Exhibit 1 - Agenda Information Sheet
City of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement & Compliance
ACM: David Gaines
DATE: March 1, 2022
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the City Manager to approve the spend authority with Continental American Insurance
Company (Aflac), for voluntary insurance products, to include accident, critical illness with cancer, and
hospital indemnity coverage for the City of Denton employees; providing for the expenditure of funds
therefor; and providing an effective date (File 7858 – awarded to Continental American Insurance
Company, for a term ending on December 31, 2022, in the not-to-exceed amount of $273,906.00).
INFORMATION/BACKGROUND
In 1984, the City offered Aflac voluntary products on an individual policy basis. At that time, Aflac set up
the account as an “employee direct bill,” meaning the premiums were bank drafted from employees’
personal bank accounts rather than payroll deducted. Due to low enrollment, Aflac discontinued enrollment
for any new coverage, but employees already enrolled continued their coverage. In November 2020, the
Denton Fire Association introduced Aflac voluntary products to their membership on an individual policy
basis.
In past years, employees have voiced interest in seeing voluntary products added back into the City’s
benefits offering. In January 2021, McGriff, Seibels & Williams, the City’s employee benefits consultant,
completed a market solicitation for voluntary insurance products on the City’s behalf. The City received
five proposals from Aflac, Colonial, Symetra, United Healthcare, and UNUM.
Staff reviewed the proposals submitted, and Aflac was awarded the business for the following reasons:
• Aflac offered group plans to all employees and dependents,
• Aflac’s plans allow enrollment with no health underwriting requirements,
• Aflac’s current relationship with the Denton Fire Association; and
• The City’s positive past experience with Aflac.
The City implemented the Aflac products mid-year through a special open enrollment in August 2021 for
a September 1, 2021, effective date. The Aflac voluntary products were also offered in the regular annual
open enrollment period in October 2021, with benefits effective on January 1, 2022.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Project Description Estimated 16-Month Expenditure
Voluntary Products – 09/01/2021-12/31/2021 $23,906.00
Voluntary Products – 01/01/2022-12/31/2022 $240,000.00
Total: $273,906.00
As with other voluntary benefits the City offers (e.g., dental and vision coverage), the Aflac voluntary
products, including accident, critical illness with cancer, and hospital indemnity coverage, are funded 100%
by employees through payroll deductions. The City does not contribute to the premiums for voluntary
products.
Based on past experience and interest in voluntary insurance products, we estimated the first year's total
spend to be under $50,000, which is below the threshold requiring a formal solicitation process. During the
open enrollment period for the 2022 plan year, the response for the voluntary insurance products was far
better than anticipated, and enrollment far exceeded expectations. The monthly expenditure amount for the
2022 plan year is approximately $20,000 per month, which results in a significantly higher first-year cost
than was anticipated.
The current Aflac contract is through the 2022 plan year only; a formal RFP process for a multi-year contract
will be initiated in Spring 2022 to be effective for the 2023 plan year starting on January 1, 2023.
RECOMMENDATION
Continue the agreement with Aflac for voluntary insurance products, to include accident, critical illness
with cancer, and hospital indemnity coverage, for a 16-month term to expire on December 31, 2022, in a
not-to-exceed amount of $273,906.
PRINCIPAL PLACE OF BUSINESS
Continental American Insurance Company
Columbia, SC
ESTIMATED SCHEDULE OF PROJECT
Implementation began in June 2021, with an effective date of September 1, 2021. This contract expires on
December 31, 2022.
FISCAL INFORMATION
The Aflac voluntary products, including accident, critical illness with cancer, and hospital indemnity
coverage, are funded 100% by employees through payroll deduction. The City does not contribute to the
premiums for voluntary products.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Marketing Analysis
Exhibit 3: Ordinance
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Linda Kile, 940-349-8388.
Legal point of contact: Marcella Lunn at 940-349-8333.