Title
Employee Benefits - Life Insurance Renewal
History
Dearborn National, the Village’s current life insurance carrier, was selected to continue to provide the employee life insurance program as recommended with the FY2017 Employee Benefit Renewal 2016-0705 presented and approved by the Board on October 17, 2016. At that time, Dearborn National presented two renewal options:
Renewal at a 14.43% premium increase ($77,187.95) and an alternate at a 0% premium increase ($67,454.27) with the requirement of adding Dearborn National’s Voluntary Life Insurance program with a minimum 15% employee participation.
After receiving additional information regarding the administration of the voluntary life benefit, it was identified that the probability of reaching the required 15% participation is low and the cost to administer the program could outweigh the benefit of offering the voluntary life. Subsequent negotiation with Dearborn National resulted in a renegotiated renewal rate representing a 7.22% increase over FY2016 and an expected cost of $72,321.11. A spreadsheet outlining the original and renegotiated life insurance proposals is attached.
Staff recommends the acceptance of the renegotiated renewal option and not offering the voluntary life program. This item is being brought to you as an item with updated information.
Financial Impact
The FY2017 budget will include $72,321.11 in the Insurance Fund to cover expenses associated with the life insurance program. Actual budgeted amounts will be adjusted to reflect the number of participants including village and library staff.