Title
Amendment No. 1 to General Services Agreement No. AGR16-7288 with Dearborn Life Insurance Company, in the Amount of $63,400, 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. AGR16-7288 with Dearborn Life Insurance Company, in the amount of $63,400, 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. AGR16-7288 as requested.
Body
On October 9, 2015, the Council approved AGR16-7288 with Dearborn National Life Insurance Company for Basic Life, AD&D, and Voluntary Life Insurance for Los Alamos County. The initial term of the Agreement commenced on January 1, 2016 and continued through December 31, 2019 and allowed for three (3) additional one (1) year renewal periods. Amendment No. 1 to the original agreement, dated January 1, 2020 extends the term for the remaining three renewal periods allowable as provided for in the original agreement through December 31, 2022. Additionally, Amendment No. 1 recognizes the vendor name change from Dearborn National Life Insurance Company to Dearborn Life Insurance Company. The compensation for the initial term of the Agreement was approved at approximately SEVENTY-TWO THOUSAND FIVE HUNDRED SIXTY-EIGHT DOLLARS ($72,568.00). Through negotiations between the parties, the County will be able to continue offering the benefit with no rate increase for this final renewal. Currently regular and limited term employees have mandatory life insurance in the form of basic life and AD&D coverage. Each of these benefits provides coverage equivalent to the employee's annual salary, up to a maximum of $50,000. Employees are given the opportunity to buy additional coverage in the form of voluntary life insurance and voluntary AD&D coverage.
Alternatives
Should Council choose not to approve Amendment No. 1 to General Services Agreement No. AGR16-7288 with Dearborn National Life Insurance Company, possible alternatives would include directing staff to issue an RFP in order to procure the same or modified services or directing staff 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 AGR16-7288 was approved in the amount of $72,568. If approved, the compensation for this amendment will increase the total compensation under this agreement by $63,400 for a total of$136,000 for the initial term plus all renewals provided for in the Agreement. Funding for this agreement was included in the FY20 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 will be $21,000. 80% of this cost, or approximately $16,800, is paid by the County and 20%, or approximately $4,200, is paid by employees. The estimated annual cost of voluntary life insurance and voluntary AD&D is $183,200, all of which is paid by the employees who elect the coverage.
Attachments
A - AGR16-4288-A1 with Dearborn Life Insurance Company