Houston Life Insurance Plans - Basic & Voluntary Coverage for Employees and Retirees

1. City of Houstonbudget and FISCAL AFFAIRS COMMITTEEJULY 10, 2018 Basic and Voluntary Life Insurance Plans Briefing by Human Resources Department

2. OVERVIEW • The City of Houston offers Basic Life Insurance and Voluntary Life Insurance to Active employees and their eligible dependents. • A minimum Basic Life Insurance benefit is available to Retirees who pay a reduced premium for coverage. Dependents are not eligible for coverage after the employee retires. • The current Group Life Insurance contract expires September 30, 2018. • A new contract will be effective October 1, 2018. 2

3. BASIC LIFE INSURANCE COVERAGE • Basic Life Insurance is available on a non-contributory basis for eligible full-time employees. This benefit is 100% paid by the City. • The Basic Life benefit is one times (1x) annual base salary. • A small Basic Life benefit is included for eligible dependents: Spouse - $2,000 Benefit Child(ren) - $1,000 Benefit • An Occupational Death Benefit is included and provides a double indemnity payment for the Basic Life Insurance coverage. 3

4. VOLUNTARY LIFE INSURANCE COVERAGE • Voluntary Life Insurance premiums are 100% paid by employees who elect coverage. The coverage is offered in increments of 1x, 2x, 3x or 4x annual base salary. • New employees can elect coverage up to three times (3x) annual base salary, which can be obtained without Evidence of Insurability (EOI). If coverage for four times (4x) annual base salary is elected, an application for EOI must be submitted and approved to obtain the four times (4x) election amount. • Employees may elect Voluntary Life Coverage at anytime in any increment, but must submit an application for Evidence of Insurability to obtain any level of coverage that was not elected as a new hire. • If an employee elects coverage for Voluntary Life, a benefit is available to the employee’s eligible dependents: Spouse – 50% of Employee’s election up to $50,000 Benefit Child(ren) - $10,000 Benefit 4

5. RETIREE LIFE INSURANCE COVERAGE • Retirees who retired prior to October 1, 2013, were able to elect and maintain a Basic Life Insurance benefit of $5,000. • Retirees and Eligible Deferred Retirees who retired on or after October 1, 2013, may elect to retain a Basic Life Insurance benefit of $10,000. • Retirees and eligible Deferred Retirees who carried the $5,000 Basic Life Insurance Benefit, were offered the opportunity to upgrade to a $10,000 Basic Life Insurance Benefit which was effective January 1, 2017. This was a one-time offer. 5

6. PROCUREMENT PROCESS • RFP was released March 23, 2018. Responses were due April 26, 2018. • Six (6) vendors submitted proposals to provide and administer the life insurance plans. • The six vendors who proposed were: • Cigna • Dearborn National (Incumbent) • MetLife Insurance Company • Securian/Minnesota Life • The Standard Life Insurance Company • Sun Life Insurance Company 6

7. PROCUREMENT PROCESS CONT’D Criteria for evaluation of proposals: • The ability of the vendor to perform the Scope of Services requested in the RFP. • Financial competitiveness and guarantees against rate escalation over a multi-year contract. • The ability of the vendor to provide the best value for the dollars that the City of Houston and the employees will expend. • Ability to meet the required 1.25% proposed M/WBE Participation aligned with the project scope. • References. 7

8. RECOMMENDATION Approve: The recommended: • Basic Life Insurance Plan for active employees which is fully-funded by the City of Houston. • Voluntary Life Insurance Plans which are 100% paid by participating employees. • Retiree Life Insurance Plans which are 100% paid by participating retirees. 8