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Home My WebLink About173-01 RESOLUTIONRESOLUTION NO. 173-01 • A RESOLUTION APPROVING THE RENEWAL OF EMPLOYEE GROUP POLICIES WITH US ABLE LIFE TO PROVIDE LIFE, ACCIDENTAL DEATH AND DISMEMBERMENT, AND LONG TERM DISABILITY INSURANCE COVERAGE AND TO ADMINISTER THE SECTION 125 CAFETERIA PLAN FOR POLICY YEAR 2002. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council hereby approves the renewal of employee group policies with US Able Life to provide Life, Accidental Death and Dismemberment, and Long Term Disability insurance coverage and to administer the Section 125 Cafeteria Plan for policy year 2002. PASSED AND APPROVED this 18th day of December, 2001. ATTEST: By APPROVED: By EATHER WOODRUFF, Ci Clerk NAME OF FILE. CROSS REFERENCE: Resolution No. 173-01 12/18/01 Resolution No. 173-01 Renewal of Employee Group Policies with US Able Life to provide Life, Accidental Death and Dismemberment and Long Term Disability Insurance Coverage and to administer the Section 125 Cafeteria Plan for Police Year 2002 12/18/01 Staff Review Form 12/20/01 Memo to Don Bailey, Personnel Director, from Heather Woodruff, City Clerk NOTES: FAYETTEVItLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE • TO: FROM: DATE: SUBJECT: Mayor Dan Coody and The City Council Ted Webber, Administration Service D rect Dori Bailey, Personnel Director November 30, 2001 Employee Group Life, AD&D, LTD, Voluntary AD&D and Cancer policies, and Cafeteria Plan Administration renewal for calender year 2002. The expiration date for each of the policies and Cafeteria Plan Administration is 12-31-01. The rates for these coverages were set through competitive bidding for plan year 2000. We received a two year rate guarantee which continued these same rates through the plan year 2001. U.S. Able Life notified us by letter dated November 9, 2001 that there would be no increase for 2002. Life AD&D LTD Vol AD&D* Vol AD&D* Cancer* Cafeteria Plan (Per $1,000 coverage) (Per $1,000 coverage) (Per $100 of covered payroll) (Per $25,000 coverage) (Per $25,000 coverage) .21 .05 .46 1.50 Employee only 2.00 Family Various 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. U.S Able, in consideration of employee participation in two of their Voluntary Group Plans (Cancer and Voluntary AD&D), serves at no cost as a third party administrator for our Section 125 Cafeteria Plan. Internal Revenue regulations permit Group premiums, employee and dependent unreimbursed medical care, deductible and co -payment expense and dependent care cost 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 expense occurs. R Er P. • The estimated cost to be incorporated in the 2002 Budget has been calculated by the Budget & Research Division and is attached as a schedule. An annualized cost forecast of these plans is relatively simple and we are confident the projected costs will not be exceeded. 2002 Budget Summa ByFunc? 9 rY - Long Term Disability (LTD) - Accidental Death & Dismemberment (AD&D) - Life Insurance Fund LTD AD&D Life Insurance Budget Budget Budget General (1010) $ 62,641 $ 7,646 $ 63,731 Street (2100) 4,333 666 4,409 Community Development (2180) 468 54 476 Parks Development (2250) 1,940 267 1,974 Drug Law Enforcement (2930) 471 59 480 Water & Sewer (5400) 7,563 1,169 7,694 Solid Waste (5500) 5,815 907 5,916 Airport (5550) 898 136 914 Shop (9700) 1,862 270 1,894 C:\DATA\ 123-DATA\02ADDLTD. WK4 $ 85,991 $ 11,174 $ 87,488 9 USAble Life November 30, 2001 City of Fayetteville BeffRay 113 W. Mountain Fayetteville, AR 72701 RE- Policy Number 1000246701 Dear Beff Ray: • Your group life insurance plan with USAble Life renews January 1, 2002. We have completed the annual review of the rates for your plan. Based on this analysis, we are pleased to inform you that for the upcoming plan year your rates will remain the same. Your rates are shown below: Benefit Current Rate Life $0.21 AD&D $0.05 Long Tern Disability $0.46 VAD&D Employee Plan $1.50 per $25,000 Benefit Amount VAD&D Family Plan $2.00 per $25,000 Benefit Amount Thank you for giving us the opportunity to serve your employees' insurance needs. Please feel free to contact our office (375-7200 or 800/648-0271) or your local insurance representative whenever we can be of assistance. Sincerely; Henry W. Reed Director, Group Underwriting Barbara Lavin 0185 P.O. Box 1650 Licle Rock, Arkansas 7222034550 (501) 375-7200 • • Schedule of Insurance Policy Number R2467 Waiting Period: Present Employees: Future Employees: Policyholder Effective Date City of Fayetteville January 1, 2000 30 days 30 days Benefits for eligible employees shall be determined in accordance with the following schedule: igner tnousand. 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 67 and 70, and terminate at retirement. Class 2: Employee Life and Accidental Death & Dismemberment: Benefits reduce 33 1/3 % of the pre -age 67 amount at ages 67 and 70, and terminates the earlier of age 75 or retirement. CLASSIFICATION LIFE AND AD&D Class 1: All Full -Time Employees customarily working at least 40 hours per week 1 1/2 Times Annual Salary Maximum $ 150,000• Class 2: Any Employee previously employed full-time who is a designated staged retiree and who works an average of 20 hours per week on a regular basis 1 1/2 Times Annual Salary Last Earned When Working Full -Time Maximum $150,000* igner tnousand. 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 67 and 70, and terminate at retirement. Class 2: Employee Life and Accidental Death & Dismemberment: Benefits reduce 33 1/3 % of the pre -age 67 amount at ages 67 and 70, and terminates the earlier of age 75 or retirement. • • Employee Accidental Death and Dismemberment Benefit If an insured employee suffers a loss described below, we will pay the amount of insurance that applies. The insured employee or his beneficiary must give us proof that: 1. injury occurred while the insurance was in force under this section; 2. loss occurred within 90 days after the injury; and 3. loss was due to injury independent of all other causes. AMOUNT OF INSURANCE We will pay the full benefit shown in the Schedule of Insurance for loss of: 1. life; 2. both hands or both feet; 3. one hand and one foot; 4. sight of both eyes; 5. one hand and sight of one eye; or 6. one foot and sight of one eye. We will pay one-half the full benefit shown in the Schedule of Insurance for loss of: 1. one hand; 2. one foot; or 3. sight of one eye. Loss of sight means total and irrecoverable loss of sight. Loss of hands or feet means severance at or above the wrist or ankle, unless the State in which this policy is issued defines the loss differently. In paying this benefit, we will consider only losses sustained while insured under this section of the policy. We will pay no more than the full amount shown in the Schedule of Insurance for losses resulting from any one injury. LIMI FATIONS We will not pay a benefit for a loss caused directly or indirectly by: 1. disease, bodily or mental infirmity, or infection (except bacterial infection of a visible injury); 2. suicide or intentionally self-inflicted injury, whether sane or insane; 3. participation in a riot or insurrection, or commission of an assault or felony; 4. war or any act of war, declared or undeclared; 5. use of any drug, hallucinogen, controlled substance, or narcotic unless prescribed by a physician; 6. travel or flight in, or descent from, any aircraft unless as a fare paying passenger on a commercial airline flying between established airports on: (a) a scheduled route, or (b) a charter flight; or 7. participation in parachute or hang gliding sports, or an organized race or speed contest. "Participation" in a riot shall include promoting, inciting, conspiring to promote or incite, aiding, abetting, and all forms of taking part in, but shall not include actions taken in defense of public or private property, or actions taken in defense of the person of the insured, if such actions of defense are not taken against persons seeking to maintain or restore law and order including but not limited to police officers and firemen. i • Employee Accidental Death and Dismemberment (continued) "Riot" shall include all forms of public violence, disorder or disturbance of the public peace, by three or more persons assembled together, whether or not acting with common intent and whether or not damage to persons or property or unlawful act or acts is the intent or the consequence of such disorder. "War" means declared or undeclared war or a conflict involving the armed forces of any country, group of countries, governments, or international organization. • Schedule of Insurance — Optional Benefit Voluntary: Accidental Death & Dismemberment (VAD&D) Any eligible employee may select Voluntary AD&D coverage in units of $25,000 up to a maximum of $250 000 by completing an application during the enrollment period and paying the required premium. Amounts over $150,000 are subject to a limit of ten (10) times the employee's annual salary rounded to the next higher $25,000 increment. FAMILY PLAN COVERAGE The insured employee may also choose to cover his spouse and/or dependent children. If he does, the amount of insurance applicable to members of the family is based on the composition of the family at the time of loss and is expressed as a percentage of the employee's benefit amount as follows: REDUCTIONS, TERMINATIONS AND SPECIAL PROVISIONS Employee VAD&D: Benefits reduce 35 % at age 70. A further reduction of 20% will occur at age 75, as well as additional 15% reductions at ages 80 and 85. All reductions are based upon the pre - age 70 benefit amount. Benefits terminate at retirement. Dependent VAD&D: Coverage for a dependent spouse terminates at the spouse's age 70. Coverage for dependent children terminates on the date the employee's coverage terminates or the date as defined under Termination of Dependent Insurance. PERCENTAGE OF ' INSURANCE FOR: -... FAMILY COMPOSITION AT TIME OF LOSS Employee & -.Spouse Employee & Children Employee, Spouse, & Children Employee 100% 100% 100% Spouse 50% N/A 40% Each Child N/A 10% 5% REDUCTIONS, TERMINATIONS AND SPECIAL PROVISIONS Employee VAD&D: Benefits reduce 35 % at age 70. A further reduction of 20% will occur at age 75, as well as additional 15% reductions at ages 80 and 85. All reductions are based upon the pre - age 70 benefit amount. Benefits terminate at retirement. Dependent VAD&D: Coverage for a dependent spouse terminates at the spouse's age 70. Coverage for dependent children terminates on the date the employee's coverage terminates or the date as defined under Termination of Dependent Insurance. CLASSES TO BE COVERED All Full Time Employees AMOUNT OF INSURANCE DISABILITY BENEFIT a. 601 (benefit percentage) of basic monthly earnings not monthly benefit, less other income benefits. b. The maximum monthly benefit is $6,000. c. The minimum monthly benefit is $50.00. MAXIMUM BENEFIT PERIOD Age At Disability Less than age 60 60 61 62 63 64 Benefit Period To 60 48 42 36 30 Age 65 months months months months months ELIMINATION PERIOD 180 days MINIMUM REQUIREMENT FOR ACTIVE EMPLOYMENT 30 regularly scheduled hours per week. WAITING PERIOD: If you were If you were hired after the CONTRIBUTIONS You are not required to contribute to the cost of your insurance. • to exceed the maximum Age At Disability 65 66 67 68 69 and over Benefit Period 24 months 21 months 18 months 15 months 12 months hired on or before the policy effective date: policy effective date: 90 days 00 days • ICY AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW • STAFF REVIEW FORM For the Fayetteville City Council meeting • 266/ of DECEMBER 18,'2006 FROM: DON BAILEY PERSONNEL Name Division ADMIN. SERVICES Department ACTION REQUIRED: RENEW EMPLOYEE GROUP POLICIES FROM U S ABLE LIFE TO PROVIDE LIFE, AD&D, LTD COVERAGE AND SEC. 125 CAFETERIA PLAN ADMINISTRATION COST TO CITY: $ 184,653 EST. YR. 2002 Cost of this Request VARIOUS Account Number Project Number $ 184,653 EST. YR. 2002 Category/Project Budget $ 0 Funds Used To Date $ 184,653 Remaining Balance LIFE/AD&D, LTD INS. Category/Project Name CITY WIDE Program Name CITY WIDE Fund BUD ET Bu Manager Budgeted Item Budget Adjustment Attached Administrative Services Director CONTRACT/GRANT/LEASE itv At • rney A REVIEW: Purchasing Officer /2,4/o! Date /4/4/ Date 14k4=o1 Date GRANTING AGENCY: / ABLv ig/4401 t@rnal lyL diEor Date ADA Coord nator Date STAFF RECOMMENDATION: APPROVE CONTRACT Depsrtment Director • Date Administrative Services Director Mayor C:\DATA\BLANKFOR\AGENDA.BLK Date Cross Reference New Item: Yes No Prev Ord/Res #: Orig Contract Date: Orig Contract Number: s F FAYETTEVfLLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE • To: Don Bailey, Personnel Director From: Heather Woodruff, City Clerk Date: December 20, 2001 Please find attached a copy of Resolution No. 173-01 approving the renewal of employee group policies with US Able Life. The original will be microfilmed and filed with the City Clerk cc: Nancy Smith, Internal Audit c 010 03 Update Document Reference RES Date 12182001 Cit Fayetteville ndex dex Maintenance it Action Ref. Taken Brief Description 173 • 12/26/2001 16:43:32 RENEWAL OF EMPLOYEE GROUP POLICIES Enter Keywords File Reference # Security Class Expiration Date Date for Cont/Referred: Name Referred to RES. 173-01 RENEWAL BMPLOYEE GROUP POLICIES !JS ABLE LIFE LIFE ACCIDENTAL DEATH DISMEMBERMENT LONG TERM DISABILITY INSURANCE` SECTION 125 CAFETERIA PLAN POLICY YEAR 2002 MICROFILM Cmdl-Return CmdB-Retention CmdS-Abstract Yes No Retention Type: **** Active Cmd4-Delete Cmd3-End Press 'ENTER' to Continue (c) 1986-1992 Munimetrix Systems Corp.