The University Record, April 4, 1994

Long-term disability rates increase

Rate increases for long-term disability coverage that will affect departmental and/or staff member costs went into effect April 1.

According to Craig Jorgeson, manager, Benefits Office, the increase was prompted by a 50 percent increase in the number of disabled individuals receiving benefits in the last two to three years.

Prior to 1990, Jorgeson says, “the plan had unusually good experience—the number of people becoming disabled each year was quite low. Therefore the cost was kept well below the national average for a plan of this type.

“Because of the increased pressure of new cases,” Jorgeson says, “the plan is under-reserved, which means that there are not sufficient funds to pay present and future disability plan costs.”

The basic plan is available only to bargained-for staff, except nurses, IUOE and trades, as specified by their contracts, and is paid for by the University.

Under the basic plan, individuals who become totally disabled can receive 50 percent of their salary up to a maximum of $1,200 per month. For individuals who qualify for income from a public source, such as Social Security, cash benefits from the basic plan are coordinated with the benefits from the public source. Together, the cash benefits from the University and public program cannot exceed 75 percent of an individual’s pre-disability base salary. (For AFSCME staff, the pre-disability net monthly base income is used for coordination if it is less than 75 percent of the individual’s pre-disability base salary.)

The expanded long-term disability plan is available to faculty (except for supplemental staff), primary, professional and administrative, executive officers, office staff, technical, nurses, trades, IUOE and MAP. Individuals who become totally disabled are paid up to 65 percent of their pre-disability salary. Benefits are reduced dollar-for-dollar when income is received from public sources, such as Social Security.

The benefits an individual is participating in at the time of disability are continued at no cost to the individual under both plans.

Employees who are covered by the expanded plan and who will be affected by the increase, will see a notice on their end-of-month March pay stub (monthly) or their second April pay stub (if paid biweekly).

Jorgeson advises staff members who may want to drop their long-term disability coverage to call the Benefits Office, 763-1214, to discuss the impact of their decision before making arrangements to cancel the coverage.