The University Record, June 5, 2000

Long-term disability plan rate increases

By Vivian Byrd
Human Resources/Affirmative Action

The long-term disability (LTD) rate will increase 5 percent, effective July 1.

“LTD rates have not increased since 1997,” says Bonnie Marttila, supervisor of the University’s long-term disability program. “However, the number of people receiving benefits through the plan has doubled in the last eight years. In addition, the plan continues to be under-reserved, which means that there are insufficient assets to pay future disability benefits of currently disabled participants.”

And while the Benefits Office continues to close the gap on the reserve through early intervention and medical case management measures, the current underfunding necessitates a rate increase.

The 5 percent rate increase (see chart at bottom of page) will be reflected in deductions taken in monthly and bi-weekly paychecks issued on June 30.

For the expanded and physicians plans, the University pays the premium for the first $30,000 of annual base salary for faculty and staff (1) after they have completed four years of continuous service and have a 50 percent or greater appointment lasting eight months or longer; or (2) after five years of continuous service and less than a 50 percent appointment lasting eight continuous months or longer.

The expanded and physicians plans are elected coverage that is (1) all employee-paid during the first four years; and (2) all employee paid in excess of $30,000 salary after four years. The basic plan is all University-paid.

The following examples show how the rate increase would affect a hypothetical faculty or staff member in the expanded plan who earns $48,000 per year.

  • If the faculty or staff member has less than four years of service, he or she will pay an additional $1.72 per month for this coverage, effective July 1.

    1999 LTD rate: $48,000/$1,000 x $8.68/12 months = $34.72 per month

    2000 LTD rate: $48,000/$1,000 x $9.11/12 months = $36.44 per month

  • If the faculty or staff member has more than four years of service, he or she will pay an additional $.64 per month for this coverage, and the University will contribute an additional $1.08 per month, effective July 1. The University pays the full cost of the first $30,000 of coverage, and the faculty or staff member pays the cost of coverage in excess of $30,000.

    Staff Member’s Cost (pays for coverage on salary between $30,000 and $48,000):

    1999 LTD rate: $18,000/$1,000 x $8.68/12 months = $13.02 per month

    2000 LTD rate: $18,000/$1,000 x $9.11/12 months = $13.66 per month

    University’s Cost (pays for coverage on salary up to $30,000):

    1999 LTD rate: $30,000/$1,000 x $8.68/12 months = $21.70 per month

    2000 LTD rate: $30,000/$1,000 x $9.11/12 months = $22.78 per month

    Individuals with questions about the rate increase should contact the Benefits Office, (734) 763-1214.

    Plan1999 Rate per $1,000
    of Covered Annual Salary
    2000 Rate per $1,000
    of Covered Annual Salary
    Basic$20.03$21.03
    Expanded$8.68$9.11
    Physicians$8.68$9.11