HomeMy WebLinkAboutAgenda - 09-21-2004-5fORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 21, 2004
Action Agenda
Item No.
SUBJECT: Employee Life Insurance for 2005
DEPARTMENT: Personnel
PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
INFORMATION CONTACT:
Elaine Holmes, Personnel Director
Extension 2550
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 336-227-2031
PURPOSE: To consider an increase in rates for employee grouup life insurance effective
January 1, 2005.
BACKGROUND: The County's employee group insurance program is a fully insured plan
through Group Insurance Services, Inc., a wholly owned subsidiary of Blue Cross and Blue
Shield of North Carolina. Group Insurance Services, Inc. is underwritten, by Medical Life
Insurance Company, Inc. Group Insurance Services provides Life Insurance, Dependent Life
Insurance, and Accidental Death and Dismemberment Insurance for the employees of Orange
County.
Permanent employees are insured for an amount equivalent to:
• Life Insurance -Annual Salary times one (rounded to the next higher $1,000) to a maximum
of $50,000
• Accidental Death and Dismemberment Insurance -Annual Salary times one (rounded to the
next higher $1,000) to a maximum of $50,000
In addition, an employee may purchase dependent life insurance that covers a spouse and
dependent children for $5,000 except a dependent child under six months of age is covered for
$500.
Following its annual review of the Orange County group and claims experience, Group
Insurance Services has proposed an approximate 12 percent rate increase effective January 1,
2005. Group Insurance Services advises that the increase arises from the changing
composition of the Orange County workforce and recent claims experience. In examining the
County's history with Group Insuurance Services, Inc. it was noted that the County has not had
an increase in its life insurance premiums in over 10 years,
2005 Life Insurance Rates
Group Insurance Services, Inc. has proposed monthly rates be modified as follows:
• An increase in the life insurance rate from 0.25 to 0.28 per $1,000 of annual salary (up to
$50,000).
• No change in the current Accidental Death and Dismemberment insurance rate of $0.05 per
$1,000 of annual salary (up to $50,000).
An increase in the dependent life insurance rate from 0.33 to 0.37 per $1,000 of
coverage or an increase in the total monthly employee cost for dependent coverage from
$1.65 to $1.85 per month,
County Contribution for Employee Life Insurance
The County pays the full cost of individual employee life and accidental death and
dismemberment insurance coverage. The employee pays the cost of any dependent life
insurance coverage elected.
FINANCIAL IMPACT: The County had budgeted about $101,000 far employee life insurance in
2004-05. The estimated cost of the increase for 2004-05 over the amount budgeted is about
$6,000, The Budget Director advises that the cost of the increase can be covered from savings
from the amount budgeted far dental insurance far 2004-05.
RECOMMENDATION(S): The Manager recommends that the Board approve the new life and
dependent life insurance rates as shown above under "2005 Life Insurance Rates" effective
January 1, 2005.