Placement: Consent Agenda
Action Requested: Motion / Vote
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Approval of Contract #20240128 between the City of Port St. Lucie and the Standard Insurance Company for Employee Basic Life and AD&D, Supplemental Life, Short Term Disability, and Long Term Disability Insurance Benefits
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Submitted By: Natalie Cabrera, Human Resources Director
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Natalie Cabrera, Human Resources Director
2. Parties: City of Port St. Lucie and the Standard Insurance Company.
3. Purpose: To provide Employee Basic Life and Accidental Death & Dismemberment (AD&D), Supplemental Life, Short Term Disability (STD), and Long Term Disability (LTD) Insurance Benefits.
4. New/Renewal/Modified: New.
5. Duration: Three (3) year initial term with two (2) separate one-year renewal options. Initial contract term commences October 1, 2024 and goes through September 30, 2027.
6. Benefits to Port St. Lucie: Provides City employees the option to obtain Basic Life and AD&D, Supplemental Life, Short Term Disability, and Long Term Disability Insurance Benefits.
7. Cost to Port St. Lucie (Annual and Potential): $408,343.00 Annually; $1,225,029.00 over the initial term of the Contract (3 years).
Presentation Information: Staff and a representative of the Gehring Group will be available to answer any questions the Council may have.
Staff Recommendation: Move that the Council approve Contract #20240128 between the City of Port St. Lucie and the Standard Insurance Company for Basic Life and AD&D, Supplemental Life, Short Term Disability, and Long Term Disability Insurance Benefits.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve Contract #20240128 between the City of Port St. Lucie and the Standard Insurance Company.
2. Move that the Council not approve Contract #20240128 and provide staff direction.
Background: The City entered into an agreement with the Life Insurance Company of North America (LINA) CIGNA, n/k/a NY Life, in 2018 for the purposes of providing Employee Group Life AD&D, STD, LTD, and Supplemental Life Insurance Benefits (Contract No. 20180198). The initial contract term was for a period of three (3) years, commencing December 29, 2018 through December 29, 2021. At the expiration of the initial contract term in 2021, the parties exercised the renewal option for one additional two (2) year period, commencing January 1, 2022 through December 31, 2024. As the current contract does not provide for further renewal options, the City, through its third party administrator, The Gehring Group, released a Request for Proposals (RFP) to the market for the same benefits.
Issues/Analysis: The Standard Insurance Company has proposed the lowest overall premium, with a cost savings to the City of approximately thirty-four percent (34%) when compared across all other responses. In addition, the Standard Insurance Company proposal provides added benefits that set them apart from their competitors, including: a rate guarantee for three (3) years; lower charged rates for supplemental life insurance resulting in a cost savings to employees; an increase to the guaranteed issue amount, requiring no medical underwriting, from $260,000.00 to $300,000.00; and three (3) face-to-face EAP sessions included for members.
Financial Information: The Annual expenditure is $408,343.00. The cumulative cost over the initial term of the agreement (3 years) is $1,225,029.00.
Special Consideration: The current contract with NY Life (included as an attachment) provides that the City may terminate the agreement by providing the vendor with thirty (30) calendar days’ notice in writing. The City will be exercising this option to allow for the agreement with the Standard Insurance Company to coincide with the start of the 24/25 fiscal year, to wit: October 1, 2024.
Location of Project: N/A
Attachments:
1. Contract #20240128 between the City of Port St. Lucie and The Standard Insurance Company.
2. RFP Evaluation.
3. Contract 20180198 between the City of Port St. Lucie and the Life Insurance Company of North America (LINA) CIGNA.
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 24183-06
Legal Sufficiency Review:
Reviewed by Alyssa Lunin, Deputy City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.