METLIFE GROUP VARIABLE UNIVERSAL LIFE - Quality and ...

COUNTY OF LOS ANGELES QUALITY AND PRODUCTIVITY COMMISSION
21 ST ANNUAL PRODUCTIVITY AND QUALITY AWARDS PROGRAM
“LEADING THE QUEST FOR EXCELLENCE”
FISCAL YEAR 2006-07 APPLICATION
Title of Program or Project (Limited to 50 characters, including spaces):
METLIFE GROUP VARIABLE UNIVERSAL LIFE (GVUL)
Date of Implementation/Adoption: January 1, 2007
Project Status: Ongoing One-time only
Did you submit this project before? Yes No
Executive Summary: Describe the project in 15 lines or less. Summarize the problem, solution, and benefits of the
project in a clear and direct manner.
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PROBLEM: The County offers Optional Group Term Life Insurance to all
permanent full time employees as part of a comprehensive benefits package. The
problem with Term Life is that it effectively stops when employment ends.
Purchasing continuation life insurance coverage can be very costly after retirement
for employees. SOLUTION: In a collaborative effort the Department of Human
Resources, Chief Executive Office and Auditor-Controller implemented a new
group variable univeral life insurance program (GVUL) to replace the current Term
Life for 12,000 non-represented employees. BENEFITS: The new GVUL program
is owned by the employee and may continue at group insurance rates after
retirement or termination. Another feature of the GVUL program is that it offers a
tax-advantaged investment opportunity that is available through payroll deduction.
Best of all, the new GVUL insurance program reduced overall premiums by
approximately 25%.
(1)
ESTIMATED/ACTUAL
ANNUAL COST AVOIDANCE
$ 0.00
(2)
ESTIMATED/ACTUAL
ANNUAL COST SAVINGS
$ 1,000,000.00
(3)
ESTIMATED/ACTUAL
ANNUAL REVENUE
$ 0.00
SUBMITTING DEPARTMENT NAME AND COMPLETE ADDRESS (INCLUDE TELEPHONE AND FAX NUMBER)
Department of Human Resources
3333 Wilshire Boulevard, Suite 1000
Los Angeles, CA 90010
Phone: (213) 738-2255
Fax: (213) 637-0832
(1) + (2) + (3)
TOTAL ESTIMATED/ACTUAL BENEFIT
$ 1,000,000.00
PROGRAM MANAGER’S NAME
Marian Hall, Senior Human Resources Manager
TELEPHONE NUMBER
(213) 738-2255
PRODUCTIVITY MANAGER’S NAME AND SIGNATURE
Marian Hall, Senior Human Resources Manager
DATE SIGNED
TELEPHONE NUMBER
(213) 738-2255
DEPARTMENT HEAD’S NAME AND SIGNATURE
Michael J. Henry, Director of Personnel
DATE SIGNED
TELEPHONE NUMBER
(213) 974-2406
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COUNTY OF LOS ANGELES QUALITY AND PRODUCTIVITY COMMISSION
21 ST ANNUAL PRODUCTIVITY AND QUALITY AWARDS PROGRAM
“LEADING THE QUEST FOR EXCELLENCE”
FISCAL YEAR 2006-07 APPLICATION
Title of Program or Project (Limited to 50 characters, including spaces):
METLIFE GROUP VARIABLE UNIVERSAL LIFE (GVUL)
FOR JOINT SUBMISSIONS ONLY (for single department submissions, do not include this page)
DEPARTMENT NO. 2 NAME AND COMPLETE ADDRESS
Chief Executive Office
Kenneth Hahn Hall of Administration
500 W. Temple Street, Room 713
Los Angeles, CA 90012
Productivity Manager’s Name and Signature
Victoria Pipkin-Lane, Chief Program Specialist
Department Head’s Name and Signature
David E. Janssen, Chief Executive Officer
DEPARTMENT NO. 3 NAME AND COMPLETE ADDRESS
Auditor-Controller
Kenneth Hahn Hall of Administration
500 W. Temple Street, room 525
Los Angeles, CA 90012
Productivity Manager’s Name and Signature
Michelle Day, Program Specialist II
Department Head’s Name and Signature
J. Tyler McCauley, Auditor-Controller
DEPARTMENT NO. 4 NAME AND COMPLETE ADDRESS
Productivity Manager’s Name and Signature
Department Head’s Name and Signature
DEPARTMENT NO. 5 NAME AND COMPLETE ADDRESS
Productivity Manager’s Name and Signature
Department Head’s Name and Signature
DEPARTMENT NO. 6 NAME AND COMPLETE ADDRESS
Productivity Manager’s Name and Signature
Department Head’s Name and Signature
We support plain language

COUNTY OF LOS ANGELES QUALITY AND PRODUCTIVITY COMMISSION
21 ST ANNUAL PRODUCTIVITY AND QUALITY AWARDS PROGRAM
“LEADING THE QUEST FOR EXCELLENCE”
FISCAL YEAR 2006-07 APPLICATION
Title of Program or Project (Limited to 50 characters, including spaces):
METLIFE GROUP VARIABLE UNIVERSAL LIFE (GVUL)
Fact Sheet: Describe the Problem, Solution, and Benefits of the project, written in
plain language. The description should identify the link between this project and
your department’s performance measures (Performance Counts! represents the
County of Los Angeles’ focus on building an overall performance measurement
framework for the County). Fact sheet is limited to 3 pages only.
ORGANIZATIONAL GOALS
Service Excellence
Workforce Excellence
Organizational Effectiveness
Fiscal Responsibility
PROGRAMMATIC GOALS
Children and Families’ Well-Being
Community Services
Health and Mental Health
Public Safety
PROBLEM
DHR is responsible for administration of benefits to over 96,000 County employees and
their dependents of which 12,000 are non-represented. As part of its comprehensive
benefits package, the County offers optional group term life (Term Life) to all full-time
permanent employees.
Under Term Life, coverage stops when County employment ends, and for employees
on a long term leave of absence, coverage stops after two years. When coverage
stops, employees may apply for an individual policy with the life insurance carrier.
However, Term Life group rates are not applicable to individual policies and these
policies are very expensive. The premiums for individual policies are age rated and can
be as high as 100% to 200% of the County’s group insurance rates. As an example, an
employee age 60 pays $ .66 a month per $1,000 of coverage under Term Life; but, a
retiree at age 60 pay $51.24 per month for $1,000 under an individual policy. A
$100,000 individual policy would cost $5,124 per month.
SOLUTION
The Chief Executive Office sought a more portable life insurance product and MetLife’s
GVUL product was obtained through a Request for Proposal (RFP) process. In a
collaborative effort, the Department of Human Resources, Chief Executive Office and
the Auditor-Controller implemented a new group variable universal life insurance
insurance program (GVUL) through MetLife, on January 1, 2007 for 12,000 nonrepresented
employees. Enrollment rules and administrative processes were
developed so that by the annual enrollment in October 2006, employees were able to
log onto the County web enrollment system and link to the MetLife web page and enroll
via a single log on. Electronic enrollment, payroll and premium payment files were
developed and tested for successful delivery of benefits in January 2007.
Replacement of Term Life with the new GVUL program was clearly described to
employees in special communications materials. Enrollment packets included a special
insert describing the MetLife GVUL program and investment feature along with easy to
We support plain language

COUNTY OF LOS ANGELES QUALITY AND PRODUCTIVITY COMMISSION
21 ST ANNUAL PRODUCTIVITY AND QUALITY AWARDS PROGRAM
“LEADING THE QUEST FOR EXCELLENCE”
FISCAL YEAR 2006-07 APPLICATION
Title of Program or Project (Limited to 50 characters, including spaces):
METLIFE GROUP VARIABLE UNIVERSAL LIFE (GVUL)
understand “questions and answers,” for employee enrollments. MetLife paid all County
incurred communication costs for the insert.
DHR met a performance counts indicator as a result of the communications efforts
expended. 99% of employees surveyed responded that the enrollment guide provided
relevant information.
BENEFITS
The GVUL program reduced the overall cost of premiums by approximately 25%. The
result is a significant cost savings to both employees and the County. The County
annual savings in 2007 is estimated at $1,000,000.
MetLife GVUL provides an insurance policy that is fully portable . The policy is owned
by the employee and may be kept in force after retirement or termination from County
service, and during long term leaves of absence from work. The GVUL rates are much
more affordable than rates offered under individual life insurance policies, especially for
employees reaching retirement age.
The new program also includes a new optional feature whereby employees may elect to
make contributions to a tax advantaged investment fund. There are 17 variable
portfolios managed by Fidelity, MFS, Putnam, DWS Scudder, T. Rowe Price, and
MetLife and an interest-bearing account with a guaranteed minimum of 4% (currently
crediting 5.1%). There are no surrender charges or penalties for withdrawals made
before age 59½.
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COUNTY OF LOS ANGELES QUALITY AND PRODUCTIVITY COMMISSION
21 ST ANNUAL PRODUCTIVITY AND QUALITY AWARDS PROGRAM
“LEADING THE QUEST FOR EXCELLENCE”
FISCAL YEAR 2006-07 APPLICATION
Title of Program or Project (Limited to 50 characters, including spaces):
METLIFE GROUP VARIABLE UNIVERSAL LIFE (GVUL)
Cost Avoidance, Cost Savings, and/or Revenue Generated (Estimated/Actual Benefit): Use this form
and provide details on the estimated/actual benefits. As a suggestion, work with your fiscal staff.
Cost Avoidance: Anticipated costs that are eliminated or not incurred as a result of program outcomes.
Cost Savings: A reduction or lessening of expenditures as a result of program outcomes.
Revenue: Increases in existing revenue streams or new revenue sources to the County as a result of program outcomes.
(1)
ANNUAL COST AVOIDANCE
(2)
ANNUAL COST SAVINGS
(3)
ANNUAL REVENUE
(1) + (2) + (3)
TOTAL ESTIMATED BENEFIT
$ 0.00
$ 1,000,000.00
$ 0.00
$ 1,000,000.00
Annual Cost Savings
Adoption of the GVUL program reduced the overall cost of premiums by approximately
25% for non-represented employees. Non-represented employees in the MegaFlex
flexible benefit plan pay 50% of premiums and the County pays the other 50%. The
result is a cost savings to both employees and the County.
The cost savings to the County for the County-paid portion of premiums is estimated to
be $1,000,000 for the first year of the program. This is approximately a 25% reduction
from the Term Life premiums paid in 2006.
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