Item 12 - Change of Long Term Disability Insurance Carrier �GEI�tDA REPORT " —°",Y �F ,,,,,N
CITY OF POWAY
This report is incl�ded on the Consent Calendar. T�eze will be no separate discussion of the " �
[epoct ptior to approval by the City Council unless members of Ue Couneil, staff or pvblic yFCiry��"""' �p
request it co be zemoved fzom the Consent Calendar and discussed separately. If you vish [o �^' rv[ �
� have this repor[ pulled .'or discussion, please fill out a slip indicating the zeport number
and give it to [he City Clerk prior to ehe beqinning of Che City Council meeting. �
TO: Honorable Mayor and Members of the City Council
FROCQ: James L. Bowersox, City Mana�
V
INITIATED BY: Susan M. Pulone, Director of Administrative Services
Joyce A. Posey, Personnel Manage�
DATE: December 2 , 1986
SUBJECT: Change of Long Term Disability Insurance Carrier
ABSTRACT
Following a review of the City' s Long Term Disability Insurance Program
it is recommended that the City Council approve a change in the
insurance carrier.
BACKGROUND
For more than five years City employees have had long term disability
insurance coverage under a policy with Standard Insurance Company:
This coverage provides for a percentage of income continuance in the
event that an employee becomes totally disabled because of a non-
job connected injury or sickness. Premiums for this coverage are
paid for by the City, as provided under the Memoranda of Understanding
with the employee associations.
FINDINGS
Through a review of our health care coverages we have become aware of
a Long Term Disability Insurance Program that will provide benefits
and services equal to our current plan at a substantial savings in
the premium cost.
The current insurance provider notified us of a 7. Sg rate increase
effective November l, 1986. It is estimated that a $13 , 000 - $14 , 000
annual cost savings will be realized by changing from the current plan
to a plan with Canada Life Assurance Company with no change in the
level of service or benefits . An estimated cost summary for both
plans is attached. The proposed change would have an effective date
ACTION:
�
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Agenda Report - Change of Long Term Disability Insurance Carrier
December 2 , 1986
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of December 1, 1986 , and the new rate will be auaranteed for a
two-year time period if the plan is installed prior to January 1,
1987.
RECOMMENDATION
It is recommended that the City Council approve the change in the
Long Term Disability Insurance carrier and authorize the City Manager
to sign the appropriate application and agreement.
JLB:SMP:JAP:vf
Attachment:
1) Estimated cost summary
UE; `w 198� ITf M �.�
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S UMMARY OF C O S T S
STANDARD INSURANCE (Current) CANADA LIFE (Proposed)
COST COST
Management: Management:
$111,860 payroll $111,860 payroll
x .0155 factor x .0102 factor
$1,733.83 per month $1,139.18 per month
Non-Management: Non-Management:
$206,083 payroll $206,083 payroll
x .0155 factor x .00882 factor
$2,369.95 per month $1,817.66 per month
TOTAL MONTHLY COST TOTAL MONTHLY COST
$4,103.78 $2,956.84
TOTAL ANNUAL COST TOTAL ANNUAL COST
$49,245.36 $35,482.08
ANNUAL SAVINGS WITH NO CHANGE IN BENEFITS
$13,763.28
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