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HomeMy WebLinkAbout4.08 Provision of LTD Insurance N �CITY OF DUBLIN �0 0- AGENDA STATEMENT CITY COUNCIL MEETING DATE: October 28, 1985 SUBJECT Employee Benefits - Provision of Long Term Disability Insurance EXHIBITS ATTACHED Proposal submitted by Mutual Benefit Life; Resolution authorizing Staff to obtain long term disability benefits ; Exhibit A, Comparison of Key Factors in Proposals RECOMMENDATION Adopt Resolution and authorize Staff to proceed with the enrollment of eligible employees FINANCIAL STATEMENT: Premium cost fully paid by the City is . 71% of the insured payroll. Estimated annual cost based on the current composition is $2, 700. DESCRIPTION At the regular City Council meeting on September 9, 1985, the Council adopted Resolution No. 99-85. This resolution established the salary and benefit plan for City employees. Section C of this resolution outlines the provision of disability insurance for each of the full-time employees. As with several of the other insurance related benefits, it has been difficult for the City Staff to obtain proposals for this type of insurance. Given that the City' s current number of full-time employees has expanded to 13 employees, Staff has obtained and reviewed proposals submitted by Mutual Benefit Life and Standard Insurance Company. Currently, the City employees ' only protection against income loss in the case of a long term disability would be through the accrual of general leave. Full-time employees accrue general leave at a rate approximately equal to 20 days per year. Department Heads accrue at a rate equal to 22 days per year. This leave is not restricted and the employee is encouraged to retain an adequate leave balance to protect against unanticipated absen- ces. The current personnel rules allow an employee to accrue a maximum leave balance of 360 hours. This is equivalent to approximately 45 working days. When Staff solicited proposals for long term disability (LTD) insurance, an attempt was made to assure that the waiting period would correlate with the maximum leave accrual allowed. Therefore, the proposals provided an insurance benefit after 60 days of disability. Staff has met with all of the affected employees and discussed the options available for the provision of this benefit. Although the Standard proposal offers a higher benefit level ( 66 2/3% vs 60%) , there were several advantages offered by the Mutual Benefit Life proposal. This includes the fact that the Mutual plan would define an individual as disabled for 3 years provided that they were unable to perform in their current occupation. The Standard proposal only applies this definition for the first 2 years in which benefits are paid. The Mutual plan also offers the ability to convert upon termination. The City will recognize a small premium savings under the Mutual plan as compared to the Standard proposal. In addition, the Mutual plan proposal was developed by Mr. Scott Terpstra of Equitable Benefits Company. This company currently operates as the administrator for the ABAG Dental Trust of which the City is a member. Mr. Terpstra has indicated that it will be possible to bill for both the dental and the disability insurance on one invoice. He has also noted that in the future, it may be possible to transfer this coverage to the ABAG Benefits Trust at such time as they agree to include disability insurance in the types of coverage offered by ABAG. Based on the cost effectiveness, benefit features and administrative requirements, Staff recommends that the City Council adopt the resolution ' authorizing participation in Mutual Benefit Life Long Term Disability Program and direct Staff to proceed with the necessary enrollment procedures for eligible employees. ---------------------------------------------------------------------------- COPIES T0: ITEM N0. Tailored Group Program For: CITY OF DUBLIN Presented By: SCOTT TERPSTRA Mutual Benefit Life 16474-1(M,) Newark, NJ&Kansas City, MO I� MUTUAL BENEFIT LIFE-THE COMPANY FOUNDED 1845 in Newark, NJ. ADMITTED All fifty states and the District of Columbia. RATING Highest rating, A+, (1984 Rating) from A.M. Best Company, Inc. an independent authority which rates insurance companies based on their financial strength and.operating performance. SIZE 11th largest mutual life insurance company in admitted assets. ASSETS AND $7,898,157,388 at the end of 1983 LIABILITIES GROUP SALES Annapolis, Atlanta, Boston, Chicago, Cincinnati, Cleveland, Dallas, Denver, OFFICES Detroit, Grand Rapids, Houston, Kansas City, Los Angeles, Miami, Minneapolis, New Orleans, New York, Philadelphia, Pittsburgh, San Francisco, Seattle, St. Louis. GROUP CLAIMS Allentown, PA, Atlanta, GA, Dallas,TX, Indianapolis, IN, Kansas City, MO, OFFICES Minneapolis, MN, Newark, NJ, San Diego, CA,Thousand Oaks, CA. HOME OFFICES Kansas City, MO and Newark, NJ. t "Dedicated to the responsible and equitable treatment of policyholders" The Group Insurance Division of Mutual Benefit Life is pleased to announce a new service being offered to our group insurance policyholders located outside the Metropolitan Kansas City area and within the Continental United States. Mutual Benefit Life group policyholders may call us toll free with any questions or problems they may have concerning billing statements or other matters related to the administration of their group insurance plan. We will be able to help you with such topics as billing statements; employee enroll- ments; changes and terminations; beneficiary changes and absolute assign- ments; certificate materials; group life and major medical conversions; premium remittances; lapse notices or other administrative subjects. -To call us TOLL FREE from anywhere in the Continental United States (except Missouri) please dial 1-800-523-6439 between the hours of 8 a.m. and 4 p.m. Central Standard Time, Monday through Friday. Although we hope you find this service both convenient and beneficial, we encourage you to maintain your relationship with your insurance represent- ative. r Mutual Benefit 1647G-3(5-84) Life 11588 G-3 TRANSFERRED COVERAGE This proposal has been designed to comply with the requirements of the model regulation of the National Association of Insurance Commissioners (NAIC) and certain state laws, with respect to transferred group coverage. Mutual Benefit intends that covered employees will not lose their protection because of the termination of current coverage and transfer to Mutual Benefit. This proposal is based on the assumption that the current insurance carrier will continue coverage on any insured individual who is disabled on the date the existing contract terminates(even if it terminates while a disabled person is satisfying any applicable waiting period). If we are replacing existing coverage, we need a copy of either the plan document or certificate, along with full claims information if not previously furnished. ' r,S z JIIISTR TIU, CL�ir � � �I tW l lU(r (� 'r , n ,r1r T, n n r n AND r,-r;., ;,•r, 7). jL L,I�"►) FUR 14"A.-IOR i-EDIC�+L CuTtPnCt w+D DNG ►t1' I�` IUTY CC''L 4 ARE PAID BY CJ CL�II� OFFICE IId SOI,► 1Er,i' C};LIFONMIIA, 1529 EAST THOU'r4Z Oars BI_�.O, SU I TP- 23=4 T I i 0 USA.I0 OAKS, CA 9Lv0 Mutual Benefit ,8476-7(8.81) Life 1erl7aza(8.81; H4 11592 A TAILORED GROUP INSURANCE PROGRAM ❑ Term Life Insurance ❑ Medical Conversion Privilege ❑Accidental Death & Dismemberment ID Long Term Disability Insurance ❑ Dependent Life Insurance ❑ LTD Cost of Living Adjustment ❑ Survivor's Income Benefit ❑ LTD Pension Supplement ❑ Additional Contributory Life ❑Executive "No-Offset" Long Term Insurance Disability Insurance ❑ Elective LifE Insurance ❑Loss of Time Insurance (Short Term Disability) ❑ Voluntary Accidental Death & Dismemberment ❑ Benetalk Costs, amounts of insurance and benefit features are found on the Highlights pages. Fuller descriptions of the coverages are found in the coverage sections. Eligible Employees: All active full-time salaried employees working a minimum of thirty hours per week, except for temporary employees. Any eligible employee who is not actively at work on his or her regular schedule at his or her usual place of business on the day he or she would otherwise be insured will not become insured until the day he or she returns to active work on his or her regular schedule at his or her usual place of business. Rates, premiums and the guaranteed issue limit on the effective date of the plan will reflect any changes in the factors,on which this proposal is based. These factors include the benefit schedule,the industry; the distribution of employees by earnings and/or job classification, age and sex: and changes required by state regulations. The rates and premiums may be increased (with respect to amounts subject to evidence of insurability) if medically impaired risks are identified. This proposal expires 90 days from September 1 1 , 1999 unless renewed. Policies are issued on Policy Form No. GP-81. Mutual Benefit Life I647G•616•NU M IE nS� LONG TERM DISABILITY HIGHLIGHTS BENEFIT SCHEDULE 60% of basic monthly-earnings to a maximum benefit of $3,500 per month. BENEFIT PERIOD Accident, Sickness or Pregnancy ® Age 65/70' ❑ Other 'Our standard benefit period has been designed to comply with ADEA. See Proposal page LTD-6 for complete explanation. SOCIAL SECURITY INTEGRATION ❑ Primary Direct Offset, 1/2 Dependent included.in 70% Monthly Payment Limit ❑ Primary and Dependent Direct Offset ® Primary and Dependent included in 70% Monthly Payment Limit QUALIFYING PERIOD Qualifying Period: Two months Qualifying Period Interruption—A return to full-time work of up to the following number of working days will not necessitate a new qualifying period. Qualifying Period Interruption 1 month 3 working days 2-4 months 5 working days 5+ months 10 working days Also, a return to limited employment while totally disabled will not affect the Qualifying Period. COST: Based on 11 employees. Covered Monthly Payroll $ 26,561 x Monthly Premium Rate .71% =LTD Monthly Premium $ 188.58 Mutual Benefit 1647G•13 f1•64f Life tt598 H'7 LONG TERM DISABILITY HIGHLIGHTS SPECIAL FEATURES • Definition of Disability: • Rehabilitation Benefit A. "Own Occupation" definition •KI Survivors Benefit: ® 3 Months for 16 months . ❑ 6 Months ❑ Months B. so % Earnings Test • Automatic Dovetail with Mutual Benefit • Lifetime freeze re Social Security and Loss of Time Plan many other Benefits •❑ Pension Supplement • ❑ Evidence of Insurability' • LTD Conversion Privilege • ®6/6/Pre-existing Conditions •❑ COLA Provision Limitation' Increase: Lesser of CPI% or❑ 3% • ❑ No Evidence or Pre-existing ❑ 4% ❑ 5% or [16% Conditions Limitation Maximum Duration: ❑ 5 Years [1 10 Years ❑ Unlimited 'See "Transferred Coverage" page if proposed plan would replace existing group insurance. *Rates quoted assume there have been no claims paid by prior carriers during the past three years. Non-Contributory Discount of 20 % applied. ❑ Contributory % Participation Required. ABOUT RATES Long Term Disability rates are based on the characteristics of each group: the type of employee covered, the industry and, in the case of larger groups, claim experience. The policyholder has the choice of maximizing cash flow through "pooled" rates or by having the net cost determined by the dividend calculated after the experience period. The rates quoted under "COST" (Page H-7) are Z] 100% pooled ❑ case experience dividend. Rates are guaranteed for ❑ one year T.1 two years unless plan provisions are revised or the size of the group changes substantially. See Long Term Disability Section for more information on benefit provisions. Mutual Benefit 7647G•14(1-84) Life 11599 H-8 LONG TERM DISABILITY BENEFITS LTD provides a monthly benefit for insured employees who become totally disabled by accidental bodily injury, sickness or pregnancy. WHY LTD? It gives the employer: •an established personnel practice that is a budgetable expense •relief from the possibility of paying salaries to disabled employees •generally favorable tax treatment as contributions are usually treated as an ordinary and necessary business expense (IRS Regulation 1.162-10) It gives the employee: •the security of knowing that benefits will be provided in the case of total disability •benefits for a substantially greater period of time than short term loss of income insurance or salary continuance plans. SALARY A word about Salary Continuance... CONTINUANCE A well designed program will replace a substantial part of the disabled PLAN person's income, but not all—to assure that he or she has an incentive to return to work. Few employers want to pay LTD premiums so that an employee will receive more income when absent than when on the job. Therefore, if any part of disabled employees'earnings are to be continued beyond the LTD qualifying period, please contact your Mutual Benefit group representative. The proposed LTD plan.and rates can then be adjusted to integrate with your salary continuance program. Mutual Benefit Life 1647G•29(1.83) 11614 LTD-1A AMOUNT OF The amount of monthly benefit is equal to the Schedule Benefit but BENEFIT subject to the Monthly Payment Limit. MINIMUM The minimum monthly benefit of$50 is payable regardless of income or BENEFIT benefits received from other sources. 1. SCHEDULE The insured's Schedule Benefit is determined by multiplying his or her BENEFIT monthly earnings by the benefit percentage. The result cannot exceed the maximum monthly benefit. The term monthly earnings is defined as the insured's monthly rate of earnings from the employer excluding commissions, overtime pay, bonuses or other special compensation which is not received as basic wages or salary. For hourly employees, monthly earnings will be determined on the basis of the regularly scheduled work week of at least 30 hours but not more than 40 hours. Mutual Benefit 11618 Life 11616 3(8.81) FFMPL LTD-2B.1 AMOUNT OF BENEFIT 2. MONTHLY If the Schedule Benefit plus the payments from the sources listed PAYMENT below is more than 70% of the person's monthly earnings, the excess is LIMIT subtracted from the Schedule Benefit to determine the benefit payable. • Disability benefits received under any other group insurance plan. • Any salary, wages, commissions or similar remuneration the disabled person receives or is entitled to receive from gainful employment. (Exception: See "Rehabilitation" page.) • Primary and dependent disability benefits provided under Social Security. Dependent benefits are not included if the insured is divorced and the dependent benefits are being paid to the divorced spouse or children. • Disability benefits received under a Workers' Compensation Act, any non-occupational disability benefit law, the Maritime Doctrine of Maintenance, Wages and Cure or similar legislation. • Disability benefits (employee benefits only) provided under the United States Railroad Retirement Act or any law of the United States, Canada, or any state, province or political subdivision thereof. • Unless prohibited by state law, any disability benefits provided as basic reparation under a state's "no-fault" motor vehicle law, other than one which determines its benefits after the disability benefits provided by this plan have been paid or are payable. • Retirement benefits or disability benefits that are paid or due from a retirement plan for which the employer or an associated company pays, directly or indirectly, all or a portion of the cost. • Social Security retirement benefits. Payments or benefits from Profit-Sharing Plans, Thrift Plans, Individual Retirement Accounts, Tax Sheltered Annuities, Stock Ownership Plans, and Deferred Compensation Plans will not be considered in determining Long Term Disability Benefits. Retirement benefits (other than Social Security benefits).which represent employee contributions and retirement benefits from plans (other than Social Security) paid for wholly by the employee will also not be considered. If a lump sum payment is received from any source described in the Monthly Payment Limit, it may be allocated as though the insured had received it on a periodic basis. Mutual Benefit Life 1647G-41(1-84) 11626 FFMPL 50 LTD-4C.1. BENEFIT COMPARISON: FULL FAMILY UNDER MONTHLY PAYMENT LIMIT $2,000 . $4,000 S6,000 MONTHLY MONTHLY MONTHLY EARNINGS EARNINGS EARNINGS 1. SCHEDULE BENEFIT 60% of earnings S1,200 $2,400 $3.600 2. MONTHLY PAYMENT LIMIT (MPL) 70% of earnings 1,400 2,800 4,200 3. Primary and Dependent Social Security' 975 1,087 1,087 4. SCHEDULE BENEFIT PLUS OTHER SOURCES SUBJECT TO MPL" (1) + (3) 2.175 3,487 4,687 5. Excess over MPL=(4) —(2) 775 637 487 6. LTD NET BENEFIT PAYABLE (1)—(5) 425 1,713 3,113 TOTAL MONTHLY BENEFITS Long Term Disability S 425 51,713 $3,113 Primary Social Security 650 725 725 Dependent Social Security' 325 362 362 Total $1,400 (70°0) S2,800 (70%) S4,200 (70 9,0) `Assumes two dependents '"Assumes no income from other sources subject to MPL. Mutual �n2f if Life ,6470.35 15•a31 1630 LTD-5c QUALIFYING The Qualifying Period is specified on the LTD Highlights page. The PERIOD Qualifying Period is the time a person must be totally disabled before benefits are payable. A Qualifying Period must be satisfied for each separate period of total disability. Return to Full-Time Work During the Qualifying Period A new Qualifying Period will not be required, if an insured who was totally disabled returns to full-time work for a limited period, and then again becomes disabled from the same or a related cause, provided the return to work is not longer than the Qualifying Period Interruption specified on the LTD Highlights page. Limited Employment The Qualifying Period will not be affected by limited employment.while totally disabled—see Definition of Total Disability. BENEFIT Benefits are payable for the following durations after the satisfaction of PERIOD the Qualifying Period, provided the insured remains totally disabled and furnishes satisfactory proof of disability as required. Disability Commencing Maximum Benefit Period Prior to 60th birthday to 65th birthday Between 60th and 65th birthdays 3 years or to 65th birthday, whichever is longer After 65th and before 70th birthday 2 years, but not beyond 70th birthday The foregoing approach satisfies the Age Discrimination in Employment Act, in accordance with EEOC rules. WAIVER OF. . Premiums are waived after the Qualifying Period is satisfied. PREMIUM Mutual Benefit Life 1647-90 11 (1�) LTD-6 DEFINITION OF A. Occupation Test TOTAL DISABILITY An insured person is considered totally disabled if: • unable to perform the material duties of his or her regular occupation or employment and under the regular care of a licensed physician other than him(her)self during the first 36 months of total disability • unable to perform the material duties of any and every gainful occupation or employment for which he or she is or may become reasonably fitted by training, education or experience after the first 36 months of total disability. The total disability will not be interrupted by limited employment while the above requirements are met. OR ; B. Earnings Test If an insured person is working and is not disabled as defined in "A' above, we will consider the person to be totally disabled during any period of time the person is incapable of earning more than 8o 0% of his or her Monihiy Earnings due to injury, sickness or pregnancy. The earnings will be determined by wages, salary, commissions and similar pay from any gainful work (including partnership profits, when applicable), whether paid in regular installments or in a lump sum. A lump sum payment will be pro-rated over the period of time for which the payment accrued. If the pro-rated amount plus other earnings exceed the Earnings Test percentage, the insured will not be considered disabled for that period of time. Mutual Benefit Life 16A7GJ711-641 1163-1 LTD-6A t GENERAL FREEZE Monthly payments to disabled insureds will not be reduced by any statutory or cost of living increases in Social Security benefits after monthly benefits have started. This freeze also applies to retirement plans and to benefits under state cash sickness plans, the U.S. Railroad Retirement Act, the Canadian Pension Plan, Workers Compensation, and the Maritime Doctrine of Maintenance, Wages and Cure. LIMITATIONS: Limited benefits are payable for disability caused by nervous or mental • ALCOHOLISM diseases or disorders, alcoWism, drug addiction or chemical MENTAL & dependency. NERVOUS 1. Benefits will be payable for a total of 2 years (lifetime) for disability resulting from all such conditions while not hospital confined. 2. Benefits are also payable while the individual is hospito confined for such a condition, provided the confinement starts: • during the 2 year period described above, or • within 6 months after an earlier confinement in a hospital for which the person received benefits. In addition, if the individual • ceases to be totally disabled • returns to work • again becomes totally disabled, and • establishes a new period of total disability, he or she will be entitled to benefits during a hospital confinement which starts before the end of the 3 month period after the Qualifying Period ends. EXCLUSIONS No benefits are payable for that portion of any period of disability when the disabled person is confined in a penal or correctional institution as a result of conviction for a criminal or other public offense. No benefits are payable for any disability caused by: • any act of war, whether declared or undeclared; or • intentionally self-inflicted injury of any kind, while sane or insane ("sane or insane"does not apply to Missouri and New York groups); or • panicipation in the commission of an assault or felony ("assault" does not apply to Minnesota, New Jersey and New York groups). �@f1@ftft ate w.�o v nJ�i LTD.7A +e.» LIFETIME SOCIAL Monthly payments to disabled insureds will not be reduced by any SECURITY statutory or cost of living increases in Social Security benefits after FREEZE monthly benefits have commenced. This freeze also applies to plans designed primarily to provide retirement benefits to public employees and to benefits under the U.S. Railroad Retirement Act. LIMITATIONS: Limited benefits are payable for disability caused by nervous or mental ALCOHOLISM diseases or disorders or by alcoholism. MENTAL & 1. Benefits will be payable for a total of two years (lifetime) for NERVOUS disability resulting from all such conditions while not hospital confined. 2. Benefits are also payable while the individual is hospital confined for such a condition, provided the confinement starts: •during the two year period described above,or •within six months after an earlier confinement in a hospital for which the person received benefits,or •not more than three months after satisfying the Qualifying Period. EXCLUSIONS No benefits are payable for that portion of any period of disability when the disabled person is confined in a penal or correctional institution as a result of conviction for a criminal or other public offense. No benefits are payable for any disability caused by: •any act of war,whether declared or undeclared;or •intentionally self-inflicted injury of any kind,while sane or insane;or • participation in the commission of an assault or felony; or • drug addiction or chemical dependency. Mutual Benefit Life 1647G-53(8-81) 11638 Hospital Cases LTD-713 LIMITATIONS PRE-EXISTING No benefits are payable for any disability caused by a pre-existing CONDITIONS condition, which means any accidental injury, sickness or pregnancy, or a related injury or sickness, for which the insured consulted a licensed medical or dental practitioner or received any medical care, treatment or service within the ;six month period before becoming insured. A condition will no longer be considered pre-existing after the disabled person has been actively at work at his or her usual place of business for at least one full day following the expiration of: (a) a sire consecutive month period during which the insured has not consulted with a licensed medical or dental practitioner or received any medical,care, treatment or service for such injury, sickness or pregnancy or a related injury or sickness, or (b) a period of 24 _ consecutive months during which the person is continuously insured. TRANSFERRED For employees insured under your group long term disability policy with COVERAGE another insurer on the day before the effective date of the Mutual Benefit policy, benefits for conditions otherwise excluded by the above provision will be provided at the lesser of: (a) the benefits of this plan without the above pre-existing condition limitation, or (b) the benefits of the replaced plan with its pre-existing condition limitation. Mutual Benefit 1647G-57(1'84) Life 11642 LTD-8B.1 SUCCESSIVE Successive periods of disability due to the same or related causes: PERIODS OF • shall be treated as one period of disability and will not require a new DISABILITY Qualifying Period if separated by less than 6 months of active, full- time work. • shall be treated as separate disabilities and wil! require a new Qualifying Period before benefit payments resume, if separated by 6 months or more of active, full-time work. • Successive periods of disability due to entirely unrelated causes: • shall be treated as one period of disability and will not require a new • Qualifying Period unless separated by a return to active, full-time work. • shat; be treated as separate disabilities and will require a new Oualttyinc Period before benefit payments resume, if•separated by at least one day of active, full-time work. EXTENDED If a person is totally disabled when his or her insurance terminates and BENEFIT is entitled to benefits for disability (or would be entitled after the Qualifying Period ends), benefits will be payable during the unimierrupted continuance of that total disability, as though the insurance had not terminated. Mutual Benefr Life LTD. SOCIAL SECURITY DISABILITY AWARDS MUTUAL BENEFIT CLAIMANTS As of April 1 , 1983. :' Percentage of Claimants Claim Duration ADVroved SS Benefits (Months) 59% 6 - 11 64 12 - 23 72 24 - 35 77 36 - 47 ' 79 48 - S9 82 60 - 71 86 72 - 83 91 84 - 77 All Claims rove ned H.R. . 7093 which There has been two recent Actions should improve this situation. First , Reagan requires face-to-face interviewsof rrecofordcontinued of benefit terminations . the second appeal stage . benefit payments throng second appeal stag . second The se Benefits have been secrein e stated to all claimantsn district had not reached t a wester action was a recent court decision by tated to all court . The court ordered benefitsaseanresult of this claimants who had been Maims review , pending further special Social Security If followed claimants . in other district h procedures . review of te courts , this could reinstate benefits for many REHABILITATION Disability benefits will be provided while the insured person is engaged in Rehabilitative Employment if the person remains totally disabled. The person must remain under the regular care and attendance of the physician. Rehabilitative Employment means work on a limited basis as part of a plan of rehabilitation recommended and supervised by a licensed physician. Its goal is to return the insured to full-time gainful employment. Only 70%of the income that the disabled person receives, or is entitled to receive, from Rehabilitative Employment will be subject to the Monthly Payment Limit (an all source maximum). Although Rehabilitative Employment may begin during the Qualifying Period, disability benefits will not be paid until after the end of the Qualifying Period. Benefits will be paid up to the Maximum Benefit Period. The Rehabilitative Employment may be at the insured's own or another occupation or employment. In addition to the contractual benefit described above, Mutual Benefit may assume an active role in the rehabilitation of disabled individuals who need help in order to return to full-time or limited employment. Individuals whom we believe have potential for success, can be offered assistance in the design and implementation of practical plans of vocational rehabilitation. Mutual Benefit's active involvement in the rehabilitation process is a method of cost containment. It assists claimants to become self- supporting and productive members of society. Everyone benefits, including the employer. Mutual Benefit 1674G-60(1-84) Life 11645 50 LTD-10A / / / -_�, FORUM,I), on A publication of International Rehabilitation Associates, Inc. Rehabilitation Services of Canada Customer Edition Volume 8, No.5 May 1981 Kay Beidell, R.N.Editor REHABILITATION: AN A CTI VE PROGRAM A T MUTUAL BENEFIT LIFE by Patti Mulvihill L TD Rehabilitation Specialist Rehabilitation, especially the rehabilitation of long term Benefit consequently experienced a significant financial disability claimants, is relatively new to the Insurance In- savings. dustry. We at the Mutual Benefit L fe Insurance Company In February of 1978, Mutual Benefit Life implemented a have been actively involved in the rehabilitation of our fully operational Rehabilitation Program. The goal of our long term disability claimants for over four years now. Our Program is to assist disabled claimants to return to work efforts have proven fruitful. Rehabilitation holds the pro- they can handle in spite of the restrictions imposed on mise of a brighter tomorrow for many of our claimants. them by their disabilities. We employ several professional Mutual Benefit Life has long recognized the importance rehabilitation agencies including International Rehabilita- of rehabilitation. A rehabilitation provision has for years tion Associates to assist us in accomplishing this goal. The been included in our group long term disability contracts. benefits of successful rehabilitation are numerous. This has allowed for the liberal treatment of the benefits of • Claimants benefit psychologically and financially by those claimants who can take the initiative in rehabilitating returning to the work force (and their income is no themselves by returning to limited employment. longer fixed in the face of the rising cost of living). However, over the years-we have encountered many • Employers regain the services of valued employees. motivated claiman'ts who cannot pursue rehabilitative • Society regains productive members. employment without initial medical, vocational or finan- • Claims costs can be controlled and we can ultimately cial assistance. Unfortunately, the majority of such in- pass the savings on to the policyholders in the form of dividuals do not know where to find or how to finance the lower rates or increased benefits. medical or vocational aid that may enable them to return All of our group long term disability claimants are to the work force. It was for this reason that Mutual potential candidates for this program. Criteria have been Benefit Life established a formal Rehabilitation Program. developed and cases are screened for rehabilitation poten- Our Rehabilitation Program began with a theory: tial. If we were to invest time and the money to secure profes- Administration of our Rehabilitation Program is a ten- sional assistance for those claimants who could not assist tralized function carried out by a special unit in our themselves toward vocational rehabilitation, we would Eastern Home Office in Newark, New Jersey. The have a viable means of claims cost control while members of this unit coordinate and direct the rehabilita- simultaneously providing a vital service to our insureds tion activity. They work closely with the rehabilitation and group policyholders. specialist, the claimant, the physician and the employer In 1976 we decided to test the theory. A Pilot Rehabilita- toward realistic vocational goals after medical stabilization tion Program was established and fifty claimants were occurs. referred for professional rehabilitation services. The pro- • If possible the claimant is assisted in returning to work gress of these claimants was monitored closely and the with the employer, perhaps in a different job that is results were thoroughly analyzed. commensurate with his/her physical capacity and The results of the pilot bore out our theory. Several of limitations. the claimants were successfully rehabilitated and Mutual • If the primary goal is not possible the claimant's 2888G(9.81)11672 SURVIVOR Under this optional provision, if death occurs while the insured is BENEFIT receiving LTD benefits, a Survivor Benefit will be paid to the insured's spouse, if living, otherwise divided equally among the surviving children. Surviving children include each unmarried child who is less than 21 years of age, including stepchildren and adopted or foster children who are dependent on the insured for support and maintenance. The Survivor Benefit is equal to the disability payment received for the last full calendar month of disability prior to death. It is payable for the length of time specified on the LTD Highlights page, as long as one or more survivors are eligible. Mutual Benefit 1847G-63(1-84) Life 11648 LTD-11A i CONVERSION If an employee's Long Term Disability insurance terminates, coverage can PRIVILEGE be converted under a special master group policy. The benefits, terms and conditions of the conversion certificate will be those offered at the time of application. At present the conversion plan provides benefits to age 65' for total disability after a 6-month Qualifying Period (or the Qualifying Period of the employer's Group plan, it longer'). At present the monthly conversion benefit is 50 of monthly earrnnas from the Group Policyholder prior to termination of employment, with a minimum of S50 and a maximum of 51,000, reduced by various offsets such as full family Social Security disability or retirement benefits. Details are available in Form H6281G "Fats About Your Long Term Disability Conversion Privilege'. This conversion privilege is provided without evidence of insurability. EFFECTIVE DATE The conversion coverage is effective on the day following the date the OF CONVERSION person's Long Term Disability Insurance terminates. ELIGIBILITY An insured is eligible to convert if he or she: • has been insured under the employer's LTD Policy for at least one year (similar coverage with a prior carrier may be counted'); and • applies in writing and pays the first quarterly premium within 31 days of termination. An insured is not eligible to convert if: • the employer's LTD Policy is terminated or amended to terminate coverage for the insured: or • he or she is totally disabled as defined in the Policy-, or • he or she fails to pay any required contributions: or • he or she attains the Limiting Age. The Limiting Age is ace 70 less 6 months (or less the Qualifying Period of the employer's LTD Policy, if longer than 6 months). 'For persons disabled after their 64th birthday, the benefit period is 12 months or to the person's 70th birthday if sooner. The conversion privilege is not available to residents of Louisiana and Nebraska. mutual ��enefit 16A7G--7 i4-841 _ tt85� LTG-t5 RESOLUTION NO. - 85 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN -------------------------------------- AUTHORIZING PARTICIPATION IN MUTUAL BENEFIT LIFE LONG TERM DISABILITY PLAN WHEREAS, the City Council of the City of Dublin is desirous of providing long term disability insurance to full-time employees who are not employed on a temporary basis; and WHEREAS, the City Council intends to have these benefits provided in the most cost effective manner which will meet the needs of the employees; and WHEREAS, the City Council has allocated sufficient funds in the City ' s budget for this benefit. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin authorizes the City Manager or his designee to execute the necessary applications for the provision of long term disability insurance with Mutual Benefit Life as outlined in their proposal dated September 11, 1985. 1985: PASSED, APPROVED AND ADOPTED this 28th day of October, AYES: NOES: ABSENT: Mayor ATTEST: City Clerk Exhibit A Comparison of Key Factors In LTD Proposals Mutual Standard Premium . 71/ . 7471 Definition of Disabled (As Unable to Perform Your Occupation) 3 yrs . 2 yrs. Definition of Disabled (As Unable to Have Salary at least 801 of what making prior to Disability) Yes-Benefits Paid Not Considered Disabled Ability to Convert Upon Termination Yes No Maximum Income Covered $5 ,$30 $4, 500 Benefit Level 601 66 2/31