Special Notice / Hearing: None
Vote Required: Majority
To: Honorable Board of Supervisors
From: Rocio Kiryczun, Human Resources Director
Kim Pearson, Benefits Manager
Subject: Agreement with The Standard for Life and Disability Insurance
RECOMMENDATION:
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Adopt a resolution authorizing:
A) A three-year agreement with The Standard for the purpose of providing life insurance, accidental death and dismemberment, and disability benefits for the period of January 1, 2025 to December 31, 2027 with the aggregate County cost not to exceed $150,000 each year; and
B) The Director of Human Resources to execute contract amendments which modify the County's maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.
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BACKGROUND:
The County provides benefited employees with employer-paid Basic Life Insurance coverage and Accidental Death and Dismemberment (AD&D) benefits based on applicable negotiated Memorandum of Understanding and Board Resolutions. Basic Life Insurance provides employees with financial support by promising to pay a benefit in the event of an employee’s death. AD&D insurance helps provide additional financial protection for employees and their families in the event of a covered accidental death or injury. 5,662 employees are currently enrolled in the Basic Life Insurance and AD&D plans.
Employees also have the option of buying Additional Life Insurance Coverage for themselves, their spouse or domestic partner, and dependents, at their own expense. 2,607 employees are currently enrolled in Additional Life Insurance and 1,535 employees are enrolled in Additional Spouse or Dependent Life Insurance.
The Standard provides a basic short-term disability insurance plan for newly benefited employees during their first seven months of employment and an optional voluntary short-term disability insurance for represented employees who do not qualify for the State Disability Insurance (SDI) program through the Employment Development Department (EDD). This employee-paid benefit can provide up to $100 per week for those who experience a disability that hinders their ability to work. Currently, there are 350 employees enrolled in the Basic seven month plan, while 185 employees have opted to enroll in the voluntary plan.
|
|
Basic Life Insurance |
AD&D |
Additional Life Insurance |
Basic Disability Insurance |
|
Employee Benefit |
$9,000 to $50,000 (based on MOU/Resolution) |
$10,000 to $110,000 |
$50,000 to $1,000,000 (at employees’ selection) |
$100 |
|
Spouse Benefit |
$2,000 |
N/A |
Up to $250,000 |
N/A |
|
Dependent Benefit |
$2,000 |
N/A |
$10,000 |
N/A |
|
Cost |
Employer Paid |
Employer Paid |
Employee Paid |
Employee Paid |
DISCUSSION:
The Standard has provided the County’s basic life, additional life, AD&D, and basic short-term disability insurance plans since 2000.
In 2024, the Benefits Labor Management Committee conducted a Request for Proposals (RFP) to solicit proposals from insurance carriers that could meet the County’s current life insurance plan designs at a competitive cost with the highest level of customer service. Five proposals were received, and the Committee agreed to interview three finalists: The Standard, Lincoln, and New York Life. The primary factors the Committee considered during the interview process were customer satisfaction results and cost of the plan. In addition, the Committee increased the plan design to offer additional life insurance up to $1,000,000 (from the current $750,000) and offering a guaranteed issue amount of $350,000 for all eligible employees (from the current $250,000).
After evaluation, the Committee decided to stay with the incumbent The Standard because it offered favorable pricing that will result in a cost savings of 25.13 percent for the County and 10 percent for the employees opting in to additional coverage, with a rate guarantee of three years. The Standard has been a collaborative partner for the County of San Mateo for many years and has demonstrated reliable customer service.
County Attorney has reviewed and approved the Resolution and Agreement as to form.
PERFORMANCE MEASURE:
|
|
2025 Estimate |
2026 Estimate |
2027 Estimate |
|
Calls to Standard’s Customer Service Department are answered within 30 seconds |
90% |
90% |
90% |
FISCAL IMPACT:
The County’s projected employer cost is expected to be less than $150,000 per year. The total cost is based on the number of benefited employees and their dependents.
The costs for the other insurance products offered (Additional Life Insurance and Basic Disability Insurance) are paid entirely by the employees who voluntarily opt-in to coverage. Based on current enrollment numbers and including the 10 percent rate reduction obtained as a result of the RFP, these employees’ projected cost is $1,100,000 per year.