TITLE
The Mayor and Council shall discuss and possibly take action on approving a one year contract with Lincoln Financial, a Short Term Disability insurance provider for $52,000 and authorizing the City Manager to sign any necessary documentation related to this contract. Discussion and Action.
AGENDA ITEM DESCRIPTION
The City of Maricopa provides full-time employees a short term disability benefit at no cost. This benefit assists employees who need to be absent on extended medical leave, by providing 60% income replacement for up to 23 weeks. Employees use their accrued leave balances for the initial qualifying period, and to cover the difference between their base pay and the 60% benefit provided.
The City's contract with Lincoln Financial expired in December 2017. Premium quotes from Lincoln Financial and Mutual of Omaha were obtained by Arizona Metropolitan Trust. The premium quotes are based on the claims experience of the City, which over the last year has increased. As a result, the cost for maintaining the same short term disability benefit would increase from $50,000 per year to $72,000 per year.
The insurance providers were asked to provide a quote based on a change to the initial qualifying period. Currently the short term disability qualifying period is 15 calendar days. The City compared the cost of the current 15 calendar day qualifying period to a 21 calendar day qualifying period. This small change to the benefit plan, would reduce the increase in premium cost, to an annual cost of approximately $52,000, or approximatley a $3,000 increase.
The details of this benefit option were presented to the Personnel Benefits Subcommittee on January 18, 2018.
STAFF RECOMMENDATION
Staff recommends the selection of Lincoln Financial for our short term disability insurance provider with a change to a 21-day qualifying period and an annual premium of $52,000 and authorization of the City Manager to sign any necessary documents rel...
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