8.4 Life Insurance ServicesCITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
11/19/2012 4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL:
NO: 8
HUMAN RESOURCES BY:
ITEM DEPARTMENT FINAL APPROVAL:
NO: 4
Page 1 BY: Natalie Fischer BY:
ITEM: Resolution No. 12 -6946
Authorize City Manager to renew 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 2009 and Hartford for several years prior. Sunflower Insurance
Group obtained assistance from Gary Hardman, Hardman & Howell Benefits of Wichita, KS. In 2010,
based on quotes that Hardman obtained from 14 providers, the City of Salina changed providers and
entered into an initial agreement with Lincoln Financial Group. Offering the lowest rate of those 14
providers, the rate was $0.14 per $1000 coverage, $.026 per thousand lower than the next lowest
quote. Those rates were offered to the City of Salina through Jan. 1, 2013. Because staff has been
very satisfied with the high level of customer service and the response time to pay out a few claims
over the past three years, Lincoln was asked to provide renewal rates. They proposed to continue the
current rate for two additional years.
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 2013 budget at approximately $58,000. Current year expenditures
(2012) are projected to be just under $51,000. The actual expense varies slightly due to the employee
and dependent counts along with payroll fluctuations. Please note, the current rate remains the same
but the total projected monthly premium reflected in the proposal is slightly higher than referenced as
one of our subgroups, Salina Airport Authority, is also covered but pays all premiums for their
employees.
RECOMMENDED ACTION:
City staff has identified the following options and recommends Option 1.
1) Authorize Staff to renew agreement with Lincoln Financial Group at the current rate with
benefits for employees at one times the annual salary and dependent benefits at $15,000 and
$10,000.
2) Request that staff obtain quotes from Lincoln on alternative coverage options.
3) Request that staff obtain quotes from other providers.
4) Eliminate group life insurance benefits for employees.
nLincoln
Financial Group-
November 08, 2012
City of Salina
300 West Ash
Salina, KS 67401
Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.
RE: Renewal for Policy Number(s): 01- 0124979
The Lincoln National Life
Insurance Company
8801 Indian Hills Drive
Omaha, NE 68114 -4066
toll free (800) 423 -2765
www.LFG.com
REVISED
We are proud to provide your company with quality group products and services at a cost that delivers
sound value.
Each renewal period, we analyze current benefit and rate structures to determine the appropriate rates for
continued group insurance protection for your valued employees. This process includes recalculation of the
premium rates to reflect factors like:
• plan features
• demographics
• nature of business
• experience
• any adjustments to our underlying rate structure
Based upon our review, your renewal rates, effective 1/1/2013, are as follows:
The monthly premium shown is based upon current billed lives and volume.
We appreciate your business and look forward to the continued opportunity to meet your group insurance
needs. If you have any questions or if we can be of further assistance, please contact your local group
representative at 1- 866 - 422 -4487.
Sincerely,
Robert Thiele
Group Underwriting
Q
y t
r W
rad"y`i
Life
per $1,000 0.140
$3,085.88
0.140 $3,085.88
$0.00
1/1/2015
Dependent Life
per dep unit 1.820
$742.56
1.820 $742.56
$0.00
1/1/2015
Dependent Life
per dep unit 2.000
$816.00
2.000 $816.00
$0.00
1/1/2015
Dependent Life
per dep unit 2.990
$1,219.92
2.990 $1,219.92
$0.00
1/1/2015
Premium Totals:
$5,864.36 TOPI `�rKr� " $5,864.36
$0.00
'
The monthly premium shown is based upon current billed lives and volume.
We appreciate your business and look forward to the continued opportunity to meet your group insurance
needs. If you have any questions or if we can be of further assistance, please contact your local group
representative at 1- 866 - 422 -4487.
Sincerely,
Robert Thiele
Group Underwriting
cc: HARDMAN BENEFIT PLANS INC
8110 E 32ND ST NORTH #100
WICHITA, KS 67226
cc: Douglas S. Riggert
This letter serves as a policy amendment and should be kept with your policy.
Lincoln Financial Group focuses on making life easier for you by doing business
the way you want to do business - via the Web, telephone, IVR, e-mail and fax.
We are committed to being there when you need us!
Visit us on the web at www.lincoln4benefits.com or contact us at 1 (800) 423 -2765.
RESOLUTION NUMBER 12 -6946
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT WITH LINCOLN FINANCIAL GROUP FOR LIFE INSURANCE SERVICES.
BE IT RESOLVED by the Governing Body of the City of Salina, Kansas:
Section 1. That the City Manager is hereby authorized to execute an agreement with Lincoln
Financial Group for live insurance services, subject to the terms and conditions of the agreement.
Section 2. That the City Clerk is hereby directed to file the original agreement and retain
according to the City of Salina Records Management Policy.
Section 3. That this resolution shall be in full force and effect from and after its adoption.
Adopted by the Board of Commissioners and signed by the Mayor this 19`h day of November, 2012.
Norman M. Jennings, Mayor
(SEAL)
ATTEST:
Lieu Ann Elsey, CMC, City Clerk