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R-2015-3120 - 12/17/2015 RESOLUTION NO. R-2015-3120 WHEREAS, Aetna has submitted a Letter of Understanding regarding Life Insurance, Accidental Death & Dismemberment (AD&D) Coverage and Disability Coverage from January 1, 2016 through December 31, 2016; and WHEREAS, the City Council desires to approve the Letter of Understanding with Aetna,Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City a Letter of Understanding with Aetna, a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended RESOLVED this 17th day of December, 2015. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Clerk 0112.1504;00347788 @ EXHIBIT aetna �� �� Michael J Langford Q Account Executive Aetna Life Insurance Company 2777 N.Stemmons,F730' Dallas,TX 75207 469-804-4337 November 10,2015 Mr. Jay Light Benefits Manager City of Round Rock 231 B. Main Street Round Rock, TX 78664 Re: City of Round Rock- Confirmation of Products and Services and gully Insured Rates Jay, Thank you for selecting Aetna and we look forward to continuing our business relationship with the City of Round Rock. Based on our original proposal and subsequent discussions,we have outlined the products and services City of Round Rock has purchased for the plans effective January 1,2016. Please review and confiim that this information accurately reflects the City of Round Rock's understanding. If you have any questions,you may contact me to discuss any necessary changes. Coverages and Financial Arrangements The following illustrates the finding arrangements by line of coverage: Coverage Funding Arrangement/Pooling Point Basic Life Pros ctively Rated Supplemental Life Prospectively Rated Dependent Life Prospectively Rated AD&D Ultra Prospectively Rated Short Tern Disability Prospectively Rated Long Term Disability Prospectively Rated Fully Insured Rates Based on the coverages awarded and package of services selected from Aetna,the agreed-upon monthly fully insured rates for each of the subgroups with differing rate schedules are as follows: Monthly Rate Rate Guarantee Life Coverages Per$1000 Period 812 $0.104 36 month P a g e 1 Supplemental Life Coverages, Employee& Monthly Rate Rate Guarantee Spouse Per$1,000 Period Age Band 36 Months 0- 19 $0.0501$1,000 20-24 $0.0501$1,000 25-29 $0.0501$1,000 30-34 $0.060/$1,000 35-39 $0.090/$1,000 40-44 $0.1401,000 45-49 $0.220/$1,000 50-54 $0.420/$1,000 55-59 $0.6601$1,000 60-64 $0.7201,000 65-69 $1.330/$1,000 70-74 $2.708/$1,000 751- $7.7781$1,000 Dependent Child Monthly Rate Rate Guarantee Life Covera es Per$1,000 Period 244 $0.093/$1,000 36 month Short-Term Monthly Disability Pees/ Rate Guarantee Coverages Rates Period 181 $0.289 36 months Long-Term Monthly Disability Fees/ Rate Guarantee Coverages Rates Period 812 $0.160 36 months The rates shown above are contingent upon the conditions outlined in our final proposal (including the Rates, Plan Design and Quotation Assumptions sections)and the most recent version of the Implementation Decisions and Issues document. Agent,Brolcer,or Consultant Compensation Aetna has various programs for compensating agents, brokers and consultants. If you would like information regarding compensation programs for which your agent,broker, or consultant is eligible, payments(if any)which Aetna has made to your agent,broker, or consultant;or other material relationships your agent,broker, or consultant may have with Aetna,you may contact your agent,broker, or consultant; or your Aetna account representative. Information regarding Aetna's programs for compensating agents, brokers, or consultants is also available at www.actna.com. P a g e 2 Terms of Rate Guarantee The rates are guaranteed for the rate guarantee period, as long as there is little difference between the information submitted on that date and the information used to prepare this quotation. During the guarantee period,we may recalculate the quoted rates if: - The participation requirements are not met; - There is a change in the benefits plan, or account structure; - The number of participating lives or volume changes by more than 10%by line of coverage,positive or negative; based on the number of lives that was used for this proposal response; The contract holder terminates the contract. Costs for special services,those not included or assumed in the proposed pricing are billed directly or charged at year-end. Please let us know if you have any questions or concerns regarding the information outlined in this letter and the attachments. We appreciate City of Round Rock's business and look forward to a successful plan implementation. Sincerely, Acceptance for City of Round Rock By: Michael J Langford Title: Date: Account Executive Aetna Life Insurance Company cc: David Gibson Jim Crombie Amanda Lee Aaron Guice Corey Crews Sandy Kennedy Bryan Southall Page 3 LIFE COMPARISON Estimated Gross Payroll: $48,681,564 Estimated Costs CURRENT w/Aetna: .104 per$1,000 of Payroll $60,754.59 2016 w/Aetna .083 per$1,000 of Payroll $48,486.84 Difference: $12,267.75 AD&D Coverage Estimated Gross Payroll: $48,681,564 Estimated Costs CURRENT w/Aetna: .02 per$1,000 of Payroll $11,683.58 2016 w/Aetna .02 per$1,000 of Payroll $11,683.58 LTD COMPARISON Estimated Gross Payroll: $48,681,564 Estimated Costs CURRENT w/LFG: .17 per$100 of Payroll $82,758.66 2016 w/Aetna .16 per$100 of Payroll $77,890.50 Difference: $4,868.16 aetna(V Basic Life and AD&D Rates sold with Optional Life* Benefit Name Lives Rate Volume Monthly Premium Basic Life* 812 $0.083/$1,000 $44,618,600 $3,703 Basic AD&D Ultra 812 $0.020/$1,000 $44,618,600 $892 Optional Life Rates* Benefit Name Age Bands Lives Rate Volume Monthly Premium Optional Life 0-19 0 $0.050/$1,000 $0 $0.00 20-24 4 $0.050/$1,000 $328,000 $16.42 25-29 13 $0.050/$1,000 $1,136,000 $56.86 30-34 46 $0.060/$1,000 $6,277,000 $376.72 35-39 72 $0.090/$1,000 $12,203,000 $1,097.25 40-44 67 $0.140/$1,000 $10,885;000 $1,523.54 45-49 52 $0.220/$1,000 $7,493,000 $1,647.84 50-54 38 $0.420/$1,000 $3,890,000 $1,633.41 55-59 17 $0.660/$1,000 $1,790,000 $1,181.34 60-64 9 $0.720/$1,000 $450,000 $323.99 65-69 4 $1.330/$1,000 $120,250 $159.92 70-74 0 $2.708/$1,000 $0 $0.00 75+ 0 $7.778/$1;000 $0 $0.00 Optional Life Spouse 0-19 3 $0:050/$1,000 $15,000 $0.75 20—24 9 $0.050/$11000 $46,500 $2.33 25-29 21 $0.050/$1;000 $105,000 $5.26 30-34 38 $0.060/$11000 $190,500 $11.43 35-39 43 $0.090/$1;000 $216,000 $19.42. 40-44 44 $0.140/$1,000 $217,500 $30.44 45-49 30 $0.220/$1;000 $150,000 $32.99 50-54 26 $0.420/$1;000 $129,OOD $54.17 55-59 15 $0:660/$1,000 $75,000 $49.50 60-64 11 $0.720/$1,000 $54,000 $38.88 65-69 2 $1.330/$1,000 $6,825 $9.08 70-74 1 $2.708/$1,000 $3,000 $8.12 75+ 1 $3.716/$1,000 $1,500 $4.06 Optional Child Life ._ 244 $0.093/$1,000 $4,872,000 $453 Aetna bills Optional Life Insurance on an age graded basis. It is expected that employee deductions will be taken based on these rates and aggregate insured volume will be reported monthly for each 5-year age bracket.The proposed rates may be subject to imputed income under Section 79 of the Internal Revenue Code. Please consult your tax counsel on this matter. *A census with final enrollments should be submitted to Aetna prior to the effective date;however,it must be provided rio later than 30 days after the enrollment date.The final rates may be subject to change based on our review of the November 2015 www.aetna.com Page 1 enrolled status. Aetna will issue or renew a single group life policy providing for basic and supplemental coverage if our quote is accepted.In setting the rates,we first determined the premium that would be required for basic and supplemental coverage if each were offered on a stand-alone basis,to determine a total overall premium for the policy. Then in order to align with your current rate structure,we will underwrite based on the same.total overall premium,and adjust the stand-alone premiums by increasing the employee-paid supplemental.premium and decreasing the employer-paid basic premium if you direct us to do so.By accepting our quote,you are giving us that direction and are representing to us that(1)both basic and supplemental coverage are offered under a single ERISA-covered welfare benefit plan,and(2)Your plan design and employee communications support the allocation of premium between basic and supplemental coverage,and(3)this premium arrangement as applied to your plan is in compliance with ERISA.You also acknowledge that Aetna offers to provide you with a premium quote for this policy where basic and supplemental coverage are set independently and without reference to each other. November 2015 www.aetna.com Page 2 Basic and Optional Life Insurance Plan Design Plan Features Full-Time Employees Eligibility Waiting Period 30 Days Minimum Hours/Week 30 Basic Life 1 times the employee's basic annual earnings to a maximum of$1001000 Basic AD&D Equal to Basic Life Insurance Dependent Child Eligibility Live birth to Age 26 Optional Life $10,000 increments subject to a maximum of the lesser of (employees must purchase Optional Life in order to 5x earnings or$300,000 purchase Optional Dependent Life) Optional Dependent Life Spouse:$5,000 Increments;to a maximum of$150,000 (Not to exceed S0%of employee's Optional amount) Chiid(ren):$10,000 Increments; (Not to exceed 5054.of employee's Optional amount) Overall Plan Maximum $400,000 Age Reduction Rule by35%@65;by5O%@70 Basic Life Guarantee issue* $100,000 Optional Guarantee issue* The lesser of 3 times salary or$280,000 Optional Dependent Guarantee Issue* Spouse:$30,000 Child:$10,000 Disability Provision(for active employees only;upon PW 60/SSNRA qualifying,all AD&D Ultra and Dependent Life Insurance ends) Accelerated Death Benefit Included 75%Discounted. Life and AD&D Quote Assumptions Effective Date 01/01/2016 Rate Guarantee 36 Months (01/01/2016-12/31/2018) *Receiving census at least once per year is a condition of the rate guarantee. SIC Code 0 9111 Commissions 0 Basic Life Commissions:None 0 Optional Life Commissions:None o Producer Compensation Aetna has various programs for compensating agents,brokers and consultants. if you would like information regarding compensation programs for which your producer is eligible,payments(if any)which Aetna has made to your producer,or other material relationships your producer may have with Aetna,you may contact November 2015 www.aetna.com Page 3 your producer or your Aetna account representative. Information regardingAetna's programs for compensating producers is also available at www.aetna.com. Premium Tax Included in rates Contract State TX Grace Period 31 Days Eligibility Handling Eligibility will be maintained by City of Round Rock Basic Life Minimum Participation 100% Optional Life Minimum 28% Participation Active At Work Rules • Plan Effective Date—Actively Working Employees: Existing coverage is transferred on a"no loss—no gain basis.This means that an employee or participant will not be penalized or lose the benefits/provisions already attained before switching insurance carriers,nor will they gain any additional benefits/provisions for which they have not yet satisfied the requirements or are not yet eligible for. • Plan Effective Date—Disabled Employees: Employees who are away from work due to a disability who are not covered under a prior carrier's premium waiver feature may have existing coverage transferred an a"no loss—no gain"basis. To do this Aetna,requires the receipt of a list of disabled employees. This list should;include life coverage amount,date of birth,and disability reason. Based on the review of this list Aetna reserves the right to make adjustments to the proposal. • Newly Eligible Employees: If ill or injured,and away from work on the date that coverage would become effective,the effective date of coverage is delayed until the employee returns to full-time work for one full day. Evidence Of Insurability Will be • Exceeding the Guarantee Issue Amount:Any amount above the guarantee Required in the Following issue amount that is listed in the Plan Design section of the proposal will Situations require evidence of insurability. Evidence of insurability is not required due to an increase in salary that results in coverage above the guarantee issue amount. • Late Applicants:Employees who enroll for any contributory Life coverage more than 31 days after the date they are first eligible,elect to increase their coverage,were previously declined for coverage, provided incomplete information,or,have applied for and received and accelerated death benefit payment will be required to provide evidence of insurability. • Increases in Coverage:Employees who are currently enrolled for Optional or Dependent Life are allowed to increase the coverage by one level without having to provide evidence of insurability,provided the increase does not exceed the guarantee issue amount. • Reinstatement of Coverase:Employees who voluntarily cancel Optional or Dependent Life will be required to provide evidence of insurability if coverage is again requested. • Rehired Former Employees: if an employee is rehired after having terminated their employment,they will be subject to the same evidence of insurability requirements that apply to a person who has been hired for the very first time. November 2015 www.aetna.com Page 4 Definition of Earnings • Commissioned Sales Force:Total annual income, Including commissions, averaged over a 12 month period or actual months of employment if less. • All others:The employee's basic annual salary or wage,exclusive of bonuses, overtime or extra compensation. Accelerated Death Benefit • 24 month terminal illness period ® 75%max benefit percentage • $500,000 benefit max • Payment will be discounted by an interest charge AD&D Ultra Provisions • One quarter payment for uniplegia,or loss of a thumb and index finger on the same hand;one-half payment for paraplegia or hemiplegia;loss of a hand,foot or sight of one eye;either hearing or speech;or third degree burns covering 50-74%of the covered person's body;full payment for quadriplegia;loss of both hearing and speech;both hands, both feet,or both eyes;third degree burns covering 75%or more of the covered person's body;or life • In addition to the standard benefits listed above,we also provide the following coverage at no additional cost: — Passenger Restraint and Airbag Benefit-$10,000 Seatbelt/$5,000 Airbag — Education Benefit for Spouse and/or Child-5%to$5,000 — Child Care Benefit-3%to$2,000 — Repatriation of Remains—up to$5,000 — . Coma Benefit—5%of the Principal Sum for up to 11 months,45%at month 12 • Total Disability Benefit—up to 100%of the principal sum Disability Provision Premium Waiver:With this provision,employee coverage may be continued without premium payments if an employee becomes totally and permanently disabled before age 60 and the disability lasts for at least 9 months.Premium Waiver will terminate the earlier of the date the employee reaches the amended 1983 Social Security Retirement Age or their date of retirement(Standard Option). AD&D Ultra Exclusions • No benefits are payable for a loss,or the accident which resulted in the loss,if the loss or the accident is the result of: A bodily or mental infirmity;a disease,ptomaine or bacterial infection, not a direct result of an accident; medical or surgical treatment not needed as a direct result of an accident; suicide or attempted suicide;an intentionally self-inflicted injury;ligature strangulation resulting from auto-erotic asphyxiation;war or act of war; voluntary inhalation of poisonous gases;commission of or attempt to commit a criminal act;use of alcohol,drugs or intoxicants,except as prescribed by a physician(when the person follows the dosage instructions);contact with nuclear or atomic energy;and air or space travel,unless a passenger without duties. (Exclusions vary by state) November 2015 www.aetna.com Page 5 -i aetna Additional Assumptions • Quotes are based on the assumptions that all information provided to Aetna is correct and complete,that the employer is a legitimate employer group and that the group is in sound financial condition. • Our quote assumed that both employer and employee paid benefits are compliant with ERISA regulations. o We reserve the right to re-calculate our rates/fees if there is a 10%change in lives,volume,or plan design. or if there is a material difference between the actual information submitted on the effective date and that submitted for use in preparing this quotation. 0 We reserve the right to recalculate our rates/fees if there is a statutory or regulatory requirement mandating the change of any benefit provision or administration,for example the elimination or restriction of a plan's ability to offset or reduce payable disability benefits by other income,including SSDI amounts. • Notification of acceptance of the proposal must be communicated In writing to Aetna no later than the earlier of 90 days from the date of this proposal and 30 days prior to the effective date. otherwise,late acceptance may cause a delay in contract issuance and other pertinent insurance information. Late submission may also result in an invalid proposal and require postponement of the effective date. • The rate guarantee is subject to the policy's termination provision.In addition,receiving census at least once per year is a condition of the rate guarantee. • AD&D Ultra benefits cannot be purchased without the purchase of Basic Life. • The enclosed group insurance rates assume that Aetna is the insurer for the life product for the policy year.Should Aetna not be the insurer for the group insurance product,the enclosed rates are subject to change. Takeover Claims • We agree to underwrite the program to avoid employee loss of coverage(i.e., we will cover on a no loss/no gain basis).This means that an employee or participant will not be penalized or lose the benefits/provisions already attained before switching insurance carriers,nor will they gain any additional benefits/provisions for which they have not yet satisfied the requirements or are not yet eligible for. • For plans that currently have a premium waiver provision in place,we assume that pending,as well as known claims for disabled employees(i.e.,premium waiver claims),are the responsibility of the prior carrier. November 2015 www.aetna.com Page 6 G aetna Deviations 6 Please note that compliance with ADEA is the responsibility of the plan sponsor. • Unless otherwise stated,the proposal is based on Aetna standard benefits. 0 2 individuals are noted on census for over the plan maximum and these individuals have been capped at plan maximum. ® Aetna will issue or renew.a single group life.policy providing for basic.and supplemental coverage if our quote is accepted.in setting the rates,we first determined the premium that would be required for basic and supplemental coverage if each were offered on a stand-alone basis,to determine a total overall premium for the policy. Then in order to align with your current rate structure,we will underwrite based on the same total overall premium,and adjust the stand-alone premiums by increasing the employee-paid supplemental premium and decreasing the employer-paid basic premium if you direct us to do so.By accepting our quote,you are giving us that direction and are representing to us that(1)both basic and supplemental coverage are offered under a single ERISA-covered welfare benefit plan,and (2)your plan design and employee communications support the allocation of premium between basic and supplemental coverage,and(3)this premium arrangement as applied to your plan is.in compliance with ERISA. You also acknowledge that Aetna offers to provide you with a premium quote for this policy where basic and supplemental coverage are set independently and without reference to each other. Life benefits are underwritten oradministered by Aetna Lie Insurance Company ALIO This material is for informational purposes only and is neither an offer of coverage nor medical advice. It contains only a partial,general description of plan or program benefits and does not constitute a contract. Consult your Group insurance Certificate to determine governing contractual provisions,includingprocedures,exclusions and limitations relating to your plan. All the terms and conditions of your plan or program are subject to applicable laws,regulations and policies.while this material is believed to be accurate as of the print date,it is subject to change without notice. in case of conflict between your plan documents and this information,the plan documents will govern. November 2015 www.aetna.com Page 7 Life Insurance Basic and Optional Life— • Benefit Exclusions: None for basic life.A two year suicide exclusion applies to Standard Product the optional life benefit. Features"" • Premium Waiver:(Premium Waiver quoted on this case is listed in the Disability Provision section).With this provision,Aetna determines if the employee is (Please refer to the Quote permanently and totally disabled. If yes,the employee's coverage may be Assumptions:section for continued without premium payments until the earlier of the date the additional information employee reaches the amended 1983 Social Security Retirement Age or their regarding standard product date of retirement(Standard Option). features) a Accelerated Death Benefit: If the employee is diagnosed with a terminal illness and has 24 or fewer months to live,or,suffers from a severe medical condition, the employee may request a portion of their basic life benefit in advance of death. • Conversion Privilege: Automatically included.Provides employees with the opportunity to convert their life insurance to an individual,whole life policy. Basic and/or Optional Life— • Portability: When coverage ends due to termination of employment,or,the Optional Product Features"" employee no longer belongs to a class of employees who are eligible for the coverage,the employee may port their coverage provided coverage doesn't (Please refer to the Quote end due to illness or injury. Assumptions section for additional Information regarding optional product features) Basic and/or Option • Benefit Exclusions: Excludes coverage for dependent that are confined at home Dependent Life Standard or elsewhere due to a medical/health condition until the dependent has been Product Features confinement free for 30 days in a row. Includes a two year suicide exclusion. • Accelerated Death Benefit: if a dependent spouse(or domestic partner if (Please refer to the Quote included)is diagnosed with a terminal illness and has 24 or fewer months to Assumptions section for live,or,suffers from a severe medical condition,the employee may request additional information that a portion of the dependent's life benefit amount be paid in advance of regarding standard and death. optional product features for dependent life) November 2015 www.aetiia.com Page 8 Life and AD&D Ultra—Value o Aetna Life Essentials'"': All Life and AD&D Ultra quotes include Aetna Life Essentials Add Services (ALE). ALE gives employees access to resources they need while everything is good in their life,at the end of their life and after they've passed away,to help employees and their loved ones. ALE provides members with access to: — Financial Planning Services:Actives,retirees and those who have ported their coverage have access to personalized financial planning help to meet their financial goals. — Physical:For members who have received a non-death payment under our AD&D Ultra benefit or who are suffering from an end of life condition,we provide direct access to a Licensed Social Worker who will personally assist the member with the struggles of having to deal with their disability or life limiting condition,while advocating for their care and well-being during a difficult period. — Legal Estate Services:If the employee or their spouse(or domestic partner,if included)is eligible for the Accelerated Death Benefit,we will provide them with access to in-office legal estate services. With the legal estate package an attorney will create or update their will, will execute durable or financial power of attorney forms,revocable living trust documents,tax planning,guardianship documents for minor children and/or provide legal representation for the sale of the member's primary place of residence. Standard,life Claim Services .•: . .-Customer Service: We provide atoll-free numbei for.eustomer service and.for•.. rovidin notification.oItdeath to.Aetna • .:Claim Pa mems::Clean claims are tar eted to be processed withiri 5,business days , v g . ..... .. ..... . ofreceipt by Ae n.:..............: ., ..•.. . ........ . . •..`.Benefit Payment Accuracy: Target Claim paymerit.accuracy.rate of:98.percent.:::::.•:: o Iine Life Claims System: Provides lan s onsors with the abiirty to s I .. life. - - -•• �,`'.claims and,mana a the life claimssubm�ssion rocess online rough the Employer. -..-..Secure Website ESW ..;,::;`::_ :`.:::•:.:•..;.: ::`;':- :::;.;:.�:;::::::.':::�.:.::'<:::•`::::;:`;;:�::`:;` :`; ;'.:;'::•. ••ws. emI o ers to ` ••i ervices:-:Allo -° :- -� � -' �- - o Beneficiary Management and Claim Elieibil ty S ' outsourceahe dandling of em la ee/retiree.lile insurance:beneficiary designation.; documents claim establishment and the servicing of employee/retiree inquiries and -re. uests re ardin their current Grou Life Benefits rofile Beneficiary Payments:`Exce t where restricted by state regulations,benefits:of. .. .•.-...;:•..:.:.......:.....:.:...., , .. -.,,, 5,000.,ormorea.redepos!ted•into,an,..Aetna•Benefits;Check.book•account in the-._::..:::. ::beneficiary`s name The funds in the account are not FDIC insured.but are.. •.. _ uaranteed b Aetna Life P.::.Y . :. ;..:...,:.: g:.......:...:...:..:...:y ..:.........:.e Insurance Com an ,.' he accounf provides:bene.iciaries.:.: ;.'with."checkbook.checks".that ma-_ be used to draw u on the account if the :.... .. ::..:.:.. Y p.. :... .;..:........ ... o e'sin le check for:the fuli.amount of :.:::beneficiar chooses to.doso,they;ma:y write.:n.::• .;:.::,.:: .............; proceeds in the account without penalt1es or fees.:Aetna guarantees a minimum . •.:• .:: :.:.::.. .;interest rate as set out in.the policy or other applicable documents The amount of : . interest earned.will vary from,week to week and will be disclosed jn the monthly . ;statements mailed.yia the.U S Postal Service to beneficiaries showing account nterest on the benefits in the account as soon as he:bene ciaries.wiil earn i ... .............:... ....:.: . . .. . the, account is set up.The Aetna,Benefits,Checkbook.a.ccount.enables,beneficiaries_.. to take their time,if necessary;to determine how to use the benefit proceeds November 2015 www.aetna.com Page 9 AD&D Basic AD&D—Standard Product a Benefit Amount: Paid to the beneficiary of the employee if the employee dies Features"" within 365 days of a covered accident. Non-death benefits are paid to the employee. • Covered Losses Recognized: Loss of life(including exposure and disappearance); (Please refer to the Quote loss due to the severance of a hand,foot or thumb and index finger on the same Assumptions section for hand;loss of sight,speech or hearing,loss of use of a limb due to paralysis,third additional information degree burns and coma. regarding standard and a Passenger Restraint Benefit: If the employee suffers a loss of life as a direct result optional product features) of a motor vehicle accident and the insured is properly using a passenger restraint and(if the driver)is properly licensed,a benefit will be payable. If an airbag is activated as a result of the same accident,an additional benefit will be payable. a Education Benefit: If the employee suffers a loss of life as a direct result of an accident,an education benefit will be payable on behalf of each dependent child and/or a surviving spouse for a maximum of 4 years from the date of death,with verification of continued enrollment once the child as graduated from high school. if the child has not yet completed their senior year of high school,we'll automatically make a payment on behalf of the child/ren. s Child Care Benefit: If the employee suffers a loss of life as a direct result of an accident,a child care benefit wiil be payable to cover expenses bssociated with the dependent child's enrollment in a legally licensed child care center for a maximum of 4 years from the date of death. a Repatriation of Remains Benefit: If the employee suffers a loss of life as a direct result of an accident while 200 or more miles from home,a benefit will be payable for the preparation and transportation of the body to a hometown mortuary. a Total Disability Benefit: If the employee becomes permanently and totally disabled as a result of a covered accident,this benefit will allow for the payment of the employee's Principal Sum to be made to their beneficiary if they die after the 365 day covered loss period ends provided premium payments continue to be made for the employee's AD&D Ultra coverage. • Benefit Exclusions: Please refer to the Quote Assumptions section for a listing of the standard exclusions that apply to AD&D Ultra coverage. ® Conversion:Conversion is not available standalone;however,if the employee elects to convert their Basic and/or Optional Life Insurance,they'll be given an opportunity to purchase an equal amount of AD&D coverage as a rider to the individual whole life policy if covered for AD&D Ultra when their life insurance ended. Conversion a If the policy discontinues and is not replaced by other group life coverage or if the employer cancels the life coverage for the class of employees to which the employee currently belongs,the amount that can be converted will be limited to $10,000. o AD&D Ultra cannot be converted;however,when converting the life coverage, an employee will be given an opportunity to purchase a separate AD&D rider to the life conversion policy. November 2015 www.aetna.com Page 10 Y. The premium and claim experience for these policies are no longer associated with the Life plan. However,the Life plan's claim experience is charged$195 for each $1,000 of converted coverage. Life and AD&D Ultra—Value o Everest Funeral Package,LLC: Includes 24/7/365 funeral planning and concierge Add Services services from Everest Funeral Package,LLC. Everest is an independent consumer advocate whose sole purpose is to provide the information families need to make the most informed decisions around all aspects of the funeral planning process and then to put those wishes into action. • Aetna Life Essentials' All Life and AD&D Ultra quotes include Aetna Life Essentials (ALE). ALE gives employees access to resources they need while everything is good in their life,at the end of their life and after they've passed away,to help employees and their loved ones. ALE provides members with access to: — Financial Planning Services: Actives, retirees and those who have ported their coverage can have prepared on their behalf a personalized financial plan to help them meet their financial goals. — Emotional Support: For employee or spouses suffering from an end of life condition,we provide unlimited telephonic grief counseling services to the member,their family and caregivers if eligible for the accelerated death benefit.We also provide access to our Compassionate Care Website that allows the person or their caregivers to obtain information on how to deal with end of life issues. — Physical: For members who are eligible for Premium Waiver extension;have received a non-death payment under our AD&D Ultra benefit or who are suffering from an end of life condition,we provide direct access to a Licensed Social Worker who will personally assist the member with the struggles of having to deal with their disability or terminal illness,while advocating for their care and well-being during a difficult period.We also provide members with access to vision,hearing,and fitness center discounts. — Legal Estate.Services: If the employee or their spouse(or domestic partner,if included)is eligible for the Accelerated Death Benefit,we will provide them with access to in-office legal estate services. With the legal estate package an attorney will create or update their will, will execute durable or financial power of attorney forms,revocable living trust documents;tax planning,guardianship documents for minor children and/or provide.legal representation for the sale of the member's primary place of residence. Also includes the Legal Reference Program as shown next. November 2015 www.aetna.com Page 11 Life,AD&D Ultra and Disability o Legal Reference''Program: Through the Legal Reference Website,members have —Value Add Services access to a free Basic Will program. Members can also create at no cost living wills,healthcare and durable financial power of attorney forms. Members also have access to information on identity theft prevention and a Victim Action Kit if a person's identity has been stolen. If the person is insured for supplemental life at the time they file for an accelerated death benefit,the person will also be eligible for free,in-office estate planning services consisting of document preparation,tax planning,uncontested guardianship arrangements and attorney representation for a real estate closing of the member's primary residence if the sale is due to the person's terminal illness. In-office attorney services may also be available to the executor of the person's estate in some instances. Portabilit ! :._The porfability .feature.,allows employees to take their coverage with them.if they ::• ':..: :. leave the company far reasons other than illness or mjury -Coverage can only be ported due to loss.of employment or When.the employee is. no(onager part of a class of employees who are eligible for the life insurance coverage • ; :Em to ees.must part their coverage in order to.port dependent coverage e reduction rule.:Covera e:wiiE be reduced to 65%. .. ..Ported covers e.mc udes.an.a .g.. . .:,.. .....::....; .... -at ag a 65.40%a tage.70 and 25%.at age 75,but not below.$5,000.: :.. . . , •..:.; portability the.em to eemAccidental DeathWheniblectrog .rider, that's aual to the oiled life amount(employee onf ::... : . :':�f the em to ee,.dies or.divorces,dependent ported cayerage will en .,.Conversion. . :::::.;:::•' ..:': .•::•:::.. ::.:.:.••. : ..: i:::will not be:avai.a e. ... .:.. .:.............. ... ... .. .. . r'.a d.d new ,. .:Former.em is ees ma. not increase their insurance.coyerage or, _ . i: : Once:coverage bas;been ported,any death claimsare:applied to the;experience of our portability pool oli is deeme to :_::•If the master;group:policy is:discoritinued by the,employer;;the,P:.��1!�..::,.::.:....:,.:...,: ::'remain in effect for individual who have:ported their coverage . . •in sub1 ect t o all of the plan. '`ema :� . .�,.�:Once an.?m loyee•.Ports;their:coverage,.they:r:..:.....-..:....,. ..:.....:.::.:...:::;.:.....: ::::provisions included int e master group contract,except that a person.may not :.,,-apply for an accelerated death_benefit after having ported their coverage .The efigibifit age:for.portable.coverage for employees ands oases. or.domestic•.:: Y artners is age 98 : ,.;s..' ,'.The.termmation.age_Is.99. An em lo. eels.eli ,616to ort chi d covers e royided : p y g e ; he child.is atJeast one.yeai youngerthan the:.maximum child eligibility ::.:.......:.._.:.:.:..........:.,...;.,•.:.:::.. :.for dependent.Jife insurance ll «.:. :Portabtlit rates'are.not.the same as,the group.policy rates an.,are,subject-to :chart'.<�' ``: {:':i:�:�: �:':'::`° ':�:�z:: `:`::.�'• : ;`;°:...�::`:;`:;:::::'::':i:,.a:;`:'i;.:':`: >";•;�;::;;:::: :;�::r'�:::' g. notices it send t :..:.a premium n s ......i. th � 2.00 r of n ::':'.::::_..;:,. .....:. ...... .....,..: ,. '•'�-Aetna will include a.direct>jiliing charge.,.:.: ... ...,....:.,....p;....:.:..._. ...:...:.:..,..::..:...::..:..,.•.. ::;... :::•.:;,~.,:.::.:::..., .:;..:,::'.formeo. r employees tabili Pool rates are resented on.a non-smoker%smokerbasis in five-year age.: :. ..•.• ..... :: .:. Por........•.tY:...•:::;.,•::::: p.:....:...::: :: ::.... ....:..... bands..'Note that,these rates are illustrative and are subject to change.. November 2015 www.aetna.com Page 12 Billing a Summary Billing O Aetna bills Optional Life Insurance on an age graded basis. it is expected that employee deductions will be taken based on these rates and aggregate insured volume will be reported monthly for each 5-year age bracket.The proposed rates may be subject to imputed income under Section 79 of the Internal Revenue Code. Please consult your tax counsel on this matter. *Availability may be limited based on case size or other factors and some features may be at an additional cost. November 2015 www.aetna.com Page 13 City of Round Rock,Texas Disability Proposal Short Term Disability Rates* Benefit Name Lives Rate Weekly Benefit Monthly Premium Volume Short Term Disability 181 $0.289/$10 Weekly $112,260 $3,247.53 Benefit *A census with final enrollments should be submitted to Aetna prior to the effective date;however,it must be provided no later than 30 days after the enrollment date.The final rates may be subject to change based on our review of the enrolled status. Short Term Disability Plan Design Plan.FeatureS. :'... . ;:.... ' ""`Full time Employees . Full time Employees " Type of Coverage Benefit%of Weekly Salary Benefit%of Weekly Salary Eligibility Waiting Period 'After 30 days of employment After 30 days of employment Minimum Hours/Week 30 hours 30 hours Benefit Type .t` :60/ ...:...:: ... .. ... .: 60% : Employee Contribution Type Voluntary Voluntary Minimum Participation. "� `-22% "22% Benefits Start(Accident) 8 days 8 days Benefits Start(Illness) 8 days 8 days Maximum Benefit Period 13 weeks 26 weeks : Maximum Weekly Benef..it :-`:- .::$1,000 ": ,..$1,000 Minimum Weekly Benefit None None Definition of.Disability Inability to perform.own.occupation.. :Inability to.perform,own occupation and a Partial(80%)earnings test and.a :Partial(80%)earnings test Earnings Test Partial(80%) Partial(80%) Definition of Earnings. . :'..?Coinmissioned Sales Force:Basic, Commissioned Sales Force:Basic.; earnings immediateI ' recedin the, earnings,immediate) p recedm the., disabilit exclusive.of. ::'.:' :" .` :date of disability exclusive of- . .::.,: date,oY:.::..; ,::.::::..::::::•:.:::::.::,::.::::.....::,:.:.:.::.:.....: :::::.:...._.. bonuses,overtime or extra. ::`:?bonuses,.overtime br extra.;.,.: .. ::'.. `compensation,inclusive of :'.:. compensation,inclusive of s ve-aged over.12.- °.: :. ;;:::.:.:;::,"::.::::.:.::.::::..::•:;:..:.:.::": :commissions,ayeraged:over.l2:. ::::.'commissJon a ... ......B ,..::.......:. .;....,....: mo iths of :month •eriod or actual months.of::::: :;:month period.or actual n, .... :;• t employment if less employmen...if le ear others:Banc. nt g . .,:.:.:•.:•.:::::::.•: .. :;:: .:.':. :.:.:__ :r:.:.A11 others:Basic earnings.::�:;"'::;•: ' �:. .. - :••: mmediatel �recedi.nthe date of :immediate) .preceding the date"of , •.'.:di ability exclusive of:bonuses, .:`.:. ..;". disability exclusive o : ;onuses,:.:.:.' overtime or extra compensation. overtime or.extra compensation. Partial Disability Yes Yes Work Incentive Benefit "Included Included Separate Periods of Disability 30 days 30 days P%-�tr%a July 2015 UIQ I I Page 1 City of Round Rock,Texas Disability Proposal Social Security Offsets Primary&Family Primary&Family Integration Method Direct Direct Rehabilitation. - :Employee participation is :.`.-Employee participation is. : .. .. andatory based on em to ee's mandator based on em Io ee's . .... A Y condition condltion Pre-Existing Exclusion 3/12 3/12 Participation ...: . .. .22/ ... : .. .,. 22%. ...:... Billing Summary Billing Summary Billing an July 2015 C Ic 43 Page 2 City of Round Rock,Texas Disability Proposal Short Term Disability Quote Assumptions Effective Date. .. .' "01/01/2016 Rate Guarantee 24 Months(01/01/2016-12/31/2017) *Receiving census at least once per year is a condition of the rate guarantee. SIC_Code.r:`..:<::'::::::,:: ER FICA Match Not Included Commissions ` ' t.':.Included Standard filed schedule `:Producer.Compensation Aetna has various•"rograms.for:compensatipg.agents,;brokers and p lf, oto would like'.information regarding compensation;::::::::;: programs far;which.your.prod.ucer.is eligible,payments{if any)which : . .. .- Aetna has made to your producer,or other material relationships your °:prpcfucermay have with. Aetna,,you;may contact:your producer.oryouur. Aetna account representative Information regarding Aetna's programs for compensating producers.is also available at www.aetna.com. :: Contract State TX—The Aetna(ALIO)standard filed contract language applies to this proposal unless changes are approved in advance by Underwriting. Special drafted contract language or plan provisions are not assumed in the rates. Grace,Perioc{ Premium Tax Included in rates Eligibility Handling,Enrollment -;; cEligibility Handiing,Enrollment and Coverage,Records.will.be: and,Coverage Records :mainta'ined by City of Round Rock,TX. Rehabilitation and Social Security All Costs Associated with rehabilitation and Social Security assistance Assistance have been included in the quoted rates. Types of Disabilities.Covered. :Non-Occupational <::.:::::.:'•. .. : : :-,: . ., .'. Includes Continuity of Coverage-Insured individuals do not lose coverage due to an employer's change in group insurance carriers. Legal Reference Program–Provide access to free living wills, healthcare power of attorney forms,identify theft prevention and a Victim Action Kit if a person's identity has been stolen,and,access to discounted Will preparation services. x July 2015 Oc Page 3 City of Round Rock,Texas Disability Proposal Work Plari Effective Date-Actively at Work Erttp/ogees-Existing coverage is Actively At Work Rute:.. c .::�. �;.�:::�::.:.:...:::............:.:.......... ..:.:.....•::.;.:.�::.:....��, .:....-..:.:•>:::°�<.".:':c•::;::�...... ......_.......: .:. ?:transferred.on a, ,,pp. no gain ;basis. ..; Di.abled Em"lo� es e -'Em to ees ho are . ; :.:•.:;:.�::.:::`:`.:.<. :�`;`. :::: .:. :'::.`:`.:PlanEffectiveDate s P. y [?,...Y.:....:�::.;.�:...�,•.....,a:..Y.:.. . rom work clue to a disability jncurred.prior.to:the Aetna s,effective.._. .date are considered to be covered under the prior carrier's plan for the ab i duratt f 'ono .their.' Il t ' w"rkont '.,.e." •"afrom o :.:..,.:.::�: ,:,".. ..:::.•.• � ,'•::..•..:: :;. ��..:-New/y Eligible ErrmbloYees-;if ill or in ur,d,and.aw•.Y....::...:...:..:.,...,.:..;..:_.:.. 1 :... ciate.that coverage would become effective the effective date of C overage is delayed until the employee,[eturns to full-time work for ::6he'f0l,l.'day ses in covers e. Increases in coveraRe.:appl!es to increa.,. g Effective Date Coverage Transfer We agree to underwrite the program to avoid employee loss of coverage(i.e.,we will cover on a no loss/no gain basis)subject to the Actively at Work Requirement. Late Entrants :.::`Em to ees wf�o enroll for'an contributory ST.D caverage.more'than.31. ::. . ..• days atpr,than.the date the" are frst.eligible,or.elect to increase their ;coverage.or who werepreviously declined for coverage must provide..:::. medIca l:evidence of msurabili..t Termination of Coverage Our quote assumed that Cessation of employment,contract termination,ineligible class,failure to make contribution. Inde .endent Med[cal.. `:':> :!The,cost for.IME has been.included.in the.quoted rates.. Examinations Existing Claims All contracts and initial rates assume that the current carrier will pay all claims incurred prior to the effective date of the Aetna policy. Exclusions :occupational injuries;"intentionally self-inflicted:injuries,committing an •assault,battery,or felony,act of war,civil coriimot�on July 2015 CM I I Page 4 City of Round Rock,Texas disability Proposal Additional Assumptions o Quotes are based on the assumptions that all information provided to Aetna is correct and complete,that the employer is a legitimate employer group and that the group is in sound financial condition. o Notification of acceptance of the proposal must be communicated in writing to Aetna no later than the earlier of 90 days from the date of this quote and 30 days prior to the effective date. Otherwise,late acceptance may cause a delay in contract issuance and other pertinent insurance information. Late submission may also result in an invalid proposal and require postponement of the effective date. ® We reserve the right to re-calculate our rates/fees if there is a 10% change in lives,volume,or plan design. Or if there is a material difference between the actual information submitted on the effective date and that submitted for use in preparing this quotation. e We reserve the right to recalculate our rates/fees if there is a statutory or regulatory requirement mandating the change of any benefit provision or administration,for example the elimination or restriction of a plan's ability to offset or reduce payable disability benefits by other income,including SSDI amounts. O Receiving census at least once per year is a condition of the rate guarantee. This STD proposal is only available in conjunction with either Life, LTD or Medical coverage's insured through Aetna. • Quotes are based on the assumption that the proposed STD coverage is ERISA corffpliant. Y The enclosed group insurance rates assume that Aetna is the insurer for the short term disability product for the policy year. Should Aetna not be the insurer for the group insurance product, the enclosed rates are subject to change. Disability benefits are underwritten or administered by Aetna Life Insurance Company(ALIC).This material is for informational purposes only and is neither an offer of coverage nor medical advice.It contains only a partial,general description of plan or program benefits and does not constitute a contract.Consult your Group Insurance Certificate to determine governing contractual provisions,including procedures,exclusions and limitations relating to your plan.In case of conflict between your plan documents and this information,the pian documents will govern. All the terms and conditions of your plan or program are subject to applicable laws,regulations,and policies.The benefits described in the plan design section are subject to change without notice pursuant to the terms and conditions of the Settlement Agreement issued by the Superior Court of the State of California, County of Sacramento on July 21,2006 applicable to all insurance carriers selling Group(Short Term or Long Term)Disability Insurance which may affect pricing. Puntm, July 2015 cm Page 5 City of Round Rock,Texas Disability Proposal ti ons:.,: :::: ":. '.. ...Uniess.otherwise.stated,"the proposal is based on Aetna standard Devi •.:..:':;:'; a o . ` istra on. it and ad•� in t . .. '""� benef s. m. Termination by Us :. :::.:.' : :': . •.`:'=-`::':;:`:This.Policy will terminate as ofxhe last_day.of the Grace Period•if ::;the"Premum•remains unpaid at the end of the Grace Period as '•:•:•"'••".: • -��•� •�-�"-• -�'�� '� ` •'::°'.::'`�;••°:described in.the.:Grace.Period.provision.underthe,.guote ..;••":;�:::`:`•' assumptions.section ariii,is subject to the terms of any laws or .::re ulatioris.In addition"We.ma terminate this.P.olicyi"as to any or..: :all coyera a otherthan.the,iealtti..ExpeneCoverage,ofallorany,: fo ees. ..;. : �. ::...... ... .: •;-: : ".:.".•.:• _::::class of.emp...Y....:":o.:.•:.:•� ... m::•e•.m....b.,.e:.r_;.;:':, .. by giving prior written notice to.the Policyholder en it will terminate The date sha[I not be earlier than 3ldays after the date of the notice unless it is agreed to by the :.. U ... "�:=Policyholder.and s. July 2015 cwtnn Page 6 City of Round Rock,Texas Disability Proposal Long Term Disability Rates* Benefit Name lives :.Rate**.. ::'.': :: Monthly Covered IVionthfyPremlum _ yroll Long Term Disability 812 $0.160/$100 Monthly $3,706,852 $5,930.96 Covered Payroll *A census with final enrellments should be submittedIo.Aetna,prior to the effective date;however,it must be provided no,later than.30 days after the enrollment date The final rates may be subject to change based on.our review of the enrolled status. **Covered Monthly Payroll for each employee will be equal to the monthly salary to a maximum of the maximum monthly benefit/benefit Percentage. otgotna, July 2015 Page 7 City of Round Rock,Texas Disability Proposal Long Term Disability Plan Design Plan Features Full-time Employees Eligibility Waiting Period Minimum Hours/Week 30 hours Benefit % 60% Maximum Monthly Benefit $5,000 Maximum Benefit Period To Age 65 RBD or SSNRA Minimum Monthly Benefit $0 Elimination Period 180 days Definition of Disability/Own Occupation 24 months Duration Partial Disability included Definition of Earnings Commissioned Sales Force:Basic earnings immediately preceding the date of disability exclusive of bonuses, overtime or extra compensation,inclusive of commissions averaged over 12 month period or actual months of employment if less. All others:Basic earnings immediately preceding the date of disability exclusive of bonuses,overtime or extra compensation. Earnings Test 80q/6o% Zero Day Residual Yes Pre-Existing Exclusion 3/12 Mental/Nervous Limitation 24 months of benefit per Occurrence Alcohol/Drug Limitation 24 months of benefit per Occurrence Self-Reported Disability Limitation Not Included Separate Periods of Disability 30 Days/6 Months Social Security Offsets Primary Only Work Incentive Benefit Duration/Thereafter 12 Months/Proportional Benefit Integration Method Direct Survivor Benefit 3 Months Rehabilitation Voluntary employee participation Employee Contribution Percentage Non Contributory Minimum Participation 100% Waiver of Premium included Enhanced EAP for LTD Insured members 3 face-to-face sessions plus unlimited telephonic EAP July 2015 tnau Page 8 City of Round Rock,Texas Disability Proposal Maximum Be Period.riod. Definition Benefit ._ SSNRA Benefits are payable while disabled according to the following schedule or until the 1983 amended Social Security Normal Retirement Age,if later Disabled at age 61 or younger,benefits continue to end of month age 65 age 62, 42 months age 63, 36 months age 64, 30 months age 65, 24 months age 66, 21 months age 67, 18 months age 68, 15 months age 69+ 12 months aetria, July 2015 CM I I Page 9 City of Round Rock,Texas Disability Proposal Long Term Disability Quote Assumptions Effective Date. Rate Guarantee 36 Months(01/01/2016-12/31/2018) *Receiving census at least once per year is a condition of the rate guarantee. :9111 Contract State TX—The Aetna(ALIC)standard filed contract language applies to this proposal unless changes are approved in advance by Underwriting. Special drafted contract language or plan provisions are not assumed in the rates. Grace Period Commissions Included,Standard filed schedule Producer Compensation Aetna has various programs for compensating agents,brokers and consultants.if you would like information regarding compensation programs for which your producer is eligible, payments(if any)which Aetna has made to your producer,or other material relationships your producer may have with Aetna, you may contact your producer or your Aetna account representative.Information regarding Aetna's programs for compensating producers is also available at www.aetna.com. Prem' iumTax ,. -. .. ... •. :Included in rates Actively At Work Rule Plan Effective Date–Actively at Work Employees–Existing coverage is transferred on a"no loss–no gain"basis. Plan Effective Date–Disabled Employees Employees who are away from work due to.a disability incurred prior to the Aetna's effective date are considered to be covered under the prior carrier's plan for the duration of their disability. Newly Eligible Employees–If ill or injured,and away from work on the date that coverage would become effective,the effective date of coverage is delayed until the employee returns to full- time work for one full day. Increases in coverage.applies to increases in coverage. July 2015 R Page 10 City of Round Rock,Texas Disability Proposal Definition of Disability Durina the Elimination Period and the Own Occupation Period: any day that an individual is unable to perform the material duties of his own occupation;or while unable to perform the material duties of his own occupation,is performing at least one of the material duties of any occupation on a part-time or`full- time basis and has lost at least 20%of his indexed pre-disability earning due to a disabling condition. During the any reasonable occupation period:any day that an individual is unable to perform the material duties of any occupation for which he is or may become fitted,based on training,education or experience;or while unable to perform the material duties of any reasonable occupation,is performing at least one of the material duties of any occupation on a part-time or full-time basis and has lost at least 40%of his indexed pre- disability earnings due to a disabling condition. - Types of Disability Covered Occupational and Non-occupational,not in lieu of Workers' Compensation Eligibility,Enrollment and Coverage Our quote assumed that Eligibility,Enrollment and Coverage Records Records will be maintained by City of Round Rock,TX. Includes Continuity of Coverage: Insured individuals do not lose coverage due to an employer's change in group insurance carriers. Worksite Modification: Aetna provides Worksite Modification on a case by case basis for claimants who,in our determination, could remain at work or return to work with modifications to their worksite environment. Social Security Assistance: Assistance for eligible employees with the application process for Social Security disability benefits. Disability benefits are offset by Social Security,helping reduce disability costs, Enhanced EAP for LTD Insured members — Includes • 3 face-to-face counseling sessions for LTD-covered members &immediate household members per year. • Unlimited telephonic EAP consultations. ® Referrals to community services,such as Alcoholics Anonymous,Eldercare and the Grieving Center. FICA Match . Internet access to our online WorkLife services. (FICA Match is contingent on Aetna's , Unlimited telephonic consultation for managers and filings and may not be available subject supervisors: to the Filing Restrictions.) a Standard communication and promotional materials can be printed from an employer resource website. FICA Matching Share Program—Our quote is on the assumption that we will administer the employer FICA match for City of Round Rock,TX.Aetna will fund and remit the ER FICA matching share to the governmental agency.Funds will be remitted under the Aetna name,address and FEIN. Funding of the ER FICA obligation and an administrative fee will be included in the insured rates. July 2015 �n�- Page 11 City of Round Rock,Texas Disability Proposal vil com Exclusions .:":::_ Insurrection,riot,cimotio n.;Intentional self-inflicted. :.::;: :.. m�ur'es,War or act of war,Committing or attempting to commit :a•cri.minal.act;Operating mgtor.yehicl.e.while:under.the influence of alcohol intoxicants or illegal drugs prescription drugs m excess,. :of h sicia rescribed amounts;Overthe-counter,medlcii ons.. taken in excess bf dosage instructions. Other m Our quote assumed that Quotes are based on the assumptions that all information provided to Aetna is correct and complete,that the employer is a legitimate employer group and that the group is in sound financial condition. a We reserve the right to re-calculate our rates/fees if there is a change in plan design or a 10%change in lives or volume. Or if there is a material difference between the actual information submitted on the effective date and that submitted for use in preparing this quotation. We reserve the right to recalculate our rates/fees if there is a statutory or regulatory requirement mandating the change of any benefit provision or administration,for example the elimination or restriction of a plan's ability to offset or reduce payable disability benefits by other income, including SSDI amounts.This includes regulatory changes to FMLA or State leaves if applicable. e Receiving census at least once per year is a condition of the rate guarantee. • Quotes are based on the assumption that the proposed LTD coverage is ERISA compliant. Q The enclosed group insurance rates assume that Aetna is the insurer for the long term disability product for the policy year.Should Aetna not be the insurer for the group insurance product,the enclosed rates are subject to change. ® Notification of acceptance of the proposal must be communicated in writing to Aetna no later than the earlier of 90 days from the date of this proposal and 30 days prior to the effective date. Otherwise, late acceptance may cause a delay in contract issuance and other pertinent insurance information. Late submission may also result in an invalid proposal and require postponement of the effective date. Deviations. :'. . ::Unless.otherwise stated the. roposal,is.based.on Aetna standard benefits and administration. July 2015 Page 12 City of Round Rock,Texas Disability Proposal Termination by Us e This Policy will terminate as of the last day of the Grace Period if the Premium remains unpaid at the end of the Grace Period as described in the Grace Period provision under the quote assumptions section and is subject to the terms of any laws or regulations.In addition,We may terminate this Policy as to any or all coverage,other than the Health Expense Coverage,of all or any class of employees or dependents of any one or more member employers by giving prior written notice to the Policyholder of when it will terminate.The date shall not be earlier than 31days after the date of the notice unless it is agreed to by the Policyholder and Us. July 2015 tin ~ Page 13 City of Round Rock,Texas Disability Proposal Short Term Disability Aetna Disability Services® O Aetna.is the'lndustry leader in clinical event managementand has-been a provider of grodp disability benefits for more than So years. o Our experience with all sized companies:and flexible plan.design, underwriting and fundi n.g'issues means:Aetna can provide effectivesolutionsfor companies:of all sizes Service 4 Clinical approach to managing disabilities utilizing clinical tools and resources to help manage employees back to work/health o Centralized Behavioral Health Unit that manages the clinical aspects of psychiatric disabilities o Centralized Vocational Rehabilitation Specialists that assess rehabilitative services in facilitation of return-to-work o On-line claim adjudication tool assures consistent interpretation and application of contract provisions a Choice:in claim submission;telephonic*,web*or,paper form ® Designated Disabiiiity Benefits Manager for each claimant o Special Investigations Unit monitors against fraud o Service and performance standards with regular reports 6 Single point of contact for your company's Benefits department Includes e Continuity of Coverage-Insured:individuals do not lose coverage,due to an employer's change in group insurance carriers: State Cash Disability Statutory State Plan ® Aetna will insure all employees(including part-time and temporary employees)at the statutory level required by each mandated disability state. o Statutory State Plan plus Supplemental STD Plans o Aetna will insure the statutory plan as described above. In addition,Aetna will provide a separate STD plan(insured or ASC) and coordinate the plans to provide benefits that are above and beyond those provided by the Statutory Plan. Refer to the Short-term Disability Plan Design section of this proposal for the supplemental plan design provisions for eligibility and supplemental plan design. o Better than Statutory State Plan a .Aetna will insure an enriched statutory plan,which exceeds the mandated state benefits in at least one aspect. This plan would be filed with the state and state guidelines would.be used to administer claims.Refer to the Proposed Benefit section below for detailed plan design provisions. July 2015 cwh I Page 14 City of Round Rock,Texas Disability Proposal Annual Enrallmerft._:; :..:.:.:':: This proposal assumes there.is no Annual Enrollment Period or STD. e : cov' era g. u Cove a e is`Contributo each. ear:durin the.em I , r. . . . . if yo:. r::.::....,r..l?...•...:C ,tr.i .......rY,.,..:::..:Y.........:.::::g. .:...:....p.....Y,........... : . annual enrollment eriod,em .loyees may elect to.change the ;amount of theirShart.Term Disabilit Insurance,; : . coverage..Employees who have previously decline. .coverage may also enroll.at this_ti.me..All changes_or enrollments that occur during this period,however,are subject to the evidence rules as they apply .; .... ,..... . .. . . .: . :......: .;:. to late entrant . Minimum Participation Aetna's proposal anticipates that a specific level of the eligible Requirement employee population will enroll in the plan and continue to be enrolled during the rate guarantee period. If this level were not to be achieved or maintained Aetna reserves the right to adjust the proposal and/or cancel the plan. The participation percentage is based on the number of employees who enroll in the plan versus the total eligible employee population. offsets :: income benefit sources payable to.the employee,:employee'.s spouse,children and/or dependents due to the employee's disability. or retirement.Sources include, but are not limited to,:benefits. :.,.. . . PayablefrPm Jones Act/MaritimeDoctnne,unemployment:.,:: :., compen sat(on 'Workers'.'Com p,statutor disabili plans,employer,; rovicled sick Ieaye or Sala continuation,Socia!Security,3. :party ;•; p•: ...: ::.:......:. liabilitY,Canada Pension.plan,4uebec;Pension..plan,yeteran.s. `:. :::,: .. :.:..s dis �or retirement I an '• benefts,'and group y p Separate Periods of Disability If 2 or more separate periods of disability are due to the same or related causes they will be deemed to be one period of disability and only one elimination period will apply if the separation occurs during the elimination period and the periods are separated by less than 30 days of work or the separation occurs after the elimination period and the periods are separated by less than 30 days of work. Existing Claims ::`;:::;::; :':. :;:`:`: All:contracts_and.initial.rates,assume that the current carrier will.pay .: aEl claims incurred pnor to the effectwe date•of the Aetna policy. Return to Work/Work Incentive If an employee has work earnings of more than 20%of indexed pre- Benefit disability earnings,the benefit will be adjusted as follows: Work Incentive Benefrt:During STD maximum benefit period or,if shorter,the first 12 months the employee has such employment income,the weekly benefit will be reduced only to the extent the amount of that employment income plus the gross weekly benefit exceeds 100%of Indexed pre-disability earnings. *Availability maybe limited based on case siie.or o#her-: ctors'and.some fgatures.may beat an,additional cost.: :.::: July 2015 Page 15 City of Round Rock,Texas Disability Proposal Long Term Disability Aetna Disability Services .:.Aetna is the industryleader.in clinical event management and has_ 'been a provider of group disability benefits or more than SO years 0 r ex Brien:•:.:..:.. :.,.....,:::.............: :.. :..... , u,: : p ,. „ ce with,611 size,companies and flexible plan design, � ..• d , . . . .: ... .un,erwriting and funding means Aetna can meet your.needs and ,. .. .. . . :. •. 'the needs of your employers. ::.<.:: ;::.:::::•::.:;::,,::�.-:::,:.:..:.:::,: .. ::: :. Service • Clinical approach to managing disabilities utilizing clinical tools and resources to help manage employees back to work/health • Centralized Behavioral Health Unit that manages the clinical aspects of psychiatric disabilities • Centralized Vocational Rehabilitation Specialists that assess rehabilitative services in facilitation of return-to-work • On-line claim adjudication too]assures consistent interpretation and application of contract provisions • Choice in claim submission:fax,mail or telephonic* • Smooth transition from STD to LTD—Claim Liaison assigned • Designated Disability Benefit Manager for each claimant • Special Investigations Unit monitors against fraud • Service and performance standards with regular reports • Single point of contact for your company's Benefits department are Optional Features*.. :,:::.::::: •. : :Child/Dependent Care Benefit:'After•6,months of benefit paid,a The following 0p.t.; al.Peatures benefit is available.to reimburse an employee for,child.care are contingent on Aetiia's.:.`:` expenses while participating in.an approved rehabilitation filings some,or all of the.,: program., An.tim6dht of$250 per month per dependent to a.'.. .. op.tionat Benefits,may nat be maximum of$500,is payable fqr.up:to 24 months - avaiiablesubject tothe t ding `,.• Extended Disability{ADL re}ated) A reduced disability benefit may Restrictions be payable for:up tb 60 months beyond the maximum duration if disabled em .lo ee is:confined.or,receivin@ home:health care,and,.': 2 or •�ore :::;:.:.:.:..:::.:;:.: : .,...:.:..:....;.:,...:;.... re uiressubstantial;assistant................. .. : ,.... .. ,e.to..perform, .....?r► ..:..A.. :.... substantial supervision„ue to cogriitive.impairm_erit. Benefit is :reduced to,85%of the,monthly benefit after.offsets:applied,up to,. :. •.;:: :;:.:::_:..,:::;;:;.::..:..::.::::...:.� .• :.` ......:.Accidental Personal Loss indemnity ene Su, �ec.,,•o,.•,,••, '.:,:;.:;;elimination.period,asetnumber:of:benefitpaymentswijbe.ma,e,;:;:. ::Optaonal F•e... res.are. �f an employee suffers a covered acadental personal loss available,a#,ari,'additional.cost .`:.. nd not l eluded in:;lhe ';:. .':...`':- .i.``S ousal Etehabilitation Benefits; Uacatlonal Rehabilltation.seryices ro osed,quote.,';:::' : : �:�:are,avaiia'@eto,the,spouse,ofaclaimantwh6'is.0nabl.e.to art�ci ate m an p,..,,:•...,p..:.•....•.., y Vocational Rehabilitation ro ram due to t,Bir :• isablin condition(sj• To,qualify for this benefit,tlie`cla,'imant's abili tY'must be more than 12 months in duration the s Ouse's'>:?. des.. :.:. .:. ..:.:....._.:::; ,:.....,.;,.....:,..;., :.:::..•.� :.::,?:::::.:•.:....... .::earnin's must.be&0%or;less of.the claimant's indexed pre=disability and e s Ouse must tie a suitable candidate for vocational :rehabI itation:as determined,by Aetna.::The claimant's benefit would be offset by 50%of the.resulting increase in the spouse's wages, July 2015 4 nQFL I tlag aa Page 16 City of Round Rock,Texas Disability Proposal :•.:::..; :•:: e. ;:;Benefit Escalator:.Additional benefit payable,11 disabled.employee reiaures stantial.assistance,to:perform 2 pr.more activities of flail livin o�.sybstantial:superyisiondue,to.cognitve,impairment= :. . ::.. ``:16%of re-disebilit eamin s up to 5 000 month) maxi.rrjum.:_? . ;.i :rt. e.r .:S'::` "r2''erner en alert • • ' • Benefit Escalator add-on features for a Arte ca � cy :. SYS `a, able.if,disablecl employee.regciires' : .....•.:.., . .....•..,.t .. ... ..:.. •. .. ......:.. ... ......._:: ::::: substan:ial assistance to.perforin 2,or i�►iore activities:of.daily,living ..•:. or substantial supervision due to cognitive impairment 10%of re disabili.`earnir `s;'d.. to.$5,000 rrionthly maximum .:Benefit':a. •::alsa:includes a$100 daily Respite Care benefit.that is payabT.for`up `:`'to 4 da S per.i?C year;a-one-fime,Care'iver Trainip•Benefit Of up tq :::$500;and.up to$25-per.inonth.for.the rental.of.an.Ernergency Vert,.. •:�S s eni. Y t :®..::.Accelerated Survivor Benefit(ADB tyae)::Optio.n.for.an.employee.t_. . : . :;reque'st.2dvenced payment.of the survivor benefit before death if the employee is not ex ected to live more than,l2 months ` .i st 24 onth tha .. 24 Months Work incentive Benefit .Dunng the fir... m.„ benefits.are payable and the.employeegjs`workiog_at : occupation,;tl�e emp oyee;can.receive;up to.100%of:indexed.pre-;:: :_. .. disability earnings through a combination of monthly benefit acid :;work earnings.After 24 months,the.monthly benefit payablev✓ill be . -:':`:adjusted proportionately to the loss of.income. '.:Conversion PrivilegE Vhen a.covered:person s emplo-yment.•:_;:::: t terminae "s:with the employer,:he or she maybe eligible to convert :''..a•nd beconie insured under.a disabilit conversion oiic .`The LTD. . y p; policy 'ori until the s i ` en. !? ded to serve a tem or ary.:_SOIUtI int_.......... ... .....,.,..:.:...: :: .:...::. .......::::.•.: .:..::.......... becomes insmred.u.nder:another.group.plan.,The .:.'::.: ::.:'•. emplo,-ee must convert within.31 days following termination of . ..:.....::...........;:;.:: ,• .. ._.. ;:,... - : :.:::emplo.Yment. :..;.;:,;:::::;?;,:;::.::.:_ <:;r::?..;:::• > :<::;:'::;'..::`::::::.`.:;`>`:;:::.::::;::i:. Annual Enrollment If your Coverage is Contributory,each year during the employer's annual enrollment period,employees may elect to change the amount of their Long Term Disability Insurance coverage.Employees who have previously declined coverage may also enroll at this time.All changes or enrollments that occur during this period,however,are subject to the evidence rules as they apply to late entrants. Minimum Par#icipat';on .:'.:`:<.`;`;. ::' Aetna's•proposal a nticipates.that a,specificievel ofthe elig!ble•employee. Ruirements pop equlation will enr611 rn the plan and continue to be enrolled during the rate•guarantee period Ifthis level were not to-be acliieved.or maintained Aetna reserves the:rig ht.to adjust thpm. o osal and ar cancel.- P the:plan Tlie participation percentage is.based ori the number of ;:. employees. ho,dnroil in the plan versusthe total eligible,employe : . :.. ... . population. — July 2015 Page 17 City of Round Rock,Texas Disability Proposal Offsets Income benefit sources payable to the employee,employee's spouse, children and/or dependents due to the employee's disability or retirement.Sources include,but are not limited to,benefits payable from:Jones Act/Maritime Doctrine,unemployment compensation, Workers'Comp,statutory disability plans,employer provided sick leave or salary continuation,Social Security,3`d party liability,Canada Pension Plan,Quebec Pension Plan,veteran's benefits,and group disability or retirement plans. Separate.Periods of Disability If 2 or more separate periods of disability are due to the same or related causes they will be deemed to be one period of disability and only one elimination period will apply if the separation occurs during the eliminationperiod and the periods are separated by less than 30 Days of work or the separation occurs after the elimination period and the periods are separated by less than 6 Months of work. Pre-existing Condition Limit These numbers represent the number of months in the Pre-existing Period followed by the Treatment Free Period followed by Month Exclusion Period. Disabilities resulting from conditions occurring during the Pre-existing Period are excluded from coverage during the Treatment Free and Exclusion Period. Return to Work if an employee has work earnings of more than 20%of indexed pre- disability earnings,the benefit will be adjusted as.follows: Work Incentive Benefit:During the'first 12 months the employee has such employment Income,the monthly benefit will be reduced only to the extent the amount of that employment income plus the gross monthly benefit exceeds 100%of indexed pre-disability earnings. After 12 months,the adjusted benefit will be determined as follows: (A divided by;B)x C where: A=Indexed pre-disability earnings minus such employment income. B=Indexed pre-disability earnings C=The net monthly benefit. Approved Rehabilitation During the employee's active participation in an Aetna Approved Rehab Program, Program,Aetna will pay an additional 10%of monthly benefit after all .applicable reductions for other income benefits but not more than $500 per month. This incentive will be paid up to 6 consecutive months for each period of disability. Worksite Modification Benefit Worksite Modification-Aetna provides Worksite Modification on a case ' by case basis for claimants who,in our determination,could remain at work or return to work with modifications to their worksite environment. Independent Medical The cost for IME has been included in the quoted rates.The cost for IME Examinations has been included in the quoted rates. t�� July 2015 Page 18 City of Round Rock,Texas Disability Proposal Disability benefits are underwritten or administered by Aetna Life Insurance Company A\U[1. This material is for informational purposes only and is neither an offer of coverage nor medical advice. |tcontains only apartial, general description ofplan nrprogram benefits and does not constitute acontract. Consult your Group Insurance Certificate to determine governing contractual provisions, including procedures, exclusions and limitations relating toyour plan. All the terms and conditions ofyour plan orprogram are subject to applicable laws, regulations and policies. While this material is believed to be accurate asofthe print date, itissubject tochange without notice, |ncase ofconflict between your plan documents and this information,the plan documents will govern. ' ���� July 2015 �8�Q������� Page 19