6.3. ERMUSR 05-10-2007 - Laserfiche WebLink

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~/ Elk River ^-~ Municip al Utilitie s 13069 Orono Parkway Elk River, MN 55330 May 1, 2007 To: Elk River Municipal Utilities commission Jerry Takle Jim Tralle Jerry Gumphrey From: Theresa Slominski Subject: 2007 Dental, Life, &LTD Insurance hone: 763.441.2020 ~: 763.441.8099 Currently, our Dental, Life, and Long Term Disability insurance is all -with Principal Financial Group. Elk River Utilities switched from Delta dental to Principal dental in 2003, and combined it with the other products of Life and LTD insurance already placed with Principal. This year, we went out for bid with all these products to nine additional carriers. Assurant came back with the best proposal, and it was reviewed with the insurance task group. It represents a savings of $11,500 (split 75% / 25% with the employees for the dental only), with no change in benefits provided (with the exception of the item noted below), and maintaining the same dental network. I have attached a spreadsheet summarizing the cost savings, and a dental rate history summarization for the time period 2001-2006. One change that we discussed in the task group, and would like to include, is related to the LTD insurance. We have the option of recognizing a "taxable bonus" on this insurance with each pay period, which eliminates the payouts being taxed (if and when) they are distributed when one becomes disabled. The "bonus" amount is determined at $.72 for every $100 of payroll for the employee. It is included in the taxable calculation with each paycheck and reported on the W2s (very similar to the Group Term Life taxation.) A calculation is included at the bottom of the cost summary sheet attached. The group felt this was a worthy option to incorporate for the $.O1 in premium increase to the employer (or approximately $205.00 per year.) Staff recommends the Assurant proposal for Life, LTD, and Dental insurances.