TRANSMITTAL LETTER FOR BOARD MEETING OF JUNE 20, 2019
COMMITTEE ON PROCUREMENT
Mr. Brian A. Perkovich, Executive Director
Title
Issue purchase order and enter into an agreement with Metropolitan Life Insurance Company to provide group term life insurance for employees for a three-year period, in an amount not to exceed $213,000.00, Account 101-25000-601250, 501-50000-601250, Requisition 1516421
Body
Dear Sir:
At the Board Meeting of December 21, 2017, in accordance with Contract 17-RFP-32, the Board of Commissioners awarded a purchase order to Mesirow Insurance Services, Inc. (Mesirow) to serve as the District's broker-of-record for a three-year period from 2018 through 2020. In this capacity, Mesirow has responsibility for securing quotes from the insurance market for specified insurance policies, including life insurance coverage, and presenting the quotes from qualified carriers to the Human Resources Department for review and for recommendation of a selected carrier to the Director of Procurement and Materials Management. The premium for the life insurance coverage is paid directly to the insurance carrier. The current coverage will expire on July 31, 2019.
The life insurance program offered by the District includes $20,000.00 basic term life insurance coverage for each employee. The cost of this coverage is paid by the District. Employees are also provided an opportunity to purchase additional coverage up to a maximum of $250,000.00. Optional spouse coverage of $5,000.00 or $10,000.00 and dependent coverage of $2,500.00 or $5,000.00 are also available. These additional coverages are voluntary and are paid by the employee.
On May 17, 2019, the District received the bid quotations which Mesirow had solicited pursuant to the detailed specifications for the group term life insurance coverage. Eight (8) carriers were approached for quotations and five (5) quotes were received. Although the request was for a three-year contract period, several of the carriers, including the incumbent, proposed only a two-year policy. As such, the financials below reflect proposed rates over a two-year period to allow for comparison.
Dearborn National - $70,370.00 (Basic), $1,521,768.00 (Optional), $1,592,138.00 (Total)
Hartford - $158,332.00 (Basic), $1,401,048.00 (Optional), $1,559,380.00 (Total)
MetLife - $149,536.00 (Basic), $1,401,048.00 (Optional), $1,550,584.00 (Total)
Prudential - $68,611.00 (Basic), $1,582,682.00 (Optional), $1,651,293.00 (Total)
Unum Group- $158,332.00 (Basic), $1,401,048.00 (Optional), $1,559,380.00 (Total)
The quotations/responses were evaluated by Mesirow and representatives from the Human Resources Department. Based on the review, it was determined that the District should place this coverage with Metropolitan Life Insurance Company (MetLife). The company is licensed to do business in Illinois and complied with the terms and conditions of the bid specifications. The company’s A.M. Best Company rating is A+. The proposal submitted by MetLife offers approximately a 10.5% cost savings for the basic life insurance coverage paid by the District and maintains the current rates for the optional and dependent life insurance coverage paid by employees. MetLife guaranteed these rates for a 36-month term and is providing a one-time transition credit of approximately $18,000.00.
Appendix A and Appendix V are not included in this contract.
In view of the foregoing, it is recommended that the Director of Procurement and Materials Management be authorized to issue a purchase order to MetLife in an amount not to exceed $213,000.00.
The estimated expenditure for 2019 is $20,500.00. Funds for 2019 are available in Account 101-25000-601250 and 501-50000-601250. The estimated expenditures for 2020, 2021 and 2022 are $77,000.00, $77,000.00 and $38,500.00 respectively. Funds for 2020, 2021 and 2022 are contingent upon the Board of Commissioners’ approval of the District’s budget for those years.
Requested, Beverly K. Sanders, Director of Human Resources
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for June 20, 2019