HomeMy WebLinkAboutIR 7106 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7106
"0"PTIAq,
0 To the Mayor and Members of the City Council April 1, 1986
0
Subject: New Optional Group Term Life Insurance Program for Employees
INTRODUCTION
The Aetna Life Insurance Company has updated the existing Optional Term Life Insurance
program for the City of Fort Worth. This updated program has substantially reduced the rate
per $1,000 of coverage for many of the plan's participants.
Under the current plan, the City provides employees with $10,000 of term life insurance with
the option to purchase an additional $10,000. Under the updated plan an employee may elect
insurance coverage in $10,000 increments up to three times his/her annual salary as a Term
Life Insurance benefit. The City will continue to provide $10,000 of term life insurance. There
will not be any additional cost to the city. The employee also will be able to include his or
her spouse and children in this program.
During the initial enrollment period, all eligible employees and eligible dependents will be
provided a Guaranteed Standard Issue Term policy. No health questions will be asked, and no
examinations will be required.
Another new feature allows employees to continue their insurance coverage after they terminate
employment or retire. The benefits and rates remain the same as the city's Optional Term
plan.
After the initial enrollment period, all employees who participate will be given an opportunity
to set up a fund to provide a more permanent form of coverage.
PROGRAM FRATURES
Term Coverages
The cost of term insurance will be funded entirely through employee contributions (i.e., no
employer contributions) based on a 5-year step rate schedule. Amounts of term insurance will
normally be expressed as a multiple of salary, and may be adjusted up or down to reflect an
individual's life insurance needs. Increases in the multiple may be subject to medical evidence.
There is no (per life) fee charged to employees for participating in the insurance program.
Dependents' Coverage
Optional life insurance may also be purchased for a spouse whether or not the employee purchases
insurance. Children's Term Insurance (a single rider covering all children) may be included on
either the employee's or the spouse's policy, but only will remain in force while insurance on
a parent is in force. However, in the event of the death of the insured parents, term insurance
on a premium pay basis can be continued on the children.
Accidental Death Insurance
Accidental Death Benefits is automatically part of the coverage. Under the plan, this coverage
is the same benefit as the Life insurance. A lump sum is payable for death caused by an accident.
The Plan provides 24-hour insurance protection. The death must occur within 90 days of the
accident.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7106 - p.2
MpRrf RfO
�a4four To the Mayor and Members of the City Council April 1, 1986
>eY Cl> Subject: New optional Group Term Life Insurance Program for Employees
to 73
SEMI-MONTHLY RATES FOR THE OPTIONAL LIFE AND AD&D PROGRAM
Semi-Monthly
Payroll Deduction
AKe Per $1,000 of Coverage
20 - 24 $ .06
25 - 29 .07
30 - 34 .07
35 - 39 .09
40 - 44 .13
45 - 49 .21
50 - 54 .32
55 - 59 .43
60 - 64 .84
65 - 69 1.12
1. These rates apply to the employee's coverage and to the spouse's coverage.
2. Children: $.50 semi-monthly for $10,000 of coverage regardless of the number of children.
Enrollment Period
Initial enrollment is occurring during the month of April. Future enrollment will be annually,
and at that time an employee or spouse may increase coverage, or an employee/spouse who
previously waived coverage may enroll with satisfactory evidence of insurability. The effective
date of the program is June 1, 1986.
Should the Council have any questions about this program, staff will provide additional
information upon request.
44:6( arz�, zy,4�,�
ouglas Harman
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS ---�