01-11-1989 Additions - Laserfiche WebLink

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1. REDUCED COST OF WORKERS COMPENSATION COVERAGE In the past, LMCIT has calculated workers compensation premiums for elected officials coverage using the formula prescribed by the rating association for private insurance companies. Under this formula, premiums were based on an imputed minimum salary of $108 per week. The rate for the °Municipal employees° class of $5.88 per $100 of payroll was then applied. This resulted in premiums of over $1650 to cover a five - member council. For 1989, LMCIT will use a lower rate of $2.91 per $100 of payroll for elected officials. This rate will be applied to an imputed salary of $70 per week, rather than $108 as in the past. These two changes will reduce the cost of covering a five - member council to $530 in 1989 - a reduction of over two- thirds. In the opinion of the LMCIT Board of Trustees, this revised rating approach will more accurately reflect the actual risk. 2. ACCIDENT POLICY OPTION ' LMCIT has also arranged with CIGNA to offer a second even less expensive option through which cities can provide some protection for their council members against the risk of being injured or killed in the course of performing their duties. For a cost of $12.75 per person per year, the city can purchase an accident policy which provides benefits for death or a disabling injury arising out of an accident which occurs while the council member is traveling to, participating in, or travelling from a regularly scheduled council meeting, or while conducting ,official council business on behalf and at the request of the council. - - The policy provides a death benefit of $100,000. It also provides a schedule of lump sum benefits for loss of a hand, foot, or eye. The policy also provides a short -term disability benefit of $400 per week. Disability benefits are payable for a maximum of 26 weeks, after a three -day waiting period. Disability benefits would be paid if as the result of a covered injury the individual cannot do at all the substantial and material duties of his type of work. It is important to understand that this coverage differs significantly in many ways from the benefits that would be provided by workers compensation. Some of the more important differences are: - The accident policy does not pay for medical costs. The individual would have to look to his own health coverage to pick up these costs. Page 6