Title
Approval of Amendment No. 3 to Services Agreement No. AGR20-06, with Unum Life Insurance Company of America, in an Amount Not to Exceed $1,104,400, plus Applicable Gross Receipts Tax, for the Purpose of Providing Long Term Disability (LTD) Insurance Benefits to Eligible Los Alamos County Employees
Recommended Action
I move that Council approve Amendment No. 3 to Services Agreement No. AGR20-06 with Unum Life Insurance Company of America for Long Term Disability Benefits, in an amount not to exceed $1,104,400, to extend the provision of Long Term Disability Benefits to Los Alamos County employees for two additional years.
County Manager's Recommendation
The County Manager recommends that Council approve this Amendment as requested.
Body
The County's group insurance benefits plans, including Long Term Disability insurance, are renewed at the beginning of the calendar year. Currently, the County pays 50% of the premiums for all regular employees.
The County is requesting the approval of Amendment No. 3 to Services Agreement No. AGR20-06. If approved, this Amendment No. 3, extends the term of the Agreement for one (1) additional two (2) year period, at a rate of 0.33% of covered payroll.
On June 9, 2019, the County issued Request for Proposal ("RFP") 20-06 for Long Term Disability Insurance Benefits for Los Alamos County employees. The County received seven (7) responses to the RFP. Using the criteria established in the RFP, the response by Unum Life Insurance Company of America was found to be the most advantageous to the County. The resulting Services Agreement AGR20-06 with UNUM Life Insurance Company of America was subsequently approved by Council on October 29, 2019.The initial term of the Agreement commenced January 1, 2020, and continued through December 31, 2021. Amendment No. 1 was approved and became effective January 1, 2022, and extended the term through December 31, 2023, and reduced the rate charged from 0.42% of covered payroll to 0.32% of covered payroll. Amendment No. 2 was approved on October 17, 2023, and extended the term through December 31, 2024.
This, Amendment No. 3, extends the Agreement through December 31, 2026, under the existing terms, benefit design, and increases the rate charged from 0.32% of covered payroll to 0.33% percent of covered payroll.
Alternatives
Should Council choose not to approve Amendment No. 3 to General Services Agreement AGR20-06, with Unum Life, for Long Term Disability benefits for Los Alamos County employees, possible alternatives would include issuing an RFP for the same services or modifying the services, and issuing an RFP for those modified services, which could create a gap in services until such time a new contract is awarded, or discontinuing Long Term Disability coverage for Los Alamos County employees.
Fiscal and Staff Impact/Planned Item
Employee benefits are included in the County's biennial budget. The estimated total annual cost for Long Term Disability Insurance benefits, based on current enrollment, will be approximately $410,000.000 for FY25 and FY 26. County employees will pay approximately 50% of these costs and the County will pay approximately 50%. Provided that the County does not experience an extraordinary increase in enrollments, the current/anticipated budget for fiscal year 2025 is adequate to pay for the County's portion of Long Term Disability insurance benefits included in this contract
Attachments
A - AGR20-06 Amendment No. 3
B - AGR20-06 with Amendment Nos. 1 and 2