New Disability Plans - PowerPoint Presentation

Slide1

New Disability Plansfor 2017 (949) 824-9765wcdm@uci.edu Slide2

Disability Plans Background

UC currently offers two

types of disability coverage

UC-paid short-term disability coverage (“Short-Term Disability”)

Voluntary, employee-paid supplemental short- and long-term disability plan (“Supplemental Disability”)Only employees with “Full” benefits are eligible for disability coverage Supplemental disability is currently sold as one product; cannot be purchased separatelyFaculty and staff personnel policies provide paid sick leaveUC employees cannot participate in California State Disability Insurance (CA SDI)

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2017 Disability PlansWhat’s changing:Plan design updated to incorporate best practices and improve financial stability – match premiums to benefits paid

Coverage eligibility expanded

to Core and Mid-Level

employeesOptional coverage is called “Voluntary” rather than “Supplemental”Employee has choice to purchase:Only Voluntary Short-term Disability (VSTD)

Only Voluntary Long-term Disability (VLTD)Both VSTD and VLTD Slide4

2017 Disability PlansWhat’s changing:One 14-day waiting period

VLTD will

begin after 6 months rather than one

yearMore generous age limit on VLTD: Social Security Normal Retirement AgeMore generous definitions of disability: VSTD definition based on “own job” at UC

VLTD determination based on “own occupation” for first two years, then “any occupation” Example: “own job” at UCLess restrictiveTakes into account specific job duties that are unique to your job at UC (sedentary vs. more physical)Slide5

2017 Disability PlansWhat won’t change:UC

continues

to provide

basic short-term coverage (Basic Disability) – Up to $800 a month (taxable)Require use of 22 sick days, if available, before benefits commenceUCRP Disability Income offset

UC contribution of medical insurance up to 6 months (Basic Disability period)Slide6

UC Disability Plans and CA SDIUC employees not eligible to participate in CA SDICA SDI is mandatory for all private and certain public employers, as defined in the Unemployment Insurance Code (UIC)In the UIC, UC employees are not included in the definition of state employees eligible for CA SDI

CA SDI is funded entirely by employee contributions

UC provides some short-term benefits at no cost to employees, and gives employees the option to purchase supplemental short-term and long-term disability coverage at reasonable

ratesSDI is short-term coverage only Slide7

UC Disability Plans vs CA SDIUC Voluntary Disability provides stronger benefits than CA SDIHigher percentage of income replacement – 60% vs. 55%Much higher monthly maximum - $15,000 vs. $4,500

Includes option for long-term disabilitySlide8

UC Disability Plans vs CA SDIUC’s short-term coverage costs less for all employeesAll UC employees, regardless of age band or retirement tier,

could enroll in

either

the Voluntary STD or the Voluntary LTD at a rate lower than the 0.9% of income charged by SDI in 2016Many employees can purchase short- and long-term coverage for less than the cost of only short-term coverage under SDIAll UC employees under the age of 49, regardless of retirement tier, can enroll in both the

Voluntary STD and the Voluntary LTD at a rate lower than the 0.9% of income charged by SDI in 2016Slide9

Choice of CoverageSlide10

Summary of New Plan FeaturesUp to $800 MaxUp to $15,000

Up to $15,000Slide11

Short-Term Disability Plan Design

*CA SDI is provided for comparison only; UC employees cannot participate in CA

SDI. SDI is short-term disability only; coverage for 52 weeks

** Based on a 45-49 year old employee in the 1976 Tier making the average UC salary of $79K/year.

Cost for Supplemental STD currently is bundled with LTD; cost shown here is an estimate of the Voluntary STD portion of the bundled rate.

Current

2017

Plan

CA SDI*

Employ

er

-Paid

Benefit

UC-paid Base: 55%

of salary

,

up to

$800/month

Basic:

Same as Current

No

Employer Paid Benefit

Employ

ee

-Paid

Benefit

Supplemental:

70% of salary,

up to $15,000/month

Voluntary

:

60% of Salary, up to $15,000/month

55% of Salary, up to

≈$4,516/month

Waiting Period

Base: 7 days

Suppl: 7, 30, 90, or 180 days

(use 22 days of

sick leave, if accrued)

14 days

(or after 22 days of

sick leave, if available)

7

Days

Employee

monthly cost**

WP………….......7d / 30d / 90d

/ 180d

2017

rates

..…...$63 / $29 / $20 / $13

$28

$59

Contributions

Base: UC paid

Supplemental: Employee

paid

Basic

: UC Paid

Voluntary: Employee Paid

Mandatory

Employee-paid

(0.9% of salary)Slide12

Long-Term Disability Plan Design

Current

2017 Plan

Benefit

5

0% to $15,000/month

(up to 70% if

eligible for

UCRP Disability or other income)

60% to $15,000/month

Employee

monthly cost*

2017 rate:

$34**

$20

Waiting period

12 months

6 months

Maximum

duration

Age 65

Social

Security Normal Retirement Age

Definition of disability

Any

-

occupation

24

month own-occupation,

then any-occupation

Contributions

Employee paid

Employee paid

Based

on a 45-49 year old employee in the 1976 Tier making the average UC salary of $

79K/year who chose 7 day waiting period.

** Cost for LTD currently is bundled with Supplemental STD; cost shown here is an estimate of the LTD portion of the bundled rate.Slide13

One Time Opportunity! The new Voluntary Disability plans are available during open enrollment. (Coverage effective beginning 1/1/2017)Employees who are currently enrolled in Supplemental Disability and who make no active selection during OE will be enrolled in both VSTD and VLTD for 2017

Benefits will be based on the date of disability

Example: An employee with a disability date of 12/22/16 and a 30-day waiting period will receive 2016-level benefits, not 2017

2017 TransitionSlide14

Only during open enrollment there is no statement of health neededIf no enrollment into the plan during open enrollment, may apply at any time but a statement of health (EOI) will be required and subject to approval by Liberty Mutual.

No Evidence of Insurability RequiredSlide15

In general, employees with lower salaries and shorter waiting periods will have lower premiums under new design than currently.Example 1: 34-year old staff member with $50K annual salary currently purchasing Supplemental Disability with 7 day waiting period (2013 Tier)Example 2: 34-year old staff member with $

5

0K annual salary currently

purchasing Supplemental Disability with 30 day waiting period (2013 Tier)Note: Status-Quo is potential 2017 premium if there were no plan changes 2017 Monthly

Premium Rates2017 Status-Quo Premium2017 VSTD Rate2017 VLTD RateTotal 2017 Premium$ Change$52$13$5$18-$342017 Status-Quo Premium2017 VSTD Rate2017 VLTD RateTotal 2017 Premium$ Change$19$13$5$18+$1Slide16

Faculty eligible for medical leave and staff with large sick leave accruals may choose not to purchase Voluntary STD and could buy Voluntary LTD only.Example 3: 56-year old staff member with $125K annual salary currently purchasing Supplemental Disability with 180-day waiting period and 1100 hours of sick leave accrued (1976 Tier)

2017

M

onthly

Premium Rates2017 Status-Quo Premium2017 VSTD Rate2017 VLTD RateTotal 2017 Premium$ Change$80Not needed$54$54-$26Slide17

One time opportunity to enroll in VSTD (6 months), VLTD (after 6 months up to SS retirement age) or bothNo statement of health needed during open enrollmentUC’s Basic Disability, provides benefits of only up to $800/month taxable for 6 monthsEnrollment in VSTD and VLTD provides most comprehensive coverage

VSTD and VLTD will pay 60%, up to $15K

One waiting period: 14 days, use 22 sick if available

If enrolled into supplemental disability & take no action, will automatically be enrolled in both VSTD & VLTDOpen Enrollment ends at 5pm on Tuesday, November 22 What do I need to remember?Slide18

2017 Disability and Life insurance premium estimatorhttp://ucnet.universityofcalifornia.edu/compensation-and-benefits/disability-life-accident/premium-estimator-2017.php

Disability FAQ’s

http://

ucnet.universityofcalifornia.edu/oe/faq/disability-faq.html Open Enrollment Websitehttp://ucnet.universityofcalifornia.edu/compensation-and-benefits/disability-life-accident/disability/index-2017.html

ResourcesQUESTIONS???