COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Resources Department

DATE:

November 30, 2007

BOARD MEETING DATE:

December 18, 2007

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Donna Vaillancourt, Human Resources Director

Paul Hackleman, Benefits Manager

SUBJECT:

Agreement with Standard Life Insurance

RECOMMENDATION:

Approve a resolution authorizing the Human Resources Director to sign an agreement with Standard Life Insurance upon approval of the agreement by County Counsel for the provision of life insurance, supplemental life insurance and short-term disability benefits for County employees for the period from January 1, 2008 through December 31, 2010.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government.

Goal(s) 20 and 21: Government decisions are based on careful consideration of future impact rather than temporary relief of immediate gain; and County employees understand, support and integrate the County vision and goals into their delivery of services.

Performance Measure(s):

Measure

FY 2004-05
Actual

FY 2005-06
Projected

Percentage of employees enrolled in a life insurance program within 30 days of employment

98%

98%

Total percentage of enrolled employees in County life insurances

100%

100%

BACKGROUND:

The County pays for group life insurance benefits for County employees based on negotiated agreements. The County also offers supplemental life insurance and short-term disability benefit coverage to employees on an employee-paid basis.

The County frequently solicits proposals through a Request for Proposal (RFP) process because the key distinction between life insurance company benefits is the rate charged for the coverage.

DISCUSSION:

The County initiated a Request for Proposal (RFP) process in September, 2007 to provide all life insurance and short term disability benefits with no increase in the cost of coverage. We received five responses to the RFP. Standard Life Insurance was selected because they offered the lowest rates for basic and supplemental coverage and comparable rates for short-term disability coverage. They agreed to provide a three-year agreement without increase with the option to offer two additional years provided that utilization supported an extension of the agreement without additional costs.

Standard Life Insurance is being recommended because their proposal represented the most competitive response received by the County

FISCAL IMPACT:

The agreement results in an estimated $37,000 per year reduction of net County cost for the three term of the agreement. The change will also result in a $38,000 per year savings for employees purchasing supplemental life insurance. There will be no change in cost for the short-term disability benefit.

1.

General Description of RFP

The RFP solicited proposals for employer and employee paid life insurance coverage and disability coverage based on current benefits that are provided

2.

List key evaluation criteria

The key criterion was the cost of insurance in both the employer and employee paid life coverage and the total cost of disability coverage.

3.

Where advertised

Although not advertised, the Benefits Sourcebook which lists all companies providing certain types of benefits was used to determine which companies would propose on public sector life insurance.

4.

In addition to any advertisement, list others to whom RFP was sent

The RFP was sent to a total of 6 companies based on the Benefits Sourcebook.

5.

Total number sent to prospective proposers

The RFP was sent to a total of 6 companies. Mutual of Omaha declined to propose.

6.

Number of proposals received

A total of five proposals were received.

7.

Who evaluated the proposals

The Benefits Manager evaluated the proposals.

8.

In alphabetical order, names of proposers (or finalists, if applicable) and location

Fort Dearborn Life Insurance – Chicago, Ill.

Hartford Life Insurance – Simsbury Conn.

ING Life Insurance – Hartford, Conn.

Minnesota Life Insurance – St. Paul, Minn

Standard Life Insurance – Portland, Ore