8.3 Life Insurance Services
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION
DATE
11/16/2009
TIME
4:00 P.M.
AGENDA SECTION
NO:
8
ORIGINATING DEPARTMENT: APPROVED FOR
Human Resources AGENDA:
ITEM
NO.
Page 1
BY: Natalie Fischer
3
BY:
ITEM: Resolution No. 09-6677
Authorize City Manager to execute agreement for life insurance services with Lincoln Financial Group.
BACKGROUND:
The City has historically provided a life insurance benefit for our employees equal to their annual
salary, as well as dependent coverage of $15,000 for spouses and $10,000 for children, with classified
part-time at a reduced amount of $7,500 and $5,000 respectively. Sunflower Insurance Group, who
brokers several types of insurance for the City, brokered life insurance coverage for us through
Principal for coverage January 2007 to present, and Hartford for several years prior. Sunflower
Insurance Group obtained assistance from Gary Hardman, Hardman Benefit Plans, Inc. of Wichita,
KS. Mr. Hardman obtained quotes from 14 providers. The lowest rate was provided by Lincoln
Financial Group, offering a rate of $0.14 per $1000 coverage, $.026 per thousand lower than the next
lowest quote submitted by the City's current provider, Principal Financial Group. The comparative
rates for dependent coverage were also lower, ranging from $.04-.07 per covered individual
depending upon level of coverage. The rates are attached, and the options available from Lincoln
Financial are summarized below.
Founded in 1905 in Fort Wayne, IN, Lincoln Financial Group is headquartered in Radnor, PA and has
more than 11 locations throughout the U.S. as well as an operation in the United Kingdom. The
closest regional office is Omaha, NE. Lincoln Financial Group was ranked 274 on the 2009 Fortune
500 list. The organization covers group insurance contracts for approximately 8.7 million plan
participants and reports an A.M. Best financial strength rating of A+.
FISCAL NOTE:
Life insurance is currently in the 2010 budget at $77,815. Current year expenditures will equal
approximately $65,000, with the change in providers to save a minimum of $12,000. The actual
expense is dependent upon the type of coverage selected and will vary slightly due to the employee
and dependent counts and payroll fluctuations.
Emplovee Spouse/Child Est. Annual Cost
Option 1 1x's annual salary $15,000/$10,000 $53,027
Option 2 1x's annual salary $10,000/$5,000 $50,257
Option 3 1x's annual salary $0 $38,496
Option 4 1x's annual salary Employee self purchase $38,496
Option 5 $0 $0 $0
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION
DATE
11/16/2009
TIME
4:00 P.M.
AGENDA SECTION
NO:
8
ORIGINATING DEPARTMENT: APPROVED FOR
Human Resources AGENDA:
ITEM
NO.
Page 2
BY: Natalie Fischer
3
BY:
RECOMMENDED ACTION:
City Commission alternatives are considered to be as follows:
1) Authorize Staff to enter into an agreement with Lincoln Financial Group with benefits for
employees at one times the annual salary and dependent benefits at $15,000 and $10,000.
2) Authorize Staff to enter into an agreement with Lincoln Financial Group with employee life
insurance coverage at one times the annual salary, and spouse/child benefits reduced to
$10,000 and $5,000.
3) Authorize Staff to enter into an agreement with Lincoln Financial Group with benefits for
employees at one times the annual salary with no dependent benefits.
4) Authorize Staff to enter into an agreement with Lincoln Financial Group with benefits for
employees at one times the annual salary and no dependent benefits, but allow employees to
purchase optional dependent benefits coverage.
5) Eliminate group life insurance benefits for employees.
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