New Disability Plans for 2017 (949) 824-9765 wcdm@uci

New Disability Plans for 2017 (949) 824-9765 [email protected]

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 separately Faculty and staff personnel policies provide paid sick leave UC employees cannot participate in California State Disability Insurance (CA SDI) 2

2017 Disability Plans What’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 employees Optional 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

2017 Disability Plans What’s changing: One 14-day waiting period VLTD will begin after 6 months rather than one year More generous age limit on VLTD: Social Security Normal Retirement Age More 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 UC Less restrictive Takes into account specific job duties that are unique to your job at UC (sedentary vs. more physical)

2017 Disability Plans What 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 commence UCRP Disability Income offset UC contribution of medical insurance up to 6 months (Basic Disability period)

UC Disability Plans and CA SDI UC employees not eligible to participate in CA SDI CA 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 rates SDI is short-term coverage only

UC Disability Plans vs CA SDI UC Voluntary Disability provides stronger benefits than CA SDI Higher percentage of income replacement – 60% vs. 55% Much higher monthly maximum - 15,000 vs. 4,500 Includes option for long-term disability

UC Disability Plans vs CA SDI UC’s short-term coverage costs less for all employees All 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 2016 Many employees can purchase short- and long-term coverage for less than the cost of only short-term coverage under SDI All 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 2016

Choice of Coverage

Summary of New Plan Features Up to 800 Max Up to 15,000 Up to 15,000

Short-Term Disability Plan Design Current 2017 Plan CA SDI* Employer-Paid Benefit UC-paid Base: 55% of salary, up to 800/month Basic: Same as Current No Employer Paid Benefit EmployeePaid 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) Employee monthly cost** WP .7d / 30d / 90d / 180d 2017 rates . . 63 / 29 / 20 / 13 28 59 Base: UC paid Supplemental: Employee paid Basic: UC Paid Voluntary: Employee Paid Mandatory Employee-paid (0.9% of salary) Contributions 14 days (or after 22 days of sick leave, if available) 7 Days *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.

Long-Term Disability Plan Design Current 2017 Plan 50% to 15,000/month (up to 70% if eligible for UCRP Disability or other income) 60% to 15,000/month 2017 rate: 34** 20 12 months 6 months Age 65 Social Security Normal Retirement Age Definition of disability Any-occupation 24 month own-occupation, then any-occupation Contributions Employee paid Employee paid Benefit Employee monthly cost* Waiting period Maximum duration 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.

2017 Transition 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

No Evidence of Insurability Required Only during open enrollment there is no statement of health needed If 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.

2017 Monthly Premium Rates 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) 2017 Status-Quo Premium 52 2017 VSTD Rate 2017 VLTD Rate 13 5 Total 2017 Premium 18 Change - 34 Example 2: 34-year old staff member with 50K annual salary currently purchasing Supplemental Disability with 30 day waiting period (2013 Tier) 2017 Status-Quo Premium 19 2017 VSTD Rate 2017 VLTD Rate 13 5 Total 2017 Premium 18 Note: Status-Quo is potential 2017 premium if there were no plan changes Change 1

2017 Monthly Premium Rates 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 Status-Quo Premium 80 2017 VSTD Rate 2017 VLTD Rate Not needed 54 Total 2017 Premium 54 Change - 26

What do I need to remember? One time opportunity to enroll in VSTD (6 months), VLTD (after 6 months up to SS retirement age) or both No statement of health needed during open enrollment UC’s Basic Disability, provides benefits of only up to 800/month taxable for 6 months Enrollment 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 & VLTD Open Enrollment ends at 5pm on Tuesday, November 22

Resources 2017 Disability and Life insurance premium estimator http:// ucnet.universityofcalifornia.edu/compensation-and-benefits/disability-life-accide nt/premium-estimator-2017.php Disability FAQ’s http://ucnet.universityofcalifornia.edu/oe/faq/disability-faq.html Open Enrollment Website http:// ucnet.universityofcalifornia.edu/compensation-and-benefits/disability-life-accide nt/disability/index-2017.html QUESTIONS?