96-22095 RESO
RESOLUTION NO.
96-22095
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, EXTENDING THE BASIC
AND SUPPLEMENTAL LIFE INSURANCE PLANS; ACCIDENTAL
DEATH & DISMEMBERMENT PLAN; AND RETIREES'
SUPPLEMENTAL LIFE INSURANCE PLAN WITH ITT HARTFORD
LIFE INSURANCE COMPANIES FOR FISCAL YEAR 1996/97.
WHEREAS, Invitation to Bid No. 95-93/98 was awarded to ITT Hartford Life Insurance
Companies for a one-year period on July 27, 1994, with the option to renew for up to four (4)
additional one-year periods; and
WHEREAS, ITT Hartford presented the Administration and the Group Insurance Board with
an initial 9.9% rate increase for the Basic Life Insurance Plan and 0% rate change for the
Supplemental Life Insurance Plan, Accidental Death and Dismemberment Plan and Retirees'
Supplemental Life Insurance Plan, with a two (2) year rate guarantee; and
WHEREAS, through further negotiations, ITT Hartford proposed increasing the guarantee
rate period from two (2) years to three (3) years; and
WHEREAS, ITT Hartford re-evaluated the claims experience and proposed either a 0% rate
change for all coverages, with a three (3) year rate guarantee, or a 5% rate reduction for all
coverages, with a two (2) year rate guarantee; and
WHEREAS, ITT Hartford's proposed cost increases have been evaluated by the
Administration, Health Advisory Committee and the Group Insurance Board and were found to be
reasonable; and
WHEREAS, the Administration, Group Insurance Board, and Health Advisory Committee
would herein recommend the extension for a third one-year period commencing October 1, 1996,
with a 5% rate reduction for the Basic and Supplemental Life Insurance Plans; Accidental Death
and Dismemberment Plan; and Retirees' Supplemental Life Insurance Plan, with a two (2) year rate
guarantee.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and the City
Commission hereby extend the Basic and Supplemental Life Insurance Plans; the Accidental Death
& Dismemberment Plan; and the Retirees' Supplemental Life Insurance Plan with ITT Hartford Life
Insurance Companies for Fiscal Year 1996/97.
ADOPTED this 11 th day of September
,1996.
ATTEST:
\<6 h} -PAA-~
CITY CLERK
njHM APPROV~:.u
By ~~_
['de 1;/~:b
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CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
CITY OF MIAMI BEACH
COMMISSION MEMORANDUM NO. ~
TO:
Mayor Seymour Gelber and
Memben of the City Commission
DATE: September 11, 1996
FROM:
Jose Garcia_pedrost!
City Manager
RESOLUTION PPROVING THE EXTENSION OF GROUP BASIC AND
SUPPLEMENTAL LIFE INSURANCE PLANS; ACCIDENTAL DEATH &
DISMEMBERMENT PLAN; AND RETIREES' SUPPLEMENTAL LIFE INSURANCE
PLAN WITH ITT HARTFORD LIFE INSURANCE COMPANIES FOR FISCAL
YEAR 1996/97
SUBJECT:
ADMINISTRATION RECOMMENDATION:
The Administration recommends that the Mayor and City Commission approve the resolution
authorizing the extension for a third one-year period of the existing Invitation to Bid No. 95-93/98
with ITT Hartford Life Insurance Companies for Fiscal Year 1996/97 with a 5% rate reduction for
the Basic and Supplemental Life Insurance Plans; Accidental Death & Dismemberment Plan; and
Retirees' Supplemental Life Insurance Plan.
BACKGROUND:
Invitation to Bid No. 95-93/98 was awarded to ITT Hartford Life Insurance Companies for a one-
year period on July 27, 1994, with the option to renew for up to four additional one-year periods.
ITT Hartford's bid response offered a two year rate guarantee for the Basic and Supplemental Life
Insurance Plans; Accidental Death & Dismemberment Plan; and the Retirees Supplemental Life
Insurance Plan. Therefore, the rates for Fiscal Year 1995/96 were the same rates as for Fiscal
Year 1994/95 for Basic and Supplemental Life Insurance Plans and the Accidental Death &
Dismemberment Plan.
The Group Insurance Board is comprised of the presidents of the American Federation of State,
County and Municipal Employees (AFSCME) and the Communications Workers of America (CWA),
a retiree representative, and three Administrative representatives as well as the Human Resources
Director. The Health Advisory Committee is a 13-member City Committee comprised of individuals
from the community who are involved with the health industry.
ANALYSIS:
On June 18, 1996, ITT Hartford proposed a 9.9% rate increase for the Basic Life Insurance and
a 0% rate change for the Supplemental Life Insurance Plan, Accidental Death & Dismemberment
Plan and Retirees' Supplemental Plan, with a two (2) year rate guarantee.
1
AGENDA ITEM
l___ I I
DATE~
After further negotiations with the Group Insurance Board, ITT Hartford increased the rate
guarantee from two (2) years to three (3) years.
ITT Hartford re-evaluated the claims experience and proposed either a 0% rate change for all
coverages with a three (3) year rate guarantee, or a 5% rate reduction for all the coverages with
a two (2) year rate guarantee. ITT Hartford's proposed cost increases were evaluated by the City
Administration, Group Insurance Boarq, and Health Advisory Committee and were found to be
reasonable.
On July 15, 1996, the Health Advisory Committee, Group Insurance Boar~and City Administration
recommended approving the third one-Yl3ar option renewal period, with a 5% rate reduction on the
Basic and Supplemental Life Insurance Plans; Accidental Death & Dismemberment Plan; and
Retirees' Supplemental Plan, with a two (2) year rate guarantee.
CONTRACT AMOUNT AND FUNDING:
$288,145 Cost in Fiscal Year 1995/96 for the Group Basic Life and
Supplemental Life Insurance Plans; Accidental Death &
Dismemberment Plan; and Retirees' Supplemental Plan.
($20,145)
Estimated cost decrease for Fiscal Year 1996/97, based on the 5%
rate reduction for the Basic and Supplemental Life Insurance Plans;
Accidental Death & Dismemberment Plan; and Retirees'
Supplemental Plans at the currently enrolled participation levels.
$268,000
Estimated annual cost to be shared equally between City and
Employee/Retiree contributions for the Basic Life Insurance Plan.
The Accidental Death & Dismemberment Plan is fully paid by the
City. However, the City does not contribute towards the
Supplemental Life Insurance Plan and the Retirees' Supplemental
Life Insurance Plan.
CONCLUSION:
The Administration recommends that the Mayor and City Commission approve the attached
resolution extending the contract between the City of Miami Beach and ITT Hartford Insurance
Companies, for a one-year period commencing October 1, 1996.
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