1999-099 - Laserfiche WebLink

Home Browse Search

• 40 LIFE INSURAI' CT The current life insurance program with CIGNA has been included in the Minimum Premium contract since the plan's inception. The amount of life insurance claims have continued to exceed the premium collected for the past two years and continue to add an approximate $100,000 to the MCSD deficit each year in addition to the health insurance deficit. Therefore, it is The Gehring Group's recommendation to cancel the life insurance contract under CIGNA HealthCare and fully insure this benefit for the upcoming plan year(s). The following chart shows the two lowest bidders as well as CIGNA's renewal proposal for the current life insurance benefit of $35,000 for full time employees and two times annual salary ($75,000 maximum) for administrative personnel: *Slamkird s proadurrt cull Ix, guaranicerl for cur arldifir rml levo years if elcrrrrr.s experience Is trader 100% after the first Iwo Years` It is apparent that CIGNA'S renewal is uncompetitive in comparison to the two lowest bidders. Therefore, the Insurance Committee made and passed the motion to switch the MCSD life insurance coverage from CIGNA to Provident for the March 1, 1999 effective date. Provident provided a rate guarantee of three years for the proposed premium. Standard provided a two year rate guarantee with the option to renew at the same rate for an additional two years providing the claims experience for the group is less than 100% during the first two years of coverage. The Committee felt that Provident was the best option for MCSD because its proposal produced a guaranteed cost savings of approximately $44.000 per year over the current rate for the next three years. In addition, history has shown that the life insurance claims for (his group have exceeded the premium collected for the past two years. Accepting Provident's proposal will guarantee a consistent life insurance program for three. years. CIGNA Current CIGNA Renewal Provident Life & Accident Standard lfi-4T-" Life Rate Per $1,000 50.26 $0.41 $0.21 $0.20 AD&D hate Per $1,000 1;0.03 $0.03 $0.072 $0.02 TOTAL Itate Per 51,000 St1.29 St1.44 50.232 $0.22 Estimated [r0111me* 568.563,318 $48,563.318 $68,563.318 $68,563,318 Monthly Premium $19,883.36 $30,167.86 $15,906.69 $15.083.93 Annual Premium $238,600.35 $362,01.4.32 $190,880.28 $181,007,16 S Increase $123,413.97 ($47,720.07) ($57,593.19) % Increase :11.7% -20.0% -24.1% RATE GUARANTEE n1a 1 year 3 ears Z ears* *Slamkird s proadurrt cull Ix, guaranicerl for cur arldifir rml levo years if elcrrrrr.s experience Is trader 100% after the first Iwo Years` It is apparent that CIGNA'S renewal is uncompetitive in comparison to the two lowest bidders. Therefore, the Insurance Committee made and passed the motion to switch the MCSD life insurance coverage from CIGNA to Provident for the March 1, 1999 effective date. Provident provided a rate guarantee of three years for the proposed premium. Standard provided a two year rate guarantee with the option to renew at the same rate for an additional two years providing the claims experience for the group is less than 100% during the first two years of coverage. The Committee felt that Provident was the best option for MCSD because its proposal produced a guaranteed cost savings of approximately $44.000 per year over the current rate for the next three years. In addition, history has shown that the life insurance claims for (his group have exceeded the premium collected for the past two years. Accepting Provident's proposal will guarantee a consistent life insurance program for three. years.