The University Record, June 19, 1995
Cost of LTD coverage increases
The Benefits Office has announced rate increases for the Long Term Disability Plan (LTD) coverage effective June 1.
Marty Eichstadt, director of benefits operations, says, “We notified you last year at this time that we expected increases to occur at this time each year for the next several years. We regret the increase in cost.”
When the Expanded LTD plan was first introduced in July 1985, the cost of the insurance was $6.50 per thousand dollars of annual salary. Eichstadt notes that “because of good experience in the plan, the price was reduced to $2.90. We now need to charge rates closer to the original.”
The University pays the premium for the first $30,000 of annual base salary for staff after they have completed four years of continuous service and have a 50 percent or greater appointment lasting eight months or longer, or after five years of continuous service and less than a 50 percent appointment lasting eight continuous months or longer.
Eichstadt lists several reasons the increases are necessary. First, she says, before 1990 the number of people becoming disabled each year was quite low. Over the past two to four years, a 50 percent increase in the number of disabled individuals receiving benefits has occurred. In addition, the plan is currently under-reserved, meaning there are insufficient funds to pay present and future disability plan costs.
Staff members who wish to drop their LTD coverage should contact the Benefits Office, 763-1214, to discuss the impact of the decision before making arrangements to cancel the coverage.
|
Plan |
Old rate per $1,000 of covered annual salary |
New rate per $1,000 of covered annual salary |
|
Basic Plan |
$17.30 |
$18.17 |
|
Expanded |
$7.50 |
$7.88 |
|
Physicians |
$7.50 |
$7.88 |
