
0 Yes fl No Begin Day
Sickness Benefits
Begin Day
Maximum Period
Weeks
Benefits Begin on
First Day Hospitalized
0 Yes 0 No
❑ Yes fl No
UNITS Available: 0 1 unit only or 0 1 or 2 units as elected by employee
Dependent Coverage Available: 0 Yes 0 No Employer Contribution:
16. Voluntary Group Life
❑ Yes %% No
0 STANDARD, or 0 SELECT Guaranteed Issue: 0 No 0 Yes $
# Enrolled
If Yes, required employee participation
17. Supplement Hospital Benefit
.❑ Yes l8 No
Optional Cancer Benefit? 0 Yes 0 No
# Enrolled Employer Contribution:
18. Voluntary Accidental Death & Dismemberment
fl Yes 0 No # Enrolled
Employer Contribution:
REMARKS OR SPECIAL PROVISIONS ORIGINAL LIFE AND AWED POLICY WAS EFFECTIVE APRIL 15, 1988. ORIGINAL
VOL. AD&D POLICY WAS EFFECTIVE JUNE 1, 1991 — THIS APPLICATION
REFLECTS CHANGES EFFECTIVE 1-1-2000. THEREFORE POLICIES #2467-000 S
2467-001 ARE BEING REISSUED UNDER R-2467.
It Is understood and agreed that this application shall be made a part of the policy or policies applied
for and that no insurance shall be effective until approved by the Company at its Home Office.
COMPLIANCE NOTICE: USAble Life does not provide legal or tax advice. Based upon information you have provided us about your group, we will notify
you if we perceive any obvious deficiency in your plan, but you must consult your own legal counsel for definitive advice and opinions regarding your plan's
compliance.
INSURANCE FRAUD WARNING - Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false
information in an application for insurance may be guilty of a crime and subject to fines and confinement in prison.
FAYETTEVILLE ARKANSAS
Dated at (City, St
Signature of Marketing
OCTOBER 11, 1999
Date
Signature of Policyholder and Title
MAYOR
'L._ '
epresentativeid"
Signature o arketing anager Signature of Broker, if applicable
Addendum No. 001 to be attached to and made part of Application, GPOL-APP (2-98)
Application By: City of Fayetteville
GROUP LIFE INSURANCE
The following questions of the application are addended as follows:
Questions #8, #9 and #11.
Effective: January 1, 2000
The `Basic Life and AD&D Benefits for eligible employees shall be determined by the following schedule:
CLASSIFICATION
;LIFE AND AD&D
= ,"
Class
working
Class
time
works
regular
1: All
at
2: Any
who is
an average
basis.
least
a
full-time employees
40 hours per
Employee previously
designated staged
of 20 Hours
customarily
week.
employed
retiree and
per week on
full-
who
a
1 1 Times Annual Salary,
1 ,h Times Annual Salary
Working Full -Time, Maximum
*Insurance amount will
higher thousand.
Maximum
Last Earned
$150,000
be rounded to the
$150,000*
When
next
The Reductions, Terminations and Special Provisions as shown on page 2 are deleted and the following sha 1 apply:
REDUCTIONS, TERMINATIONS AND SPECIAL PROVISIONS
Class 1: Employee Life and Accidental Death & Dismemberment: Benefits reduce 33 1/3 % of the pre -
age 67 amount at ages 67and 70 and terminates at retirement.
Class 2: Employee Life and Accidental Death & Dismemberment: Benefits reduce 33 1/3 % of the pre -
age 67 amount at ages 67and 70 and terminates the earlier of age 75 or retirement.
Group Life to include Accelerated Benefit Rider.
Group AD&D to include Accidental Death Seat Belt Rider.
Signature and Title
OCTOBER 11, 1999
Date
USAble Life
P 0 Box 1650
Little Rock, AR 72203-1650
APPLICATION FOR GROUP LONG TERM
DISABILITY INSURANCE
1. LEGAL NAME OF POLICYHOLDER
CITY OF FAYETTEVILLE
R-2467-100
2. MAILING ADDRESS OF POLICYHOLDER
113 WEST MOUNTAIN FAYETTEVILLE, AR 72701
3. STREET ADDRESS OF POLICYHOLDER (if different from above)
4. NAME OF SUBSIDIARIES, DIVISIONS OR AFFILIATES TO BE COVERED
N/A
5. NATURE OF BUSINESS
CITY/MUNICIPALITY
6. EFFECTIVE DATE 12:01 A.M.
MONTH jAwARy
7. ELIGIBLE CLASSES
Describe Below
DAY 01
YEAR 2000
WILL EMPLOYEES CONTRIBUTE 0 YES
TOWARDS COSTS? X® NO
(The insurer reserves the right to review and terminate all classes insured under this policy if any class ceases to be covered.)
CLASS ALL FULL—TIME EMPLOYEES
CLASS
WORKING A MINIMUM OF 40 REGULARLY SCHEDULED HOURS PER WEEK.
8. ELIGIBILITY WAITING PERIOD (Should an employee enter another eligible class, he will not be eligible for any additional benefits until he has
completed a 30 -day waiting period, and has been actively at work one full day in the new class.)
A. PRESENT EMPLOYEES (None, unless specified)
B. NEW EMPLOYEES 90 DAYS
9. NUMBER OF EMPLOYEES
A. ELIGIBLE 528
528
B. ENROLLED
MAXIMUM COVERED
PAYROLL PER EMPLOYEE: $ 10,000 PER MONTH
10. AMOUNT OF INSURANCE
60 % (Benefit Percentage) OF BASIC MONTHLY EARNINGSNOTTO EXCEED A MAXIMUM MONTHLY BENEFIT OF
$ 6,000
OR
% OF THE FIRST $ OF BASIC MONTHLY EARNINGS PLUS % OF THE NEXT
$ OF BASIC MONTHLY EARNINGS NOT TO EXCEED A MAXIMUM MONTHLY BENEFIT OF
LESS OTHER INCOME BENEFITS STATED IN THE POLICY INCLUDING
❑ PRIMARY SOCIAL SECURITY fl PRIMARY AND FAMILY SOCIAL SECURITY 0 PRIMARY AND FAMILY SOCIAL
0 BACKDOOR INTEGRATION SECURITY WITH 70% ALL SOURCES
THE MINIMUM MONTHLY BENEFIT IS $ 50.00
11. ELIMINATION
PERIOD 180 DAYS
12. PRE-EXISTING CONDITIONS EXCLUSION
❑ 12/6/24 XX3/6/12 ❑ 12/12 ❑ 5 DAY 0 OTHER
GLTD-MAPP (2-98)
13. MAXIMUM BENEFIT PERIOD
XCREDUCING BENEFIT DURATION
BENEFIT DURATION
TO AGE 65
60 MONTHS
48 MONTHS
42 MONTHS
36 MONTHS
30 MONTHS
24 MONTHS
21 MONTHS
18 MONTHS
15 MONTHS
12 MONTHS
AGE AT DISABILITY
LESS THAN 60
60
61
62
63
64
65
66
67
68
69 (AND OVER)
O 65/5/70
AGE AT DISABILITY
LESS THAN 60
60-64
65-69
(70 AND OVER)
❑ TO AGE 70
AGE AT DISABILITY
LESS THAN 69 •
69 AND OLDER
BENEFIT DURATION
TO AGE 65
5 YEARS
TO AGE 70 BUT
NOT LESS THAN
1 YEAR
1 YEAR
BENEFIT DURATION
TO AGE 70
1 YEAR
OTHER
O 5 YEARS OR AGE 70
WHICHEVER FIRST OCCURS
O 10 YEARS OR AGE 70
WHICHEVER FIRST OCCURS
❑ TO•AGE65
❑ 5 YEARS OR AGE 65
WHICHEVER FIRST OCCURS
O 10 YEARS OR AGE 65
WHICHEVER FIRST OCCURS
❑ OTHER
NONE OF THE ABOVE OPTIONS
EXTEND THE MAXIMUM BENE-
FIT PERIOD BEYOND THE AGE
SELECTED EXCEPT FOR A MINI-
MUM ONE-YEAR BENEFIT.
14. POLICY FEATURES
Ig NO
NO
A. O YES
B. O YES
C. 0 YES XX NO
D. O YES fl NO
E. O YES id NO
F. %I YES ONO
G. r YES ONO
H. O YES %% NO
L ki YES NO
J. %I YES ONO
K. COLA
❑ YES XX NO
O YES %l NO
L. O YES XX NO
M. O YES .fl NO
N. %1 YES ONO
PARTIAL DISABILITY
EDGE
EDGE 1 % INDEXATION
EXTENSIVE OWN OCCUPATION BENEFIT
60 MONTH OWN OCCUPATION BENEFIT •
36 MONTH OWN OCCUPATION BENEFIT
THREE MONTH SURVIVOR BENEFIT
YEAR FAMILY INCOME BENEFIT
MENTAL ILLNESS LIMITATION
PROGRESSIVE PARTIAL DISABILITY
ADJUSTMENTS -OPTION I
END OF MAXIMUM BENEFIT PERIOD -OPTION II
ADDITIONAL PENSION CONTRIBUTION
401K CONTRIBUTION BENEFIT
2 YEAR RATE GUARANTEE
0. ❑'YES f NO ADDITIONAL FEATURES.
REMARKS ORIGINAL LONG TERM DISABILITY POLICY EFFECTIVE DATE MAY 1, 1990.- THIS APPLICATIO
REFLECTS CHANGES EFFECTIVE 1-1-2000. THEREFORE POLICY 2467-100 IS BEING REISSUED
UNDER R-2467-100
15. IS THIS A REPLACEMENT
OF SIMILAR COVERAGE
❑ YES
%% NO
PRIOR INSURANCE 0 YES
CREDIT INCLUDED %%NO
(If yes. a copy of prior carrier's plan is required for PIC administration)
16. PREVIOUS COMPANY
TERMINATION DATE
OF PRIOR PLAN
17. PREMIUM MONTHLY
(unless otherwise specified)
DEPOSIT OF $ TO APPLY ON THE FIRST PREMIUM
It is understood and agreed that this application shall be made Section I, part of the Policy applied for and that no insurance shall be effective until approved
by the Insurance Company at its Home Office.
Insurance Fraud Warning — Any person who knowing y presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false
information in an application for insurance may be guil y of a crime and subject to fines and confinement in prison.
MARKETING REPRESENTATIVE
BY: SIG URE LE
MAYOR
FAYETTEVILLE, ARKANSAS
TELEPHONE NUMBER
(501) 575-8314
DATE
OCTOBER 11, 1999
GLTD-MAPP (2-98)
Agreement for Administrative Services
This agreement specifies the services to be provided to City of
Fayetteville hereinafter referred to as "Company" in the ongoing
administration of the Company's Section 125 Cafeteria Plan, and the
specified responsibilities of the Company.
Administrator
City of Fayetteville shall be the Plan Administrator and USAble Life,
hereinafter referred to as the "Third Party Administrator", shall be
engaged as a subcontractor in the performance of administrative services
for the plan.
Administrative services to be provided by USAble Life:
1. Design a Cafeteria Plan Document, Dependent Care Assistance Plan
and Medical Reimbursement Plan to be reviewed by the Company
and Company's legal counsel.
2. Design a Prototype Summary Plan Description. City of Fayetteville
is responsible for printing the plan description and distributing it
to employees.
3. Conduct informational seminars to explain the Cafeteria Plan to
the employees if flexible spending accounts are involved
4. Provide participant election forms to be used during the enrollment
process.
5. Process initial enrollment forms and revocation forms to initiate
the administration function.
6. Provide an employee list to payroll once all elections have been
received and keyed into administration software for verification of
elections and amounts.
7. Provide claim for reimbursement forms to be used to claim flexible
spending account elections.
8. Provide reimbursement checks to employees on a bi weekly basis.
9. Provide a check register for all checks printed (or to be printed) on
a bi-weekly basis.
10. Provide each participant a Statement of Account on a quarterly
basis for the first, second and third quarters, and monthly for the
fourth quarter.
11. Provide discrimination reports on a semi-annual basis.
12. Provide forms to the Company for use by the Company in
communicating participant termination's and changes of family
status.
13. Provide quarterly Company statements of participation by plan by
participant.
14. Provide annual preparation of Form 5500 for City of Fayetteville to
review, sign and mail to the IRS.
15. Provide participant election forms at the end of each year for use in
making elections for the following year.
16. Provide guidance to the Company as to the operation of the Plan
and to maintaining the tax qualification of the Plan as set by the
Internal Revenue Code of 1986, as amended from time to time,
and successor tax laws.
17. Maintain all Cafeteria Plan documents and files for six months
following the end of each plan year, which after that time will be
returned to the Company .
Communication services to be provided by USAble Life:
1. Present informational seminar to the employee group.
2. Survey the group and analyze for individual savings.
3. Meet with each employee to discuss their individual savings and
personal needs.
Responsibilities of the City of Fayetteville:
1. Report participant termination's and changes of family status to
Administrative Firm to be effective 2 weeks after receipt.
2. Reconciliation of payroll amount redirected to the Cafeteria Plan
based on reports provided each month by USAble Life.
3. Distribution of participant statements of account to Company
employees.
4. Initiate any action required in the event plan(s) become
discriminatory.
5. Secure legal review of the Cafeteria Plan Document and Summary
Plan Description from Company's legal counsel.
6. Review, sign and mail the annual Form 5500 to the IRS.
7. Maintain all Cafeteria Plan documents following the end of each
plan year in the event the Plan is audited
Fees and Terms of Payment
The Schedule of Services/Fees is to be attached and made a part of this
Agreement. USAble Life has the right to change the Schedule of
Services/Fees by giving at least 60 days notice to the Company.
Reports and Data
All reports and data remain the property of the Company. USAble Life
will provide the Company all data, upon request, used by USAble Life in
its administration procedures.
City of Fayetteville
Section 125 Cafeteria Plan
Schedule of Fees
The fees for City of Fayetteville have been waived. This waiver will remain
with the continual enrollment of USAble Life products. If product
solicitation is terminated, then USAble Life will re-evaluate the fee
structure at that time.
One time set-up fee:
Monthly fee for Premium Only Participant:
Monthly fee for Flexible Spending Participant:
Minimum Monthly Charge:
$ 0.00
$ 0.00
$ 0.00
$ 0.00
Terms of this Agreement
This Agreement will be effective from the date both parties execute this
agreement until it is terminated. Either party may terminate this
Agreement with 30 days written notice.
By_
By
af
Julie
rshall, Senior Vice President
Date: OCTOBER 11,. 1222
Date:
STAFF REVIEW FORM
XX Agenda Request
Contract Review
Grant Review
FOR THE FAYE 1 EVILLE CITY COUNCIL MEETING OF
October 5, 1999
FROM:
Don Bailey
Name
Personnel Admin. Services
Division Department
ACTION REQUESTED: Purchase employee group policies from U S ABLE LIFE to provide Life,
AD&D, and LTD coverage plus contract to provide third party administration for an IRS
Sec. 125 Flexible Spending Account The contracts effective dates are 1-1-2000 for a
one year term with four one year options for renewal by agreement of both parties.
COST TO THE CITY:
$155,117 Est. Year 2000
Cost of this request
Various
Account Number
Project Number
$203,277 Est. Year 2000 Life/AD&D, LTD Ins.
Category/Project Budget Category/Project Name.
0 City Wide
Funds used to date
Program Name
$203,277 City Wide
Remaining Balance Fund
BUDGET REVIEW:
Budgeted Item
BddgCdordinator
get Adjustment Attached
Administrative Services Director
CONTRACT/GRANT/LEASE REVIEW:
GRANTING AGENCY:
9-a/-99 t //�o�e�mdD t -Xu.Qdo 1-ZR-tt
Date brie mal Auditor Date
Purchasing Officer
9-a\-99
Date
ADA Coordinator
Date
STAFF RECOMMENDATION:
Approve request.
Division Head
D partment Di�ctor
A minis r -five Services Director
f�-
Mayo
Date
Date
zha
Date
Date
Cross Reference
New Item: Yes No
Prev Ord/Res #.
Orig. Contract Date
REVIEW POPE
Description
Conents:
Budget Coordinator
Acccuntfng Manager
City Attorney
Purchasing Officer
AOA Coordinator
Internal Auditor
Reference Conents:
Meeting Date
Page 2
a.
FAYETTEVILLE
THE CITY Of FAYETTEVILLE, ARKANSAS
DEPARTMENTAL CORRESPONDENCE
TO: Mayor Fred Hanna and The City Council
THRU: Kevin Crosson, Administrative Services Director
FROM: Don Bailey, Personnel Director
DATE: September 13, 1999
SUBJECT:
Employee Group life, AD&D, LTD Voluntary AD&D and Cancer Coverage
Policy Renewal
The expiration date for each of the above listed employee group insurance policies is -12-31-99.
Periodically the City elects to re -bid its coverages to take advantage of either more favorable
pricing or to improve its employee benefits. An RFP requesting bids on the above coverages
plus the addition of an IRC Section 125 Flexible Spending Account Proposal (Cafeteria plan)
was sent to selected insurance companies and advertised on July 18, 1999. The RFP permitted
bids to be submitted on the insurance plans, or the Flexible Spending Account Plan or both. Our
group insurance RFP specified a one year contract with four one year options to renewal. Five
proposals were received and evaluated by the Selection Committee on September 2, 1999.
US Able Life was the clear choice of the Committee by having met the RFP requirements for
coverage to be provided and offering the best rates with a two year rate guarantee. A comparison
of our 1999 rates and the year 2000 rates follows:
1999 2444
LIFE (per $1,000 coverage) .31 .21
AD&D (per $1,000 coverage) .07 .05
LTD (per $100 of covered payroll) .46 .46
Vol. AD&D* (per $25,000 coverage) 3.75 1.50 employee only
" 994.00 2.00 family
Cancer* Various No change
Cafeteria Plan -0- No cost
* Employer pays for $25,000 of Voluntary AD&D coverage on each employee. The employee
pays 100% of premium for coverage above $25,000 or for family coverage. The employee pays
100% of premium for Cancer coverage he or she may elect.
Based on August 1999 enrollments a conservative estimate of annualized premium reduction for
the year 2000 as compared to 1999 is $35,000.
Note also that reduction in Voluntary AD&D rates apply to any amount the employee has elected
over the $25,000 employee coverage paid by the City This provides a significant savings in
premium cost to the employee.
Enhancements have also been incorporated in the Life policy. Coverage provisions will now
permit full payment of the coverage amount to age 67. Previously, a reduction occurred at age
65. A Group Life Accelerated Benefits Rider has been added to make an advance payment of
50% of the eligible benefit in the event of a terminal illness Also, an Accidental Death Seat Belt
Benefit Rider has been included into the AD&D Policy. This rider will pay an additional benefit
equal to the lesser of the employees full AD&D benefit or $25,000 in the event of a vehicle
accident causing death if the seat belt was in use at the time of the accident.
US Able, in consideration of employee participation in two of their voluntary group plans
(Cancer and Voluntary AD&D) , will at no cost establish and serve as a third party administrator
for a Section 125 Cafeteria Plan. Internal Revenue regulations permit group premiums,
employee and dependent unreimbursed medical care expense, deductibles and co -payments and
dependent care for eligible children and other dependents to be incurred on a pre-tax basis
through payroll contributions to a flexible spending account. These expenses are reimbursed to
the employee as projected expenses occur. A pre-tax limit of $2,000 on unreimbursed medical
expenses for each participant account has been set for the initial plan year
Employees must make an annual calendar year election as to expense categories and amounts to
be contributed pre-tax. The initial group presentations and enrollments must be completed by
November 14 to effect a January 1, 2000 enrollment. Thus to permit installation of this plan on
January 1, the Group Renewal/Cafeteria Plan Agenda item has been moved forward to the
October 5 meeting in order to allow a 4-5 week enrollment period.
Further information pertaining to each of the plans is contained in policy resumes attached
hereto.
•
2000 Budget Summary By Account - Estimated
Long Term Disability (LTD)
Accidental Death & Dismemberment (ADD)
- Life Insurance
Fund
General (1010)
Street (2100)
Community Development (2180)
Parks Development (2250)
Drug Law Enforcement (2930)
Water & Sewer (5400)
Solid Waste (5500)
Airport (5550)
Shop (9700)
CADATA 123-DATA\OOADDLTD. W K4
LTD
Budget
ADD
Budget
Life Insurance
Budget
52,050 $ 17,142 $
3,458 1,440
606 203
710 315
414 149
7,757 3,309
3,470 1,530
1,020 363
1,775 675
71,260 $
25,126 $
78,075
5,187
909
1,065
621
11,636
5,206
1,530
2,662
106,891
•
•
•
•
Enhanced Benefit Option
Group Term Life/AD&D
Proposal
Presented to
City of Fayetteville
by
Barbara Lovin
August 11, 1999
USAble Life
USAble Life is Rated "A-" (Excellent) by the A.M. Best Company
•
•
Presented to: City of Fayetteville
USAble Life Facts
•
USAble Life was originally chartered in December of 1980 as Life of Arkansas to write Life
and Accident and Health insurance.
During the past 18 years, USAble Life has grown to be a highly successful insurance
company involved in both group and individual payroll deduction products.
Highlights
• The company insures over 500,000 individuals
• The company has more than $4.4 billion of insurance in -force
• The company has extensive experience in the implementation and enrollment of
voluntary payroll deduction products and administration of Section 125 Cafeteria Plans
in commercial accounts and educator groups.
We offer a complete innovative choice of products, from employer-sponsored group plans to
employee -paid supplemental coverage, all at competitive rates. Our portfolio of products
includes:
• Group and Individual Life
• Group AD&D
• Short Term and Long Term Disability
• Dependent Life
• • Voluntary Term Life
• Universal Life
• Supplemental Hospital Benefits
• Cancer coverage and Accident coverage
• Voluntary Disability Coverages, both Short Term and Long Term
Management and key staff have years of experience working with employers and
employees. This experience, along with our state of the art administration system, enables
smooth enrollments and administration for all product lines.
•
USAble Life is rated "A-" (Excellent) by the A.M. Best Company and stands behind a stiong
commitment to superior products and customer service.
COMPANY HEADQUARTERS:
USAble Life
USAble Corporate Center
320 W. Capitol, Suite 700
P.O. Box 1650 (72203)
Little Rock, Arkansas 72201
Toll Free: 800-648-0271 Telephone: (501) 375-7200 Fax: (501) 378-3333
Page 2
Presented to: City of Fayetteville
A Plan of Group Insurance
Schedule of Benefits
Classification of Employees
Class 1
All full time employees who customarily
work at least 40 hours per week
Class II
Any employees previously employed
full time who is a designated staged
retiree and who works an average of
20 hours per week on a regular basis
Amount of Life Amount of AD&D
1.5 Times Salary, 1.5 Times Salary,
Maximum $150,000 Maximum $150,000
1.5 Times Salary, 1.5 Times Salary,
Maximum $150,000 Maximum $150,000
[Wates, Life Insurance Volume and Monthly Premium Calculations
Rates for Group Insurance
Life per $1,000 $0.24
AD&D per $1,000 $0.05
Volume of Insurance
Life Insurance $21,689,000
AD&D Insurance $21,689,000
Monthly Premium
Life Insurance $5,205.36
AD&D Insurance $1,084.45
TOTAL MONTHLY COST $6,289.81
Reductions, Terminations and Assumptions
Reductions and Terminations
Class I- Life and Accidental Death and Dismemberment benefits will reduce 33 1/3 percent of the pre -
age 67 amount at age 67 and at age 70. Benefits terminate at retirement.
Class 11- Life and Accidental Death and Dismemberment benefits will reduce 33 1/3 percent of the pre -
age 67 amount at age 67 and at age 70. Benefits terminate the earlier of age 75 or retirement.
Assumptions
Eligible Employees: 528
The foregoing rates are based on employee data submitted with respect to the number of employees
listed above in the assumptions section. Actual rates will be based on enrollment. The final rates will
be guaranteed for 2 year(s) from the group's effective date.
Proposal prepared: August 11, 1999: and expires November 11, 1999 unless renewed.
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•
Presented to: City of Fayetteville
Life Insurance
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Death Benefit
The face amount of the policy, as determined by the schedule, is payable to the employee's
beneficiary in the event of his death from any cause. The life insurance will be paid in a lump
sum or in installments as specified by the employee or the beneficiary.
Active Work or Actively at Work
The Insured reports for work at his usual place of employment and is able to perform all the
duties of his regular occupation for the entire normal work day.
Beneficiary
Each employee may name anyone he desires except the employer, as the beneficiary or
beneficiaries to whom the insurance is to be paid. This designation may be changed by the
employee at any time.
Right of Conversion
The employee's life insurance automatically ceases 31 days after termination of employment.
During this 31 -day period and subject to the terms of the group policy, he may convert his group
life insurance without evidence of insurability to an individual life insurance policy (except term
insurance) without disability benefits.
Total Disability Benefit
• If the employee becomes totally disabled from any cause before reaching age 60, the life
insurance is continued, subject to the terms of the group policy, for the duration of his total
disability without payment of further premiums. If the employee dies before the total disability
ceases, the face amount of the life insurance is payable to his beneficiary.
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Suicide
If an Insured Person, whether sane or insane, dies by suicide within one year of his effective
date of insurance, the death benefit will be limited to the amount of premiums paid for this
insurance.
With respect to employees insured on the effective date of this policy:
(1) If this policy replaces another group life policy, the one-year limitation for death
by suicide shall be reduced by the number of months an insured employee was
continuously insured by the prior plan; and
(2) The benefit payable shall be the lesser of the amount otherwise payable under
this policy or the amount provided by the prior policy.
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Presented to: City of Fayetteville
Life Insurance
Termination of Insurance
Insurance will terminate automatically on the earliest of the following dates:
(a) the last day of the period for which a premium payment is made, if the next
payment is not made;
(b) the date the insured becomes a member of the armed forces;
(c) the date the policy or a specific benefit terminates;
(d) the date the insured ceases to be a member of an eligible class; or
(e) the date the insured ceases to be actively at work.
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