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Elk River <br />Municipal <br />ties <br />13069 Orono Parkway • P.O. Box 430 <br />Elk River, MN 55330-0430 <br />UTILITIES COA'IlbIISSION MEETING <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />TO: FROM: <br />Elk River Municipal Utilities Commission Theresa Slominski -Finance and Office <br />John Dietz -Chair Manager <br />Daryl Thompson -Vice Chair <br />Al Nadeau - Tmstee <br />MEETING DATE: AGENDA ITEM NUMBER: <br />October 11, 2011 5 lb <br />SUBJECT: <br />Review and Consider Insurance Options and Renewal <br />BACKGROUND: <br />Our broker has information on Long Term Care insurance that will be presented at our meeting. This is an <br />insurance that is an important component of retirement planning and yet often is not recognized unless <br />one has been involved with family members needing this care. <br />DISCUSSION: <br />Elk River Municipal Utilities desires to offer a Long Term Care (LTC) plan for our employees. A benefit <br />plan that does not include LTC insurance leaves the employees' life savings and quality of life at risk <br />from the high costs of care. A national figure we were provided with stated that LTC costs can average <br />$85,000 per year, and these costs are not covered by health insurance plans. By offering a base plan we <br />can help our employees and their families plan for a more secure future. AlI employees will be covered <br />under a "base plan" and if desired, may purchase additional coverage with their own funds. The base plan <br />insures all employees enroll with reduced underwriting. Reduced or "Simplified Underwriting" lessens <br />the risk that some employees may not be able to obtain the insurance. The plan is open to family <br />members on a voluntary basis. <br />FINANCIAL IMPACT: <br />The cost of a base plan varies from $1,039 to $1,539 per month, or $12,468 to $ 18,420 per year (the <br />monthly premium covers all eligible employees) The cost of offering an optional plan for employees to <br />join is $0 and needs a minimum of 10 employee participants to offer. It may be difficult to obtain the <br />minimum given our relatively small group of employees. <br />ACTION REQUESTED: <br />Management is requesting a decision to offer a LTC insurance benefit. If it is decided to offer such a <br />benefit, it needs to be determined if there will be a base plan offered or a strictly optional plan. (Our <br />recommendation is to offer a minimum base plan to insure reduced underwriting for all employees. Some <br />of our employees with health issues may not be able to obtain the coverage with reduced underwriting as <br />part of a group plan. <br />PewES~s sr <br />~A~u~~ <br />P O W E R E D T O S E R V E <br />