Agenda Item # 3
Columbus Consolidated Government
Council Meeting
June 26, 2012
Agenda Report # 065
TO: Mayor and Council
SUBJECT: Employee Life Insurance Contract Renewal
INITIATED: Human Resources Department
Recommendation: Approval is requested to authorize benefits manager,
Northwestern Benefits Corporation of Georgia to contract with insurance company
CIGNA for renewal of the employee life insurance plans.
Background: On September 1, 1998 the City entered into a contract for employee
life insurance with Provident Life & Accident Insurance Company for the
provision of group life insurance products, ending many years of self-funding
of this benefit, saving thousands of dollars annually in claims and
administrative costs and eliminating millions of dollars in potential
liability. Effective September 1, 2000 the employee life insurance coverage
was changed to ReliaStar insurance company to obtain cost savings and in 2003
the contract was placed with Hartford Life and Accident Insurance Company.
Analysis: Life insurance is somewhat of a commodity within that industry
making it advantageous to shop for rates periodically. This practice has saved
the City hundreds of thousands of dollars since we started this practice in
1998 and also provided additional benefits and services for the employees
within the framework of the policy structure. The current renewal
recommendation with CIGNA will provide us with a carrier with a strong local
presence; higher financial ratings than the present carrier; administrative
assistance from assumption of portability and conversion rights notification
requirements to terminating employees; bereavement and legal counseling for
employees and beneficiaries; accident and travel assistance including medical
evacuation and transportation of remains; and free on-line will preparation.
The proposed contract also contains a 3-year rate guarantee.
Financial Considerations: Changing life insurance carriers will save the City
an estimated $44,452 annually.
Projected Annual Fiscal Impact Statement: None except as noted in Financial
Considerations.
Legal: Authorization of Council to extend the contract with Northwestern is
required to contract with CIGNA Insurance Company.
Recommendation/Actions: The City Manager, Human Resources Director and Finance
Director recommend the proposed contract with CIGNA.
A RESOLUTION
NO. #____
A RESOLUTION AUTHORIZING BENEFITS MANAGER NORTHWESTERN BENEFITS CORPORATION OF
GEORGIA TO CONTRACT WITH INSURANCE COMPANY CIGNA FOR RENEWAL OF THE EMPLOYEE
LIFE INSURANCE PLANS.
WHEREAS, the current contract for employee life insurance with the Hartford
Life must be renewed on September 1, 2012; and,
WHEREAS, Hartford Life offered to continue the City sponsored employee life
insurance plans with a premium increase of 52.78% from $320,054 to $488,971, an
increase of $168,912 annually; and,
WHEREAS, Northwestern solicited bids for our life insurance contract and
obtained a best quote from CIGNA with a renewal premium increase to 38.89%, an
annual premium of $444,519 and annual savings over Hartford Life of $44,452;
and,
WHEREAS, CIGNA is offering additional value-added administrative and employee
services and a 3-year rate guarantee; and,
WHEREAS, CIGNA will provide a seamless transfer of employee coverage from the
existing Hartford Life contract.
NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS FOLLOWS:
That Northwestern Benefits Corporation of Georgia, as City benefits
manager may contract with CIGNA for continuation of existing employee life
insurance plans for the plan year beginning September 1, 2012.
______________
Introduced at a regular meeting of the Council of Columbus, Georgia, held
the _________ day of ____________, 2012 and adopted at said meeting by the
affirmative vote of _________ members of said Council.
Councilor Allen voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Henderson voting __________.
Councilor Huff voting __________.
Councilor McDaniel voting __________.
Councilor Thomas voting __________.
Councilor Turner-Pugh voting __________.
Councilor Woodson voting __________.
________________________________ ___________________________
Tiny B. Washington, Clerk of Council Teresa Pike Tomlinson, Mayor
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