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HomeMy WebLinkAboutCity of Tamarac Resolution R-2006-1751 Temp. Reso. #11054 September 8, 2006 Page 1 CITY OF TAMARAC, FLORIDA RESOLUTION NO. R-2006- A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA, AUTHORIZING THE APPROPRIATE CITY OFFICIALS TO APPROVE THE RENEWAL OF LONG-TERM DISABILITY INSURANCE COVERAGE WITH UNUM AT THE PRESENT RATE THE CITY PAYS FOR INSURANCE COVERAGE FOR EMPLOYEES IN THE ELECTED, APPOINTED, EXECUTIVE, MANAGERIAL/PROFESSIONAL AND ADMINISTRATIVE CATEGORIES WHO PARTICIPATE IN EITHER THE CITY'S 401(A) RETIREMENT PLAN OR THE ELECTED AND APPOINTED OFFICERS AND NON - REPRESENTED EMPLOYEES RETIREMENT PLAN EFFECTIVE JANUARY 1, 2007; PROVIDING FOR THE CONTINUATION OF THE EXISTING COST ALLOCATION OF THE LONG-TERM DISABILITY INSURANCE PREMIUM BETWEEN THE CITY AND EMPLOYEES; PROVIDING FOR CONFLICTS; PROVIDING FOR SEVERABILITY; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the long-term disability insurance was awarded to UNUM effective January 1, 1998, renewing on January 1, 2007; and WHEREAS, the rates for long-term disability coverage will remain the same, at $.45 per $100 of covered payroll this renewal period, January 1, 2007 through December 31, 2007 as indicated in the letter from UNUM dated August 24, 2006 attached hereto as Exhibit #1; and Temp. Reso. #11054 September 8, 2006 Page 2 WHEREAS, the Human Resources Director recommends the renewal of the long-term disability insurance coverage with no increase in premium rates effective January 1, 2007 for employees in the Elected, Appointed, Executive, Managerial/Professional and Administrative categories who participate in either the City's 401(a) retirement plan or the Elected and Appointed Officers and Non - Represented Employees Retirement Plan; and WHEREAS, available funds exist in the appropriate funds which are in the approved FY2007 Budget; and WHEREAS, the City Commission has deemed it to be in the best interest of the citizens and residents of the City of Tamarac to provide long-term disability insurance benefits for the City employees. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA: SECTION 1: That the foregoing "WHEREAS" clauses are hereby ratified and confirmed as being true and correct and are hereby made a specific part of this Resolution. SECTION 2: That the appropriate City officials are hereby authorized to approve the renewal of UNUM as the City's carrier for long-term disability insurance coverage for City of Tamarac employees in the Elected, Appointed, Executive, Managerial/Professional and Administrative categories who participate in either the City's 401(a) retirement plan or the Elected and 1 1 1 Temp. Reso. #11054 September 8, 2006 Page 3 Appointed Officers and Non -Represented Employees Retirement Plan with no increase in premium rates effective January 1, 2007. SECTION 3: That the appropriate City officials are hereby authorized to continue the existing cost allocation of the long-term disability insurance premium between the City and the employees in the Elected, Appointed, Executive, Managerial/Professional and Administrative categories who participate in either the City's 401(a) retirement plan or the Elected and Appointed Officers and Non -Represented Employees Retirement Plan. SECTION 4: That all resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of such conflict. SECTION 5: That if any clause, section, or other part or application of this Resolution is held by any court of competent jurisdiction to be unconstitutional or invalid, in part or application, it shall not affect the validity of the remaining portions or applications of this Resolution. Temp. Reso. #11054 September 8, 2006 Page 4 SECTION 6: This Resolution shall become effective immediately upon adoption. PASSED, ADOPTED AND APPROVED this X*day of Septemb& , 2006. ATTEST: MARION SWEN ON, CIVIC CITY CLERK I HEREBY CERTIFY that I have approved this RESOLUTION as to form. AMUEL S.,q0REf CITY ATTORNEY BETH FLANSBAUM-TALABISCO MAYOR RECORD OF COMMISSION VOTE: MAYOR FLANSBAUM-TALABISCO DIST 1: V/M PORTNER NE DIST 2: COMM ATKINS-GRAD DIST 3: COMM. SULTANOF DIST 4: COMM. DRESSLER 1 1 UNUMPROVIDENT August 24, 2006 Nora Caries City of_Tamarac 7525 NW 88rh Avenue Tamarac, FL 33321 Re: Long Term Disability Policy/ 522899 Unum Life Insurance Cornpany of America Dear -Nora: 06 AUG 25 Pli 1 r 54 Thank you for choosing UnumProvident as your insurance provider. Byselecting coverage from UnumProvident, you are partnering withthe leader in income protection" - and with a companythat is dedicated to providing responsive service and reliable protection at an affordable price. We offer innovative plan designs as well as unparalleled employee support programs, and we have proven expertise in claimant care and absence management. We have evaluated claims trends and activity for companies of a similar size in your industry. Based on this information and on your company's specific claims experience during this renewal period, the cuxrent rates will remain inforce, effective 01/01/2007: LTD: .45/$100 .45/$100 01/01/2008 If you have any questions, you may contact me or your broker. In addition, I can help you review all the options available through our group voluntary and supplemental portfolio to enable you to craft a benefit plan that meets the needs of your total employee population while keeping costs low. Thank you for choosing UnumProvident as your benefits provider. We look forward to strengthening our partnership and continuing to serve your company's benefit needs. Regards, Mire Parker Group Sales Consultant UnumProvident Corporation cc: McKinley Financial Services "UnumProvident reptewnts the multiple insuring subsidiaries of UnumProvidem Corporation, including the N 1 group and individual income protection carriers in the United Stan, according to the JHA 2004 U.S. Group Disability Market Survey, 2005 and JHA 2004 U.S. Individual DisabilityMarket Survey, 2005. m 2005 UnurnProvident Corporation. ,All rights reserved. UnumProvident is the marketing brand of UnumProvident Corporation's insuring subsidiaries. NS05-561-Unum (10-05) UnumProvident Corporation . 1000 S. Pine Island Road; Suite 100, Plantation, FL 33324 954-916.6800 • Fax 954.916.6868 . www.unumprovidenr.com. The facts about: RATES how your group insurance rates are calculated At renewal tirne do we consider you a larger or smaller company? Smaller Long term disability and life insurance: less than 250 employees • Short term disability insurance: less than 75 employees; less than 50 for states with a disability benefits law Larger » Long term disability and life insurance: 250 or more employees • Short term disability insurance: 75 or more employees; 50 or more for states with a disability benefits law For questions about your rcire or how you can 177inintize increases, please contact your Uoumprovident representative, UnumProvident Corporation I Fountain Square Chattanooga, TN 37402 www.unumprovident. corn G-72173(3-06) UNUMPROVIDENT.� We know value and price are important when you make decisions about a carrier. That's why we want you to understand how our rates are calculated so you can make an informed choice. The basics of how your rate is calculated Our responsibility is to always make sure that the premiums you pay and the reserves we keep will support your employees' future claims. When we set your rate, we predict your claims experience based on probability and experience. Probability as a predictor for smaller companies If you're a smaller organization, we are likely to look more closely at probability. We analyze the claims experience of companies like yours — those in a similar industry with similar demographics, location and plan design. Grouping companies similar to yours together for pricing purposes is called pooling. Your company and the ones you're grouped with influence each other's rates at purchase and at renewal. Simply put, your rate reflects an average rate (often called the manual rate) for a company like yours, adjusted. as appropriate for characteristics unique to your company. However, unusually high claim activity during your review period can have an impact on your rate. The impact of actual claims experience for larger companies If your company is larger, we use your claims experience to help determine your rate. How much claims impact your rate depends on the size of your company, how long you've been inforce with us and the frequency of claims we expect from your group. This rate — based solely on your claims and premium history -- is called the experience rate. We combine information about your actual claims experience with the average rates (the manual rate) for companies in a similar industry who have similar plan designs, demographics and locations. This practice of combining what we know about your claims experience, the characteristics unique to your company, and the claims experience of similar companies helps us arrive at your rate. When your rate is calculated in this way, it is called the case rate. @2006 UnumProvident Corporation. All rights reserved. UnumProvident is the marketing brand of UnumProvident Corporation's insuring subsidiaries. Insurance products are underwritten and sold, and services provided, by the subsidiaries of UnumProvident Corporation. Not all companies do business in all jurisdictions. UNUMPROVIDENT.� What drives the COST of disability coverage? A variety of cost pressures have influenced the cost of disability income protection in the past several years. With the largest private disability database in the nation; U nurnProvi dent can track these pressures and workforce trends to help our sales partners and customers understand the impact on their bottom lime. Aging baby boomers increase claim incidence Our population is aging and employees are retiring later in life. As baby boomers age, the median age of U.S. employees continues to increase, resulting in increased disability costs and higher claims incidence.' • In 2000, 35% of Americans were age 45 or older. By 2010, the figure is expected to reach 39%.' • Claim cost increases significantly as workers get older, at an average rate of 4 to 8% per age each year.' Monthly LTD claim cost pet, age b u � O v %, C C O V Age 32 35 38 41 44 47 50 53 56 Source: UnumProvident LTD block, 2004. There is a direct correlation between interest rates and cost fluctuations Declines in interest rates reduce the returns of all new money invested, resulting in lower investment income and the need for higher reserves to meet policyholder obligations. Lower interest rates have a direct and significant impact on the cost of coverage. • Lower interest rates from 2001-2004 have reduced investment returns and driven costs upward by 10 to 12%.' • As a rule of thumb, a 1% reduction in the earned interest rate causes about a 4016 increase for long term disability (LTD) insurance premiums. Continuing lower interest rates (10 year treasury) 10•year constant maturity treasuries 7% 6% 50/u 4% 30/u I 12/99� 12100 12/01 12/02 12/03 Source. Federal Reserve Board- H15, 2004.