6.3 Life Insurance RenewalCITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
12/05/22 4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL:
NO:
BY:
HUMAN RESOURCES
ITEM FINAL AP VAL:
NO:
Page 1 3 BY: Natalie Fischer, Directo k
BY:
ITEM:
Authorize City Manager to renew an agreement for life insurance benefits with MetLife.
BACKGROUND:
The City has historically provided a group 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.
Classified part-time employees, or employees who work more than 20 hours but less than 28 hours
per week, receive a reduced benefit of $7,500 and $5,000 respectively.
Gallagher Benefit Services, Inc. of Wichita, KS (formerly Hardman Benefits) has handled our life
insurance options since 2010. This was a referral through the former Assurance Partners of Salina.
Staff requested that Gallagher solicit quotes on our behalf because Met Life proposed an increase.
Quotes were solicited from Reliance Standard, Unum, Guardian, and Mutual of Omaha, but they all
declined to quote this year as they were not going to be competitive with our renewal. MetLife
originally provided a one-year rate proposal, but upon request from staff they submitted a two-year
proposal at the same rate for the second year. This is beneficial both for cost control and budgetary
purposes since in the event we renew with them, we will know the rate when working on the 2024
budget.
Met Life is a global insurance provider. Established in 1868, they serve approximately 100 million
customers with operations in 50 countries. Met Life reports an A.M. Best financial strength rating of A+
as of December 2021. The table below summarizes the rates by years along with companies that
have provided the coverage.
Proposed:
Year 2010-13 2015-17 2018-20 2021-22 2023-24
Price/$1,000 of Coverage $0.14 $0.14 $0.14 $0.14 $0.15
Dependent Coverage (Monthly) $2.99 $2.99 $3.084 $3.084 $3.084
Company Lincoln Financial Reliance Standard Met Life Met Life Met Life
FISCAL NOTE:
Actual expense varies slightly due to the employee and dependent counts along with payroll
fluctuations. The life insurance expense was budgeted at $0.18 per $1,000 of coverage, totaling
approximately $53,000. Historically, we have attempted to budget slightly above current rates to
ensure enough funds were available for unknown renewal increases as well as to cover dependent
coverage since that is not directly calculated on payroll dollars nor is it calculated for each employee
for budget purposes. The renewal increase from $0.14 to $0.15 would equate to $3,000 on
$25,000,000 of payroll. Some payroll expenditures, such as longevity and vacation buy -backs or pay
outs, do not result in life insurance premium assessments, so staff believes the budget will cover the
increase.
AGENDA SECTION
NO:
ITEM
NO:
Page 2
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
12/05/22 4:00 P.M.
ORIGINATING DEPARTMENT:
HUMAN RESOURCES
BY: Natalie Fischer, Director
FISCAL APPROVAL:
BY:
FINAL APPROVAL.
W
The Salina Airport Authority, is also covered by this policy but pays all premiums for their employees.
RECOMMENDED ACTION:
Staff has identified the following options for the City Commission's consideration:
1.) Authorize the City Manager to renew life insurance with MetLife for two years.
2.) Authorize the City Manager to renew life insurance with MetLife for one year.
3.) Postpone consideration to a specified date and time and provide staff direction regarding
additional information or amendments the City Commission would like to request for their
further consideration.
4.) Vote to deny the renewal, ending the additional group life insurance coverage.
Staff recommends Option #1.
Attachment: MetLife renewal proposal
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