HomeMy WebLinkAboutHR18-161 - Original - CIGNA - Class 2 Group Long Term Disability Insurance Certificate #LK-965532 - 01/01/2018 i
Records Management Document
CONTRACT COVER SHEET
This is to be completed by the Contract Manager prior to submission
to the City Clerk's Office. All portions are to be completed.
If you have questions, please contact the City Clerk's Office at 253-856-5725.
® Blue/Motion Sheet Attached
® Pink Sheet Attached
Vendor Name: Cigna
Vendor Number (]DE):
Contract Number (City Clerk) Ti12�. ...l�lp �� ...
Category:'Contra c..t Agreement
Sub-Category (if applicable) gGhr,
Project Name:
Contract Execution Date: 1/1/18 Termination Date: 12/31/2020
Contract Manager: Laura Horea Department: HR
Contract Amount: $705.000
Approval Authority: ❑ Director ❑ Mayor ® City Council
Other Details:
Group Long Term Disability
Insurance Certificate
City of Kent
IMPORTANT NOTICES
If you reside in one of the following states, please read the important notices below:
Arizona,Florida and Maryland residents:
The group p ohey is issued roue the slaty of Washington and will be governed by its laws. If you
rarside in a state anther Man Washington, this certificate of insurance may not provide all of the
benefits and parotectimB provkled by the,laws of your state. PLEASE READ YOUR.
CERTIFICATE CAREFULLY.
FOREWORD
Disability insurance provides individuals and their families with financial protection. The Disability
Insurance Benefit described in this booklet will help secure your family's financial security in the event of
your disability.
The need for disability insurance protection depends on individual circumstances and financial situations.
This valuable coverage should add an extra dimension to your personal insurance portfolio.
In an effort to make your benefit program more comprehensive and responsive to your needs,your
Employer is providing this insurance to you at no cost.
LIFE INSURANCE COMPANY OF NORTH AMERICA
1601 CHESTNUT STREET GROUP INSURANCE
PHILADELPHIA, PA 1 9 192-2 23 5 CERTIFICATE
(800)732-1603 TDD(800)336-2485
A STOCK INSURANCE COMPANY
We,the LIFE INSURANCE COMPANY OF NORTH AMERICA, certify that we have issued a Group
Policy, LK-965532,to City of Kent.
We certify that we insure all eligible persons,who are enrolled according to the terms of the Policy. Your
coverage will begin and end according to the terms set forth in this certificate.
This certificate describes the benefits and basic provisions of your coverage. You should read it with care
so you will understand your coverage.
This is not the insurance contract. It does not waive or alter any of the terms of the Policy. If questions
arise, the Policy will govern. You may examine the Policy at the office of the Policyholder or the
Administrator.
r
This certificate replaces any and all certificates which may have been issued to you in the past under the
Policy.
MMatthew G. Manders, President
TL 004704 OIO v-G
TABLE OF CONTENTS
SCHEDULEOF BENEFITS........................................................................................................................I
WHO1S ELIGIBLE ----...---.... ................ ................ ........ ................. ........... ....-........3
WHENCOVERAGE BEGINS ....................................................................................................................3
WHENCOVERAGE ENDS ...........................................................................................................................3
WHENCOVERAGE CONTINUES,._........................................................................................................4
WHATIS COVERED...,,.--.......................................................................................................................6
WHATIS NOT COVERED.......................................................................................................................13
CLAIMPROVISIONS............................................................................................................................... 13
ADMINISTRATIVE PROVISIONS...........................................................................................................15
GENERAL PROVISIONS ...........................................................................................................................15
DEFINITIONS.. ............ ..... ............ ........................,.....16
DOMESTIC PARTNER/CIVIL UNION PARTNER RIDER...................................................................20
SCHEDULE OF BENEFITS
Policy Effective Date: January 1,2018
Policy Anniversary Date: January 1
Policy Number: LK-965532
Eligible Class Definition:
All active, Benefited Employees of the City of Kent regularly working the minimum required weekly
hours for their job subject to a minimum of 20 hours per week,and the elected Mayor currently in office,
excluding Members of the Kent Police Officers Association(KPOA).
Eligibility Waiting Period
If you were hired on or
before the Policy Effective Date: No Waiting Period
If you were hired after
the Policy Effective Date: No Waiting Period
Elimination Period 90 days
Gross Disability Benefit
The lesser of 66.67%of your monthly Covered Earnings rounded to the nearest dollar or your
Maximum Disability Benefit.
Maximum Disability Benefit $7,000 per month.
Minimum Disability Benefit The greater of$100 or 10%of your Monthly Benefit prior to any
reductions for Other Income Benefits.
Disability Benefit Calculation
The Disability Benefit payable to you is figured using the Gross Disability Benefit, Other Income
Benefits and the Return to Work Incentive. Monthly Benefits are based on a 30-day month. The
Disability Benefit will be prorated if payable for any period less than a month.
During any month you have no Disability Earnings, the monthly benefit payable is the Gross Disability
Benefit less Other Income Benefits. During any month you have Disability Earnings, benefits are
determined under the Return to Work Incentive. Benefits will not be less than the minimum benefit
shown in the Schedule of Benefits except as provided under the section Minimum Benefit.
"Other Income Benefits" means any benefits listed in the Other Income Benefits provision that you
receive on your own behalf or for your dependents, or which your dependents receive because of your
entitlement to Other Income Benefits.
Return to Work Incentive
During any month you have Disability Earnings,your benefits will be calculated as follows.
Your monthly benefit payable will be calculated as follows during the first 24 months disability
benefits are payable and you have Disability Earnings:
1, Add your Gross Disability Benefit and Disability Earnings.
2. Compare the sum from 1. to your htdexed Earnings.
3, If the sum from 1. exceeds 100%of your Indexed Earnings,then subtract the Indexed
Earnings from the sum in 1.
4. Your Gross Disability Benefit will be reduced by the difference from 3., as well as by
Other Income Benefits.
5. If the sum from 1. does not exceed 100%of your Indexed Earnings, your Gross
Disability Benefit will be reduced by Other Income Benefits.
After disability benefits are payable for 24 months, the monthly benefit payable is the Gross
Disability Benefit reduced by Other Income Benefits and 50% of Disability Earnings.
No Disability Benefits will be paid, and insurance will end if we determine you are able to work
under a modified work arrangement and you refuse to do so without Good Cause.
Maximum Benefit Period
t tiM,htn_&)isdaility [3uins Maximum Benefit Period
Age 62 or under Your 65th birthday or
the date the 42nd Monthly Benefit is payable, if later,
Age 63 The date the 36th Monthly Benefit is payable.
Age 64 The date the 30th Monthly Benefit is payable.
Age 65 The date the 24th Monthly Benefit is payable.
Age 66 The date the 21st Monthly Benefit is payable.
Age 67 The date the 18th Monthly Benefit is payable.
Age 68 The date the 15th Monthly Benefit is payable.
Age 69 or older The date the 12th Monthly Benefit is payable.
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2
WHO IS ELIGIBLE
If you qualify under the Class Definition shown in the Schedule of Benefits you are eligible for coverage
under the Policy on the Policy Effective Date, or the day after you complete the Eligibility Waiting
Period, if later. The Eligibility Waiting Period is the period of time you must be in Active Service to be
eligible for coverage. Your Eligibility Waiting Period will be extended by the number of days you are not
in Active Service.
Except as noted in the Reinstatement Provision, if you terminate your coverage and later wish to reapply,
or if you are a former Employee who is rehired,you must satisfy a new Eligibility Waiting Period. You
are not required to satisfy a new Eligibility Waiting Period if your insurance ends because you no longer
qualify under your Class Definition, but you continue to be employed, and within one year you qualify
again.
rLU04910
WHEN COVERAGE BEGINS
You will be insured on the date you become eligible, if you are not required to contribute to the cost of
this insurance.
If you are not in Active Service on the date your insurance would otherwise be effective,it will be
effective on the date you return to any occupation for your Employer on a Full-time basis.
I IA04l12
WHEN COVERAGE ENDS
Your coverage ends on the earliest of the following dates:
I, the date you are eligible for coverage under a plan intended to replace this coverage;
2. the date the Policy is terminated;
3. the date you are no longer in an eligible class;
4. the day after the end of the period for which premiums are paid;
5. the date you are no longer in Active Service;
6. the date benefits end because you did not comply with the terms and conditions of the insurance
coverage.
If you are entitled to receive Disability Benefits when the Policy terminates, Disability Benefits will be
payable to you if you remain disabled and meet the requirements for the insurance. Any later period of
Disability, regardless of cause, that begins when you are eligible under another disability coverage
provided by any employer, will not be covered.
11-007505 00
3
WHEN COVERAGE CONTINUES
This provision modifies the When Coverage Ends provision to allow insurance to continue under certain
circumstances if you are no longer in Active Service. Insurance that is continued under this provision is
subject to all other terms of the When Coverage Ends provisions.
Your Disability Insurance will continue if your Active Service ends because of a Disability for which
benefits under the Policy are or may become payable. Your premiums will be waived while Disability
Benefits are payable. If you do not return to Active Service, this insurance ends when your Disability
ends or when benefits are no longer payable,whichever occurs first.
If your Active Service ends due to an approved leave pursuant to the Family and Medical Leave Act
(FMLA), insurance will continue up to the later of the period of your approved FMLA leave or the leave
period required by law in the state in which you are employed. Premiums are required for this coverage.
Ityour Active Service ends due to any other leave of absence approved in writing by the Employer prior
to the date you cease work, insurance will continue for you for up to 12 months. Premiums are required
for this coverage. An approved leave of absence does not include Furlough, Temporary Layoff or
termination of employment.
If your Active Service ends due to Temporary Layoff, insurance will continue for you until the end of the
month in which the Temporary Layoff begins. Premiums are required for this coverage.
If your Active Service ends due to any other excused short term absence from work that is reported to the
Employer timely in accordance with the Employer's reporting requirements for such short term absence,
your insurance will continue until the earlier of:
a. the date your employment relationship with the Employer terminates;
b. the date premiums are not paid when due;
c. the end of the 30 day period that begins with the first day of such excused absence;
d. the end of the period for which such short term absence is excused by the Employer.
Notwithstanding any other provision of this policy, if your Active Service ends due to layoff,termination
of employment or any other termination of the employment relationship, insurance will terminate and
continuation of insurance under this provision will not apply.
If your insurance is continued pursuant to this When Coverage Continues provision, and you become
Disabled during such period of continuation, Disability Benefits will not begin until the later of the date
the Elimination Period is satisfied or the date you are scheduled to return to Active Service.
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TAKEOVER PROVISION
This provision applies to you only if you are eligible under this Policy and were covered for long tern
disability coverage on the day prior to the effective date of this Policy under the Prior Plan provided by
the Policyholder or by an entity that has been acquired by the Policyholder.
A. This section A applies to you if you are not in Active Service on the day prior to the effective date of
this Policy due to a reason for which the Prior Plan and this Policy both provide for continuation of
insurance. If required premium is paid when due, we will insure an Employee to which this section
applies against a disability that occurs after the effective date of this Policy for the affected employee
group. This coverage will be provided until the earlier of the date: (a)you return to Active Service,
(b)continuation of insurance under the Prior Plan world end but for termination of that plan; or(c)
the date continuation of insurance under this Policy would end if computed from the first day you
were not in Active Service. The Policy will provide this coverage as follows:
1. If benefits for a disability are covered under the Prior Plan,no benefits are payable under this
Plan.
2. If the disability is not a covered disability under the Prior Plan solely because the plan terminated,
benefits payable under this Policy for that disability will be the lesser of: (a)the disability benefits
that would have been payable under the Prior Plan; and(b)those provided by this Policy. Credit
will be given for partial completion under the Prior Plan of Elimination Periods and partial
satisfaction of pre-existing condition limitations.
B. The Elimination Period under this Policy will be waived for a Disability which begins while you are
insured under this Policy if all of the following conditions are met:
I. The Disability results from the same or related causes as a Disability for which monthly benefits
were payable under the Prior Plan;
2. Benefits are not payable for the Disability under the Prior Plan solely because it is not in effect;
3. An Elimination Period would not apply to the Disability if the Prior Plan had not ended;
4. The Disability begins within 6 months of your return to Active Service and your insurance under
this Policy is continuous from this Policy's Effective Date.
C. Except for any amount of benefit in excess of a Prior Plan's benefits,the Pre-existing Condition
Limitation will not apply if you were covered under a Prior Plan and satisfied the pre-existing
condition limitation, if any, under that plan. If you did not fully satisfy the pre-existing condition
limitation of that plan,credit will be given for any time that was satisfied under the Prior Plan's pre-
existing condition limitation.
Benefits will be determined based on the lesser o£ (1)the amount of the gross disability benefit tinder
the Prior Plan and any applicable maximums; and (2)those provided by this Policy.
If benefits are payable under the Prior Plan for the Disability, no benefits are payable under this
Policy.
T[A05108
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DESCRIPTION OF BENEFITS
WHAT IS COVERED
Disability Benefits
We will pay Disability Benefits if you become Disabled while covered under this Policy. You must
satisfy the Elimination Period, be under the Appropriate Care of a Physician, and meet all the other terms
and conditions of the Policy. You must provide to us, at your own expense,satisfactory proof of
Disability before benefits will be paid. The Disability Benefit is shown in the Schedule of Benefits.
We will require continued proof of your Disability for benefits to continue.
Elimination Period
The Elimination Period is the period of time you must be continuously Disabled before Disability
Benefits are payable. The Elimination Period is shown in the Schedule of Benefits.
A period of Disability is not continuous if separate periods of Disability result from unrelated causes.
Disability Benefit Calculation
The Disability Benefit Calculation is shown in the Schedule of Benefits. Monthly Disability Benefits are
based on a 30 day period. They will be prorated if payable for any period less than a month. If you are
working while Disabled,the Disability Benefit Calculation will be the Return to Work Incentive.
Return to Work Incentive
The Return to Work Incentive is shown in the Schedule of Benefits. You may work for wage or profit
while Disabled. In any month in which you work and a Disability Benefit is payable,the Return to Work
Incentive applies.
We will, from time to time, review your status and will require satisfactory proof of earnings and
continued Disability.
Minimum Benefit
We will pay the Minimum Benefit shown in the Schedule of Benefits despite any reductions made for
Other Income Benefits. The Minimum Benefit will not apply if benefits are being withheld to recover an
overpayment of benefits.
6
Other Income Benefits
If Disability Benefits are payable to you under this Policy,you may be eligible for benefits from Other
Income Benefits. If so,we may reduce the Disability Benefits by the amount of such Other Income
Benefits.
Other Income Benefits include:
I. any amounts received (or assumed to be received*) by you or your dependents Linder:
- the Canada and Quebec Pension Plans;
- the Railroad Retirement Act;
- any local, state, provincial or federal government disability or retirement plan or law
payable for Injury or Sickness provided as a result of employment with the Employer;
- any sick leave or salary continuation plan of the Employer;
- any work loss provision in mandatory "No-Fault" auto insurance.
2. any Social Security disability or retirement benefits you or any third party receive(or are
assumed to receive*)on your own behalf or for your dependents; or which your dependents
receive(or are assumed to receive*) because of your entitlement to such benefits.
3. any Retirement Plan benefits funded by the Employer. "Retirement Plan" means any defined
benefit or defined contribution plan sponsored or funded by the Employer. It does not include an
individual deferred compensation agreement; a profit sharing or any other retirement or savings
plan maintained in addition to a defined benefit or other defined contribution pension plan, or any
employee savings plan including a thrift, stock option or stock bonus plan, individual retirement
account or 401(k)plan.
4. any proceeds payable under any franchise or group insurance or similar plan. If other insurance
applies to the same claim for Disability, and contains the same or similar provision for reduction
because of other insurance, we will pay for our pro rata share of the total claim. "Pro rata share"
means the proportion of the total benefit that the amount payable under one policy, without other
insurance, bears to the total benefits under all such policies.
5. any amounts received(or assumed to be received*)by you or your dependents under any
workers'compensation,occupational disease, unemployment compensation law or similar state or
federal law payable for Injury or Sickness arising out of work with the Employer, including all
permanent and temporary disability benefits. This includes any damages, compromises or
settlement paid in place of such benefits,whether or not liability is admitted.
6. any amounts paid because of loss of earnings or earning capacity through settlement,judgment,
arbitration or otherwise,where a third party may be liable, regardless of whether liability is
determined.
Dependents include any person who receives(or is assumed to receive*)benefits under any applicable
law because of your entitlement to benefits.
*See the Assumed Receipt of Benefits provision.
Increases in Other Income Benefits
Any increase in Other Income Benefits during a period of Disability due to a cost of living adjustment
will not be considered in calculating your Disability Benefits after the first reduction is made for any
Other Income Benefits. This section does not apply to any cost of living adjustment for Disability
Earnings.
Lump Sum Pavmenls
Other Income Benefits or earnings paid in a lump sum will be prorated over the period for which the sum
is given. If no time is stated,the lump sum will be prorated over five years.
If no specific allocation of a lump sum payment is made,then the total payment will be an Other Income
Benefit.
7
Assumed Receipt of Benefits
We will assume you(and your dependents, if applicable)are receiving benefits for which you are eligible
from Other Income Benefits. We will reduce your Disability Benefits by the amount from Other Income
Benefits we estimate are payable to you and your dependents.
We will waive Assumed Receipt of Benefits, except for Disability Earnings for work you perform while
Disability Benefits are payable, if you:
1. provide satisfactory proof of application for Other Income Benefits;
2. sign a Reimbursement Agreement;
3. provide satisfactory proof that all appeals for Other Income Benefits have been made unless we
determine that further appeals are not likely to succeed; and
4. submit satisfactory proof that Other Income Benefits were denied.
We will not assume receipt of any pension or retirement benefits that are actuarially reduced according to
applicable law, until you actually receive them.
Social Security Assistance
We may help you in applying for Social Security Disability Income(SSDI) Benefits, and may require you
to file an appeal if we believe a reversal of a prior decision is possible.
We will reduce Disability Benefits by the amount we estimate you will receive, if you refuse to cooperate
with or participate in the Social Security Assistance Program.
Recovery of Overpayment
We have the right to recover any benefits we have overpaid. We may use any or all of the following to
recover an overpayment:
1. request a lump sum payment of the overpaid amount;
2. reduce any amounts payable under this Policy; and/or
3. take any appropriate collection activity available to us.
The Minimum Benefit amount will not apply when Disability Benefits are reduced in order to recover any
overpayment.
If an overpayment is due when you die, any benefits payable under the Policy will be reduced to recover
the overpayment.
Successive Periods of Disability
A separate period of Disability will be considered continuous:
1. if it results from the same or related causes as a prior Disability for which benefits were payable;
and
2. if, after receiving Disability Benefits,you return to work in your Regular Occupation for less than
6 consecutive months; and
3. if you earn less than the percentage of Indexed Earnings that would still qualify you to meet the
definition of Disability/Disabled during at least one month.
Any later period of Disability, regardless of cause,that begins when you are eligible for coverage under
another group disability plan provided by any employer will not be considered a continuous period of
Disability.
For any separate period of disability which is not considered continuous, you must satisfy a new
Elimination Period.
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LIMITATIONS
Limited Benefit Periods for Mental or Nervous Disorders
We will pay Disability Benefits on a limited basis during your lifetime for a Disability caused by, or
contributed to by, any one or more of the following conditions. Once 24 monthly Disability Benefits
have been paid, no further benefits will be payable for any of the following conditions.
I) Anxiety disorders
2) Delusional(paranoid)disorders
3) Depressive disorders
4) Eating disorders
5) Mental illness
6) Somatoform disorders (psychosomatic illness)
If, before reaching your lifetime maximum benefit,you are confined in a hospital for more than 14
consecutive days, that period of confinement will not count against your lifetime limit. The confinement
must be for the Appropriate Care of any of the conditions listed above.
Limited Benefit Periods for Alcoholism and Drug Addiction or Abuse
We will pay Disability Benefits on a limited basis during your lifetime for a Disability caused by, or
contributed to by, any one or more of the following conditions. Once 24 monthly Disability Benefits
have been paid,no further benefits will be payable for any of the following conditions.
I) Alcoholism
2) Drug addiction or abuse
If, before reaching your lifetime maximum benefit,you are confined in a hospital for more than 14
consecutive days, that period of confinement will not count against your lifetime limit. The confinement
must be for the Appropriate Care of any of the conditions listed above.
Pre-Existing Condition Limitation
We will not pay benefits for any period of Disability caused or contributed to by, or resulting from, a Pre-
existing Condition. A"Pre-existing Condition" means any Injury or Sickness for which you incurred
expenses, received medical treatment, care or services including diagnostic measures,took prescribed
drugs or medicines, or for which a reasonable person would have consulted a Physician within 3 months
before your most recent effective date of insurance.
The Pre-existing Condition Limitation will apply to any added benefits or increases in benefits. This
limitation will not apply to a period of Disability that begins after you are covered for at least 12 months
after your most recent effective date of insurance, or the effective date of any added or increased benefits.
11,007500 00
9
ADDITIONAL BENEFITS
Rehabilitation During a Period of Disability
Employee Benefit
If you are Disabled, you may be eligible to participate in a Rehabilitation Plan or may be participating in a
program that you desire to have approved by us as a Rehabilitation Plan. If you desire to participate in
rehabilitation efforts or to have your program approved by us as a Rehabilitation Plan, you may request
approval from us. We have the sole discretion to approve your participation in a Rehabilitation Plan and
to approve a program as a Rehabilitation Plan.
If, while you are Disabled,we determine that you arc a suitable candidate for rehabilitation,you may
participate in a Rehabilitation Plan. The terms and conditions of the Rehabilitation Plan must be mutually
agreed upon by you and its.
The Rehabilitation Plan may, at our discretion, allow For payment of your medical expense, education
expense, moving expense, accommodation expense or family care expense while you participate in the
program.
A"Rehabilitation Plan" is a written agreement between the Insured and the Insurance Company in which
we agree to provide, arrange or authorize vocational or physical rehabilitation services.
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Catastrophic Disability Benefit
Definitions
The definitions that follow apply to this benefit provision. They are in addition to those definitions in the
General Definitions section.
"Activities of Daily Living" are:
l. Bathing(i.e.,washing oneself in a shower or tub, including getting into or out of the tub or
shower, or washing oneself by sponge bath.)
2. Dressing oneself by putting on and taking off from one's own body all items of clothing and
needed braces,fasteners and artificial limbs.
3. Continence(i.e., the ability to maintain control one's own bowel and bladder function; or when
unable to maintain bowel or bladder function,the ability to perform associated hygiene, including
caring for a catheter or colostomy bag).
4. Toileting oneself by getting to and from the toilet, getting on and off the toilet,and performing
personal hygiene associated with toileting.
5. Feeding oneself by getting nourishment into the one's own body either from eating food that is
made available to you in receptacle such as a plate, cup or table, or by feeding oneself by a
feeding tube or intravenously.
6. Transferring(i.e.,the ability to get oneself into or out of a bed, a chair or wheelchair; or the
ability to move from place to place either by walking, use of a wheelchair, or some other means.
"Catastrophic Disability" means you are:
1. Unable to perform, without Substantial Assistance, at least two Activities of Daily Living, or
2. Have a severe Cognitive Impairment that requires Substantial Supervision to protect you or others
from threats to health and safety.
10
"Cognitive Impairment" means the loss or deterioration in intellectual capacity that meets these
requirements:
1. The loss or deterioration in intellectual capacity is comparable to and includes Alzheimer's
disease and similar forms of irreversible dementia;
2. The loss or deterioration in intellectual capacity is measured by clinical evidence and
standardized tests that reliably measure impairment in the individual's short-term and long-term
memory, orientation as to person,place, or time and deductive or abstract reasoning.
"Substantial Assistance" means the physical assistance of another person without which you would not be
able to perform an activity of daily living; or the constant presence of another person within arm's reach
that is necessary to prevent, by physical intervention,injury to you while you are performing an activity
of daily living.
"Substantial Supervision"means continual oversight that may include cueing by verbal prompting,
gestures, or other demonstrations by another person,and which is needed to protect you from threats to
health and safely.
Benefits Payable
Catastrophic Disability Benefits are payable when the Insurer determines that you have a Catastrophic
Disability that is due to the same sickness or injury for which Disability Benefits are payable under this
Policy.
The benefits are payable only while these conditions are met:
I. You are receiving monthly Disability Benefits under the Policy.
2. Your Catastrophic Disability lasted for at least the Elimination Period duration shown in the
Schedule of Benefits.
3. You submit, at your own expense, satisfactory proof of Catastrophic Disability to the Insurer,
when required by the Insurer.
Amount Payable
Benefits are payable monthly at the Catastrophic Disability Rate. The Catastrophic Disability Rate is an
amount equal to 13%of your monthly Covered Earnings to a maximum monthly benefit of$1,400. This
benefit will not be reduced by any other source of income.
For periods of less than one month, the Insurer will pay 1130"of the monthly benefit for Catastrophic
Disability for each day.
Termination (?Benefits
Catastrophic Disability Benefits end on the earliest to occur of:
1, the date your Catastrophic Disability ends.;
2. the date you are no longer receiving monthly disability benefits tinder the Policy;
3. the date you fail to submit proof of continuing Catastrophic Disability; or
4. the date you die.
5. the end of the Maximum Benefit Period shown in the Schedule of Benefits.
No survivor benefits are payable for the Catastrophic Disability Benefit.
'I L009895-I
Il
Conversion Privilege for Disability Insurance Benefits
If your insurance ends because employment with the Employer ends, or you are laid off or on an uninsured
leave of absence,you may be eligible for conversion insurance.
To be eligible,you must have been insured for Disability Benefits and actively at work for at least 12
straight months. You must apply for conversion insurance within 62 days after insurance under this Policy
ends or within 31 days of the date notice is given to apply for a converted policy or certificate,whichever is
later. In no event will the conversion period be extended beyond 105 days from the date insurance ends.
The benefits of the conversion plan will be those benefits offered at the time you apply. The premium will
be based on the rates in effect for conversion plans at that time.
Conversion insurance is not available if any of the following conditions apply:
1. you are retired or age 70 or older;
2. you are not in Active Service because of Disability;
3. the Policy is canceled for any reason;
4. you are no longer in a Class of Eligible Employees, but is still employed by the Employer.
Survivor Benefit
We will pay a Survivor Benefit if you die while Disability Benefits are payable to you for a continuous
period of Disability. The Survivor Benefit will equal 100% of the sum of the last full Disability Benefit
payable to you plus the amount of any Disability Earnings by which the benefit had been reduced for that
month. A single lump sum payment equal to 3 monthly Survivor Benefits will be payable.
We will pay the Survivor Benefit to your Spouse. If you do not have a Spouse, we will pay your
surviving Children in equal shares. if you do not have a Spouse or any Children, we will pay your estate.
"Spouse" means your lawful spouse. "Children" means your children underage 26 who are chiefly
dependent upon you for support and maintenance. The term includes a stepchild living with you at the
time of your death.
[LA05107
TERMINATION OF DISABILITY BENEFITS
Benefits will end on the earliest of the following dates:
1. the date we determine you are not Disabled;
2. the end of the Maximum Benefit Period;
3. the date you die;
4. the date you are no longer receiving Appropriate Care;
5. the date you fail to cooperate with us in the administration of the claim. Such cooperation
includes, but is not limited to, providing any information or documents needed to determine
whether benefits are payable or the actual benefit amount due.
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WHAT IS NOT COVERED
We will not pay any Disability Benefits for a Disability that results, directly or indirectly,from:
1. suicide,attempted suicide, or self-inflicted injury while sane or insane.
2. war or any act of war, whether or not declared.
3. active participation in a riot.
4. commission of a felony.
5. the revocation, restriction or non-renewal of your license, permit or certification necessary to
perform the duties of your occupation unless due solely to Injury or Sickness otherwise covered
by the Policy.
In addition, we will not pay Disability Benefits for any period of Disability during which you arc
incarcerated in a penal or corrections institution.
TLU09503 0�
CLAIM PROVISIONS
Notice of Claim
Written notice of claim, or notice by any other electronic/telephonic means authorized by us, must be
given to us within 31 days after a covered loss occurs or begins or as soon as reasonably possible. If
written notice, or notice by any other electronic/telephonic means authorized by us, is not given in that
time,the claim will not be invalidated or reduced if it is shown that notice was given as soon as was
reasonably possible. Notice can be given at our home office in Philadelphia, Pennsylvania or to our
agent. Notice should include the Employer's name, the Policy Number and the claimant's name and
address.
Claim Forms
When we receive notice of claim, we will send claim forms for filing proof of loss. If we do not send
claim forms within 15 days after notice is received by us,the proof requirements will be met by
submitting, within the time required under the"Proof of Loss" section,written proof, or proof by any
other electronic/telephonic means authorized by us, of the nature and extent of the loss.
Claimant Cooperation Provision
If you fail to cooperate with us in our administration of your claim, we may terminate the claim. Such
cooperation includes, but is not limited to, providing any information or documents needed to determine
whether benefits are payable or the actual benefit amount due.
Insurance Data
The Employer is required to cooperate with us in the review of claims and applications for coverage. Any
information we provide to the Employer in these areas is confidential and may not be used or released by
the Employer if not permitted by applicable privacy laws.
13
Proof of Loss
You must provide written proof of loss to us, or proof by any other electronic/telephonic means
authorized by us,within 90 days after the date of the loss for which a claim is made. if written proof of
loss, or proof by any other electronic/telephonic means authorized by us, is not given in that 90 day
period,the claim will not be invalidated nor reduced if it is shown that it was given as soon as was
reasonably possible. In any case,written proof of loss, or proof by any other electronicAelephonic means
authorized by us, must be given not more than one year after the 90 day period. If written proof of loss,
or proof by any other electronic/telephonic means authorized by us, is provided outside of these time
limits, the claim will be denied. These time limits will not apply due to lack of legal capacity.
Written proof that the loss continues, or proof by any other electronic/telephonic means authorized by us,
must be furnished to us at intervals we require. Within 30 days of a request, written proof of continued
Disability and Appropriate Care by a Physician must be given to us.
Time of Payment
Disability Benefits will be paid at regular intervals of not less frequently than once a month. Any
balance, unpaid at the end of any period for which we are liable, will be paid at that time.
To Whom Payable
Disability Benefits will be paid to you. If any person to whom benefits are payable is a minor or, in our
opinion is not able to give a valid receipt, such payment will be made to his or her legal guardian.
However, if no request for payment has been made by the legal guardian, we may, at our option, make
payment to the person or institution appearing to have assumed custody and support.
If you die while any Disability Benefits remain unpaid, we may, at our option, make direct payment to
any of your following living relatives: your spouse, your mother, your father, your children,your
brothers or sisters; or to the executors or administrators of your estate. We may reduce the amount
payable by any indebtedness due.
Payment in the manner described above will release us from all liability for any payment made.
Physical Examination and Autopsy
We may, at our expense, exercise the right to examine any person for whom a claim is pending as often as
we may reasonably require. Also,we may, at our expense, require an autopsy unless prohibited by law.
Legal Actions
No action at law or in equity may be brought to recover benefits tinder the Policy less than 60 days after
written proof of loss, or proof by any other electronic/telephonic means authorized by us, has been
furnished as required by the Policy. No such action shall be brought more than 3 years after the time
satisfactory proof of loss is required to be furnished.
Time Limitations
If any time limit stated in the Policy for giving notice of claim or proof of loss, or for bringing any action
at law or in equity, is less than that permitted by the law of the state in which you live when the Policy is
issued,then the time limit provided in the Policy is extended to agree with the minimum permitted by the
law of that state.
Physician/Patient Relationship
You have the right to choose any Physician who is practicing legally. We will in no way disturb the
Physician/patient relationship.
It,004714
14
ADMINISTRATIVE PROVISIONS
Premiums
The premiums for this Policy will be based on the rates currently in force,the plan and the amount of
insurance in effect.
Reinstatement of Insurance
Your insurance may be reinstated if it ends because you are on an unpaid leave of absence. If your Active
Service ended due to an approved leave pursuant to the Family and Medical Leave Act(FMLA)and
Continuation of Insurance is not applicable, your insurance may be reinstated at the conclusion of the
FMLA leave.
If your Active Service ends due to an Employer approved unpaid leave of absence, other than an
approved FMLA leave, insurance may be reinstated only:
1. If the reinstatement occurs within 12 weeks from the date insurance ends, or
2. When returning from military service pursuant to the Uniformed Services Employment Act of
1994 (USERRA).
For insurance to be reinstated the following conditions must be met:
1. You must be in a Class of Eligible Employees.
2. The required premium must be paid.
3. We must receive a written request for reinstatement within 31 days from the date you return to
Active Service.
Reinstated insurance will be effective on the date you return to Active Service. If you did not fully satisfy
the Eligibility Waiting Period or the Pre-Existing Condition Limitation(if any)before insurance ended
due to an unpaid leave of absence, credit will be given for any time that was satisfied.
GENERAL PROVISIONS
Incontestability
All statements made by the Employer or by an Insured are representations not warranties. No statement
wi II be used to deny or reduce benefits or as a defense to a claim, unless a copy of the instrument
containing the statement has been furnished to the claimant. In the event of death or legal incapacity, the
beneficiary or representative must receive the copy.
After two years from an Insured's effective date of insurance, or from the effective date of any added or
increased benefits, no such statement will cause insurance to be contested.
Misstatement of Age
If an Insured's age has been misstated,we will adjust all benefits to the amounts that would have been
purchased for the correct age.
Workers' Compensation Insurance
The Policy is not in lieu of and does not affect any requirements for insurance under any Workers'
Compensation Insurance Law.
15
Assignment of Benefits
We will not be affected by the assignment of your certificate until the original assignment or a certified
copy of the assignment is filed with us. We will not be responsible for the validity or sufficiency of an
assignment. An assignment of benefits will operate so long as the assignment remains in force provided
insurance under the Policy is in effect. This insurance may not be levied on, attached, garnisheed, or
otherwise taken for a person's debts. This prohibition does not apply where contrary to law.
Clerical Error
A person's insurance will not be affected by error or delay in keeping records of insurance under the
Policy. If such an error is found,the premium will be adjusted fairly.
Ownership of Records
All records maintained by the Insurance Company are, and shall remain, the property of the Insurance
Company.
'I L 004728(WA)
DEFINITIONS
Please note, certain words used in this document have specific meanings. These terms will be capitalized
throughout this document. The definition of any word, if not defined in the text where it is used,may be
found either in this Definitions section or in the Schedule of Benefits.
Active Service
If you are an Employee, you are in Active Service on a day which is one of the Employer's scheduled
work days if either of the following conditions are met.
I. You are performing your regular occupation for the Employer on a full-time basis. You must be
working at one of the Employer's usual places of business or at some location to which the
Employer's business requires you to travel.
2. The day is a scheduled holiday or vacation day and you were performing your regular occupation
on the preceding scheduled work day.
You are in Active Service on a day which is not one of the Employer's scheduled work days only if you
were in Active Service on the preceding scheduled work day.
Appropriate Care
Appropriate Care means you:
1. Have received treatment, care and advice from a Physician who is qualified and experienced in
the diagnosis and treatment of the conditions causing Disability. If the condition is of a nature or
severity that it is customarily treated by a recognized medical specialty,the Physician is a
practitioner in that specialty.
2. Continue to receive such treatment, care or advice as often as is required for treatment of the
conditions causing Disability.
3. Adhere to the treatment plan prescribed by the Physician, including the taking of medications.
Consumer Price Index (CPI-W)
The Consumer Price Index for Urban Wage Earners and Clerical Workers published by the U.S.
Department of Labor. If the index is discontinued or changed, another nationally published index that is
comparable to the CPI-W will be used.
16
Covered Earnings
Covered Earnings means your wage or salary as reported by the Employer for work performed for the
Employer as in effect just prior to the date your Disability begins. Covered Earnings are determined
initially on the date an Employee applies for coverage. A change in the amount of Covered Earnings is
effective on the first of the month following the change, if the Employer gives us written notice of the
change and the required premium is paid.
It does not include any amounts received as bonus, commissions, overtime pay or other extra
compensation.
Any increase in your Covered Earnings will not be effective during a period of continuous Disability.
Disability/Disabled
You are considered Disabled if,solely because of Injury or Sickness, you are:
1. unable to perform the material duties of your Regular Occupation; or
2. unable to earn 80% or more of your Indexed Earnings from working in your Regular Occupation.
After Disability Benefits have been payable for 24 months,you are considered Disabled if, solely due to
Injury or Sickness, you are:
1. unable to perform the material duties of any occupation for which you are, or may reasonably
become, qualified based on education,training or experience; or
2. unable to earn 80%or more of your Indexed Earnings.
We will require proof of earnings and continued Disability.
Disability Earnings
Any wage or salary for any work performed for any employer during your Disability, including
commissions, bonus, overtime pay or other extra compensation.
Employee
For eligibility purposes,you are an Employee if you work for the Employer and are in one of the"Classes
of Eligible Employees." Otherwise,you are an Employee if you are an employee of the Employer who is
insured under the Policy.
Employer
The Policyholder and any affiliates or subsidiaries covered under the Policy. The Employer is acting as
your agent for transactions relating to this insurance. You shall not consider any actions of the Employer
as actions of the Insurance Company.
Full-time
Full-time means the number of hours set by the Employer as a regular work day for Employees in your
eligibility class.
Furlough
Furlough means a temporary suspension or alteration of Active Service initiated by the Employer,for a
period of time specified in advance not to exceed 30 days at a time.
Good Cause
A medical reason preventing participation in the Rehabilitation Plan. Satisfactory proorof Good Cause
must be provided to us.
17
Indexed Earnings
For the first 12 months Monthly Benefits are payable,your Indexed Earnings are equal to your Covered
Earnings. After 12 Monthly Benefits are payable,your Indexed Earnings are your Covered Earnings plus
an increase applied on each anniversary of the date Monthly Benefits became payable. The amount of
each increase will be the lesser of:
I. 10%of your Indexed Earnings during your preceding year of Disability; or
2. the rate of increase in the Consumer Price Index(CPI-W)during the preceding calendar year.
Injury
Any accidental loss or bodily harm that results directly and independently from all other causes from an
Accident.
Insurability Requirement
An eligible person satisfies the Insurability Requirement for an amount of coverage on the day we agree
in writing to accept you as insured for that amount. To determine a person's acceptability for coverage,
we will require you to provide evidence of good health and may require it be provided at your expense.
Insurance Company
The Insurance Company underwriting the Policy is named on your certificate cover page. References to
the Insurance Company have been changed to "we", "our", "ours",and "us" throughout the certificate.
Insured
You are an Insured if you are eligible for insurance under the Policy, insurance is elected for you,the
required premium is paid and your coverage is in force under the Policy.
Physician
Physician means a licensed doctor practicing within the scope of his or her license and rendering care and
treatment to an Insured that is appropriate for the condition and locality. The term does not include you,
your spouse,your immediate family(including parents,children, siblings, or spouses of any of the
foregoing, whether the relationship derives from blood or marriage), or a person living in your household.
Prior Plan
The Prior Plan refers to the plan of insurance providing similar benefits to you, sponsored by the
Employer and in effect directly prior to the Policy Effective Date. A Prior Plan will include the plan of a
company in effect on the day prior to that company's addition to this Policy after the Policy Effective
Date.
Regular Occupation
The occupation you routinely perform at the time the Disability begins. In evaluating the Disability,we
will consider the duties of the occupation as it is normally performed in the general labor market in the
national economy. It is not work tasks that are performed for a specific employer or at a specific location.
Rehabilitation Plan
A written plan designed to enable you to return to work. The Rehabilitation Plan will consist of one or
more of the following phases:
1. rehabilitation, under which we may provide, arrange or authorize education, vocational or
physical rehabilitation or other appropriate services;
2 work, which may include modified work and work on a part-time basis.
18
Sickness
The tern Sickness means a physical or mental illness.
Temporary Layoff
Temporary Layoff means a temporary suspension of Active Service for a period of time determined in
advance by the Employer,other than a Furlough as defined. Temporary Layoff does not include the
permanent termination of Active Service(including but not limited to a job elimination), which shall be
treated as termination of employment.
'I'1 OWI SOO OU as modified by 11,-009980
19
AMENDATORY RIDER
DOMESTIC PARTNER/CIVIL UNION PARTNER COVERAGE
Policy No. LK-965532 Effective Date: January 1, 2018
This rider amends the Policy and Certificate to which it is attached. It is effective on the Effective Date
shown above, and expires when the Policy expires.
A. Domestic Partner/Civil Union Partner means any of the following:
I. A person with whom the Employee has a registered civil union or domestic partnership under
state law which imposes legal obligations on the parties substantially similar to marriage. Such
person will continue to be recognized as a Domestic Partner or Civil Union Partner unless and
until: (1)the civil union or domestic partnership is dissolved under applicable law; or(2)either
the Employee or the Domestic Partner/Civil Union Partner marries another person.
B. The Survivor Benefit is modified in the Policy and Certificate as follows:
1. All references to the term"Spouse" are replaced by "Spouse or Domestic Partner/Civil Union
Partner" except for the following references:
a. The first reference to"Spouse"in the Survivor Benefit text is changed to "Spouse, or
Domestic Partner/Civil Union Partner" if there is no Spouse".
b. The text pertaining to the definition of"Spouse" remains unchanged.
C. Survivor benefits will be payable as follows: (1)to the Employee's spouse or Domestic
Partner/Civil Union Partner; (2)if there is none, in equal shares to the Employee's surviving
Children; or(3)if there is none,to the Employee's estate.
D. A child of a Domestic Partner/Civil Union Partner may only be eligible for benefits if:
a. the child is primarily dependent on the Employee for financial support;
b. the Employee has a legal obligation of support of the child; or
c. the Employee is the child's legal guardian.
Except for the above this rider does not change the Policy or Certificate to which it is attached.
LIFE INSURANCE COMPANY OF NORTH AMERICA
Matthew G. Manders, President
TL-007153
20
IMPORTANT CHANGES FOR STATE REQUIREMENTS
If you reside in one of the following states, please read the important changes below. The provisions of
your certificate are modified for residents of the following states. The modifications listed apply only to
residents of that state, and only when the underlying provision is included in the certificate.
California residents:
If the Policy provides coverage/benefits to a Spouse, a Domestic Partner will be afforded the same
coverage/benefits provided to a Spouse.
1. Domestic Partner means any of the following:
A person with whom the Employee has a registered domestic partnership under state law which
imposes legal obligations on the parties substantially similar to marriage. Such person will
continue to be recognized as a Domestic Partner unless and until: (1)the domestic partnership is
dissolved under applicable law; or(,2) either the Employee or the Domestic Partner marries
another person.
2. All references in the policy to "Spouse" shall be changed to read "Spouse and Domestic Partner"
except as follows:
1. A Domestic Partner shall be deemed eligible to be enrolled for insurance or eligible for
Additional Benefits on the latest of:
a. the date of registration under Item 1 of the definition of Domestic Partner;
b. the date that the Employee is eligible for insurance under the Policy; or;
c. the effective date of the Rider.
3. The Spouse Rehabilitation Benefit and Survivor Benefit(if any) are modified in the Policy and
Certificate as follows:
1. All references to the term"Spouse" are replaced by "Spouse or Domestic Partner" except for
the following references:
a. The first reference to "Spouse"in the Survivor Benefit text is changed to "Spouse or
Domestic Partner" if there is no Spouse".
b. The text pertaining to the definition of"Spouse" remains unchanged
4. Survivor benefits(if any) will be payable as follows: (1)to the Employee's Spouse or Domestic
Partner; (2) if there is none, in equal shares to the Employee's surviving Children; or(3) if there
is none, to the Employee's estate.
5. A child of a Domestic Partner may only be eligible for benefits if:
a. the child is primarily dependent on the Employee for financial support;
b. the Employee has a legal obligation of support of the child; or
c. the Employee is the child's legal guardian.
Louisiana residents:
The percentage of Indexed Earnings, if any, that qualifies an insured to meet the definition of
Disability/Disabled may not be less than 80%.
21
Massachusetts residents:
Continuation of Insurance after leaving the group
If you leave the group covered under the Policy, insurance for you will be continued until the earliest of
the following dates:
1. 31 days from the date you leave the group;
2. The date you become eligible for similar benefits.
Continuation of Insurance due to a Plant Closing or Partial Closing
If you leave the group due to termination of employment resulting from a Plant Closing or Partial Closing,
insurance for you will be continued until the earliest of the following dates:
1. 90 days from the date of the Plant Closing or Partial Closing;
2. The date you become eligible for similar benefits.
Definitions : For purposes of this provision:
Plant Closing means a permanent cessation or reduction of business at a facility which results or will
result as determined by the director in the permanent separation of at least 90%of the employees of said
facility within a period of six months prior to the date of certification or with such other period as the
director shall prescribe,provided that such period shall fall within the six month period prior to the date of
certification.
Partial Closing means a permanent cessation of a major discrete portion of the business conducted at a
facility which results in the termination of a significant number of the employees of said facility and which
affects workers and communities in a manner similar to that of Plant Closings.
Minnesota residents:
The Pre-existing Condition Limitation, if any, may not be longer than 24 months from the insured's
most recent effective date of insurance.
Oregon residents:
If the Policy provides coverage/benefits to a Spouse, a Domestic Partner will be afforded the same
coverage/benefits provided to a Spouse.
1. Domestic Partner means any of the following:
A person with whom the Employee has a registered domestic partnership under state law which
imposes legal obligations on the parties substantially similar to marriage. Such person will
continue to be recognized as a Domestic Partner unless and until: (1)the domestic partnership is
dissolved under applicable law; or(2)either the Employee or the Domestic Partner marries
another person.
2. All references in the policy to"Spouse" shall be changed to read"Spouse and Domestic Partner"
except as follows:
1. A Domestic Partner shall be deemed eligible to be enrolled for insurance or eligible for
Additional Benefits on the latest of:
a. the date of registration under Item 1 of the definition of Domestic Partner;
b. the date that the Employee is eligible for insurance under the Policy; or
c. the effective date of the Rider.
22
3. The Spouse Rehabilitation Benefit and Survivor Benefit(if any)are modified in the Policy and
Certificate as follows:
1, All references to the term"Spouse" are replaced by"Spouse or Domestic Partner"except for
the following references:
a. The first reference to "Spouse" in the Survivor Benefit text is changed to "Spouse or
Domestic Partner" if there is no"Spouse".
b. The text pertaining to the definition of"Spouse"remains unchanged.
4. Survivor benefits (if any)will be payable as follows: (1)to the Employee's Spouse or Domestic
Partner; (2)if there is none, in equal shares to the Employee's surviving Children; or(3) if there
is none,to the Employee's estate.
5. A child of a Domestic Partner may only be eligible for benefits if:
a. the child is primarily dependent on the Employee for financial support;
b. the Employee has a legal obligation of support of the child; or
c. the Employee is the child's legal guardian.
Texas residents:
Any provision offsetting or otherwise reducing any benefit by an amount payable under an individual
or franchise policy will not apply.
23
UNDERWRITTEN BY:
LIFE INSURANCE COMPANY OF NORTH AMERICA
a Cigna company
Class 2
03/2018
Cigna.
�.✓� Jig � O T Agenda Item: Consent Calendar - 7H
TO: City Council
DATE: November 21, 2017
SUBJECT: Contract Renewals for Medical, Dental, Vision, Basic Life, Voluntary Life,
and Long Term Disability Insurance - Authorize
MOTION: Authorize the Mayor to approve renewal of the City's contracts
for medical, vision, and dental benefits with Premera, Vision Service Plan
(VSP), and Delta Dental for three years, and Kaiser Permanente (formerly
Group Health) for one year, and to approve switching from Standard
Insurance to Cigna for a new 3-year contract for Basic Life, Voluntary Life,
and Long Term Disability insurance, subject to approval of final terms and
conditions by the Human Resources Director and the City Attorney.
SUMMARY: The City of Kent contracts with Premera Blue Cross, Delta Dental of
Washington and Vision Service Plan, to be third party administrators to process
medical, dental, and vision claims, and provide access to their networks of doctors,
hospitals, dentists, optometrists and ophthalmologists. The City is self-insured for
these programs and wires funds to cover the weekly claims cost for medical,
prescription, dental, and vision expenses. The City also contracts with Kaiser
Permanente for the City's insured health maintenance organization. After conducting
separate request for proposal processes for each of these services, staff recommends
renewal of these contracts with the current vendors.
After holding a request for proposal process, and discussions with the City's
Healthcare Board, staff recommends a move from our current vendor for long-term
disability services and basic life, AD&D and voluntary life insurance to Cigna.
Although all core contract terms have been resolved with these providers, the City and
the providers are still in the process of winding up final contract language. These
vendors also have their own lengthy internal approval process, so authorization is
sought now to get approval for next year's budget cycle.
EXHIBITS: Memo to the Operations Committee
RECOMMENDED BY: Operations Committee
YEA: Boyce, Ralph, Thomas NAY: N/A
BUDGET IMPACTS: Premera - $1,345,000 for a three year contract; Delta Dental -
$165,330 for a three year contract; Vision Service Plan - $56,100 for a three year
contract; Kaiser Permanente - $420,000 for a one year contract; and Cigna -
$705,000 for a three year contract.
This page intentionally left blank.
�I
HUMAN RESOURCES DEPARTMENT
F4ENT Marty Fisher, Director
Phone: 253-856-5270
Fax: 253-856-6270
Address: 400 West Gowe
Kent, WA 98032-5895
DATE: November 7, 2017
TO: Operations Committee
FROM: Laura Horea, HR Benefits Manager
SUBJECT: Medical, Dental, Vision, Basic Life, Voluntary Life, and Long Term
Disability Insurance Vendor Contracts
SUMMARY: The Benefits Division of the Human Resources Department conducted
separate Request for Proposal processes for 1) Medical, dental, and vision
insurance, and 2) Basic Life and Accidental Death & Dismemberment (AD&D),
Voluntary Life and Long Term Disability insurance between April and August 2017.
All bids were reviewed by the Human Resources Director, the Benefits Manager,
and discussed with members of the City's Healthcare Board.
Medical, dental, and vision insurance bids were received from Premera, Aetna,
HMA, Regence, Kaiser Permanente (formerly Group Health), Delta Dental, and
Vision Service Plan (VSP). United Healthcare declined participation.
Our current providers, Premera, Delta Dental, and VSP are recommended to renew
for additional three-year contracts and Kaiser Permanente for a one-year renewal,
based on the strength of their plans, overall costs, customer service, discounts, and
overall administration and billing accuracy.
Basic Life and AD&D, Voluntary Life and Long Term Disability insurance bids were
received from our current vendor, Standard Insurance, and also from Cigna and
Mutual of Omaha.
The recommendation is to move from our current vendor, Standard Insurance, to
Cigna for long-term disability services, basic life insurance, AD&D, and employee
and dependent voluntary life insurance for the following reasons:
• Savings of approximately $100k per year in each of the three years of the
proposed new contract; and
• Increase in employee basic life insurance coverage from 1 x salary up to
$50,000 to 1 x salary up to $150,000.
Employees will have the opportunity to purchase additional voluntary life
insurance for themselves and their family members at a significantly lower
rate than is available through Standard.
Staff has received excellent feedback regarding Cigna from current customers
about their billing accuracy, systems, overall administration, and customer service.
Locally the City of Kirkland just moved to Cigna for these services.
All other contract features are identical to our current offering from Standard.
I
REQUEST FOR MAYOR'S SIGNATURE
*+ KtNT Print on Cherry-Colored Paper
Routing Information:
(ALL REQUESTS MUST FIRST BE ROUTED THROUGH THE LAW DEPARTMENT)
Approved by Director_
Originator: Laura Horea Phone (Originator): 253.856.5290
Date Sent: 4/16/18 Date Required: 4/19/18
Return Signed Document to: Laura Horea Contract Termination Date: 12/31/2020
VENDOR NAME: Date Finance Notified:
CIGNA (Only required on contracts 09/28/17
$20,000 and over or on any Grant)
DATE OF COUNCIL APPROVAL: 11/21/17 Date Risk Manager Notified:09/28/17
(Required on Non City Standard Contracts/Agreements)
Has this Document been Specificall Account Number:
Authorized in the Budget? YES NO
................a_
Brief Explanation of Document:
CIGNA contract - covers Basic Life, Basic AD&D, Voluntary Life and Long Term Disability
--
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