Title
Approval of Amendment No. 1 to General Services Agreement No. AGR22-80 with Dearborn Life Insurance Company, in the Amount of $950,000, plus Applicable Gross Receipts Tax, for the Purpose of Providing Basic Life, AD&D, and Voluntary Life Insurance (Ancillary Benefits) to Los Alamos County Employees
Recommended Action
I move that Council approve Amendment No. 1 to General Services Agreement No. AGR22-80 with Dearborn Life Insurance Company, in the amount of $950,000, for the purpose of providing Basic Life, AD&D, and Voluntary Life, Insurance (Ancillary Benefits) to Los Alamos County Employees.
County Manager's Recommendation
The County Manager recommends that Council approve this Amendment No. 1 to General Services Agreement No. AGR22-80 as requested.
Body
Currently, the County offers Basic Life, Basic AD&D, and Voluntary Life and Voluntary AD&D benefits through Dearborn Life Insurance Company. In our current plan, Basic Life and Basic AD&D life insurance coverage is mandatory. The basic life insurance coverage equals the employee's annual salary, up to a maximum of $50,000. The Voluntary Life benefit is, as the name implies, voluntary and can be purchased in increments of $10,000 up to a total of $300,000.
On April 19, 2022, the County entered into Agreement No. AGR22-80 with Dearborn Life Insurance Company for Basic Life, AD&D, and Voluntary Life and AD&D Insurance for Los Alamos County. The initial term of the Agreement commenced on January 1, 2023 and continues through December 31, 2027, and includes three (3) additional one (1) year renewal periods. The compensation for the initial term of the Agreement was approved at approximately ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000.00), across all potential years.
Amendment No. 1 to the original agreement, dated January 28, 2026, increases the total not to exceed amount to NINE HUNDRED AND FIFTY THOUSAND DOLLARS ($950,000.00) to ensure that all amounts paid to the Contractor are properly accounted for, including, without limitation, pass-through charges paid on behalf of employees from voluntary life and AD&D insurance coverage. The pass-through charges are amounts paid to the Contractor and should be included in calculating applicable totals, limits, or obligations under the original Agreement.
Alternatives
Should Council choose not to approve Amendment No. 1 to General Services Agreement No. AGR22-80 with Dearborn National Life Insurance Company: possible alternatives include directing staff to issue an RFP to procure the same or modified services, or to terminate the existing contract and discontinue life insurance coverage for Los Alamos County employees.
Fiscal and Staff Impact/Planned Item
The compensation for the initial term of AGR22-80 was approved in the amount of $150,000. If approved, the compensation for this amendment will increase the total compensation under this agreement by $800,000 for a total of $950,000 for the initial term, plus all renewals provided for in the Agreement. Funding for this agreement was included in the FY26 County budget and is planned be included in future County budgets. The cost for the mandatory Basic Life and Basic AD&D coverage is allocated by employee and included in the Employee Benefits line item for each department. The estimated total annual cost of mandatory basic life and AD&D insurance is $25,000. 80% of this cost, or approximately $20,000, is paid by the County, and 20%, or approximately $5,000, is paid by employees. The estimated annual cost of voluntary Life and AD&D insurance is $225,000, all of which is paid by employees who elect coverage.
Attachments
A - AGR22-80 Amendment No. 1
B - AGR22-80 Dearborn Life Insurance Company