Item C24Bulk1tem: Yes X No Department: Workers' Compensation
AGENDA rr1EM WORDING: Approval to accept proposal from Arthur J.
Accidental Death ::. Dismemberment Coverage(Fl• 1) for Firefighters with Hartford
'Gallagher
Life and Accident Insurance Company at cost of $7,911.00 for a two year premium, with staff si * g
the necessary forms.
BACKGROUND:
rMM 1993 he Florida Legislatureenacted
firefighters that are killed in the line of duty to benefits that are paid in addition to workers'
compensation benefits.
tZE;7-1414S JUAILLN",411"T BOCC ACTION: Current policy expires 09-30-2014. Annual premitin
was • 11.
CONTRACT/AGREEMIENT CHANGES: Two year premium provides 3 4% cost reduction saving
of 'i r l'
• • r r ►' • # 2N.119.0116.4 11A I' A 11'"', 1,1111111 1 � =$; III : — I
awl
TOTAL COST: $7.911.00 MIRECT COST: BUDGETED: Yes
COST TO COUNTY:-&7.-911.00 SOURCEOFFUNDS: internal Service Fund/PrimofflyAd
REVENUE PRODUCING: • #
NTH Year
O�B/Pulasing — Risk Management
DOCUMENTATION: Included Not Required,
1 # AGENDA
CONTRACTContract with: Hartford Life and Contract #
Expiration i:' 191 1 •
Contract PurposelDescription:
Accidental Death & Dismemberment insurance coverage for Firefighters in accordance
with Florida Statute 112.91 to provide entitled firefighters that are IdUed. in the line of
duty to benefits that are paid in addition to workers' compensation benefits.
Contract Manager: Meri-de J. Mercado X4451 Employee Services/WC
for BOCC meeting on 09-17-2014 Agenda Deadline: 09-02-2014
CONTRACT COSTS
Total Dollar Value of Contract: $ 7,911.00 Current Year Portion: $
Budgeted? Yes® No ❑ Account Codes: 501-07502-530450- -
Grant: $ -
County Match: $ - - -
Estimated Ongoing Costs: $ /yr
(Not included in dollar value above)
Date In
Division Director
Risk Management
• .
ADDITIONAL COSTS
For.
Changes
Need 'ewer
Yes[]No[�]
Yes❑ NoB f
Yes o[j
7,911.00
0
County Attorney r r zo 1 lesEl Nog,
— Z
Comments:
Consultants
Risk Management
Employee Benefits
August 28, 2014
Ms. Meri-De J. Mercado
Workers' Compensation Administrator
Monroe County Board of County Commissioners
1100 Simonton Street, Suite 2-268
Key West, Florida 33040
1111 North Westshore Boulevard
Suite 208
Tampa, FL 33607-4711
Phone (813) 287-1040
Facsimile (813) 287-1041
Re: Renewal of Statutory Accidental Death & Dismemberment Coverage
Meri-De:
In 1993 the Florida Legislature enacted Florida Statute § 112.191 that entitled firefighters that
are killed in the line of duty to benefits that are paid in addition to Workers' Compensation
benefits. The statute establishes three (3) distinct categories governing the entitlement to these
benefits.
1. If a firefighter is accidentally killed while engaged in the performance of his or her
firefighting duties.
2. If a firefighter is accidentally killed while engaged in the performance of his or her
firefighting duties and the death occurs as a result of the firefighter's response to what is
reasonably believed to be an emergency involving the protection of life or property,
3. If a firefighter is unlawfully and intentionally killed or is killed as a result of arson.
When the Act was first adopted, the amount of benefit payable under items 1 &2 above was
$50,000. The original benefit that was due for firefighters killed as a result of an
unlawful/intentional/arson event (item 3 above) was initially established at $150,000.
The Act requires the Florida Fire Marshal to adjust these benefits annually based on changes in
the Consumer Price Index. Effective July 1, 2014, the benefits were increased to:
➢ $64,683.39 if a firefighter is accidentally killed (item I above)
➢ $64,683.39 if a firefighter is accidentally killed while engaged in the performance of his
or her firefighting duties and the death occurs as a result of the firefighter's response to
what is reasonably believed to be an emergency (item 2 above).
➢ $180,160.78 if a firefighter is unlawfully and intentionally killed or is killed as a result of
arson.
Effective October 1, 2012 the County purchased a 2 year AD&D policy (scheduled to expire on
10/1/14) from Hartford Life and Accident Insurance Company for a term premium of $11,964.00
to be paid in annual installments of $5,982.00. While the policy specifies a monetary limit, the
policy stipulates that it will provide benefits and limits no less restrictive than those governed by
FS 112.191. Arthur J. Gallagher serves as the County's agent for this policy.
Gallagher has submitted renewal proposals from 2 different insurers for this policy. The first
proposal was submitted by the incumbent insurer (Hartford). They proposed the following
premium structure:
➢ $4,395 .00 if an annual policy (10/1/14 to 10/1/15) is selected.
➢ $4,175.00 annual installments if a 2 year policy (10/1/14 to 10/1/16) is selected. This
equates to a term premium of $8,350.00
➢ $7,911.00 term premium for a 2 year policy (10/1/14 to 10/1/16) if the entire premium is
pre -paid.
Hartford also submitted an alternative proposal that included coverage in the event a firefighter is
paralyzed as a result of the events specified in FS § 112.191. The amount payable would depend
on the extent of the paralysis. If a firefighter losses movement of both upper and lower limbs,
the policy will pay the full amount developed by the State Fire Marshall ($64,683.39 or
$180,160.78). If a firefighter losses movement of both lower limbs, the policy will pay 75% of
the amount developed by the State Fire Marshall ($48,512.54 or $135,120.58). If a firefighter
loses movement of both upper and lower limbs of one side of the body, the policy will pay 50%
of the amount developed by the State Fire Marshall ($32,341.70 or $90,080.39). If a firefighter
losses movement of one limb, the policy will pay 25% of the amount developed by the State Fire
Marshall ($16,170.85 or $45,040.20). The proposed premium for this option is a follows:
➢ $4,927.00 if an annual policy (10/1/14 to 1011115) is selected.
➢ $4,681.00 annual installments if a 2 year policy (10/1/14 to 10/1/16) is selected. This
equates to a term premium of $9,362.00
➢ $8,868.00 term premium for a 2 year policy (10/1/14 to 10/1/16) if the entire premium is
pre -paid.
It is recommended that this option be eliminated from further consideration since such benefits
are not statutorily required and all of the firefighters medical costs and a significant portion of
his or her lost wages will be paid by Workers' Compensation.
Gallagher also submitted a proposal from ACE American Insurance Company that offers the
same level of protection being offered by Hartford and includes the enhanced paralysis coverage.
ACE proposed a 2 year policy with benefits consistent with those being offered by Hartford to
include the enhance paralysis coverage. ACE proposed annual installments of $5,326.00 which
equates to a term premium of $10,652.00. Since ACE's premium is higher than what is being
proposed by Hartford without any enhanced coverages, it is recommended that this proposal be
eliminated from further consideration.
It is recommended that Monroe County renew its Statutory Accidental Death and
Dismemberment coverage with Hartford Life and Accident Insurance Company without the
enhanced paralysis coverage. It is also being recommended that the County select one of
Hartford's 2 year options. If the County selects paying the premium in annual installments
($4,175.00) the total 2 year cost will amount to $8,350.00. If the County selects prepaying the
entire 2 year premium, the total 2 year cost will amount to $7,911.00. This option will result in
the County saving $439.00 and will reduce the administrative burden associated with this policy.
Both options (annual installments vs 2 year prepaid premium) will result in reduced premiums
for the County. If the County selects paying the premiums in annual installments, the County
will reduce its AD&D annual premium by $1,807.00 (30%). If the County selects prepaying the
2 year premium, the County will reduce its AD&D premium for the 2 years by $4,053.00 (34%).
1 will defer which payment option is in the County's best interest to your attention.
As always, if you have any questions or concerns, please do not hesitate to call.
Cordially,
Sidney G. Webber
CPCU, ARM
Cc: Teresa Aguiar