HomeMy WebLinkAbout5.F.9. Amendment to Life Insurance City of Shakopee
MEMORANDUM
CONSENT
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: Kris Wilson, Assistant City Administrator
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SUBJECT: Amendments to Life Insurance Contracts
DATE: July 2, 2010
Introduction
The Council is asked to authorize the appropriate officials to sign two amendments to the City's life
insurance policies.
Background
Last fall the City Council approved entering into a two -year contract with Madison National Life
Insurance to provide life insurance benefits for employees. For $4.25 per employee per month, the
City provides $25,000 in life insurance coverage for all benefits- eligible employees. Employees
who are married and/or have dependent children receive a smaller amount of coverage for those
individuals for an additional $1.00 per month. The City pays 100% of these monthly premiums for
employees.
After entering into these agreements two issues came to our attention:
1. As currently written, the policies provide a lower level of benefits for employees over the
age of 65. The City currently has 3 active, full -time employees in this category and staff
believes it is wrong to provide them with a lesser benefit based solely on their age. To
correct this situation and have the policies provide the full $25,000 in coverage for all
benefits- eligible employees, regardless of age, the City will need to sign Amendment #1.
This change in benefits increases the premium from 14 cents to 16 cents per $1,000 of
coverage. This amounts to $0.50 more per month per employee or approximately $750 per
year in additional cost for the City.
2. The second amendment is a simple clarification so that the insurance documents reflect
current practice. The original insurance documents indicate that the dependent life
insurance coverage is employee paid, when it is actually employer paid. The second
amendment, which will correct this error, has no cost impact.
Relationship to Vision
This is a housekeeping item (Goal F).
Requested Action
If the Council concurs, it is asked to offer a motion to authorize the appropriate officials to signs
Amendments #1 and #2 to the City's life insurance policies with Madison National Life.