Disability 101 WSCFF Life & Disability Plan Presented by: DiMartino Associates, Inc. Becky Wallen February 11, 2010.

Disability 101Disability 101WSCFF Life & Disability PlanWSCFF Life & Disability Plan

Presented by:Presented by:DiMartino Associates, Inc.DiMartino Associates, Inc.

Becky WallenBecky WallenFebruary 11, 2010February 11, 2010

DiMartino Associates, Inc.DiMartino Associates, Inc.

Benefits Consulting Firm formed in Benefits Consulting Firm formed in 1990 by Greg DiMartino1990 by Greg DiMartino

In partnership with WSCFF since 1999In partnership with WSCFF since 1999 Provide consulting and member Provide consulting and member

service for the WSCFF Life, Disability, service for the WSCFF Life, Disability, Additional Life, and Medical Expense Additional Life, and Medical Expense Reimbursement Program (MERP) for Reimbursement Program (MERP) for retireesretirees

Purpose of Disability Purpose of Disability InsuranceInsurance

Provides a benefit if you are unable Provides a benefit if you are unable to earn income as a firefighter due to to earn income as a firefighter due to injury or illnessinjury or illness

Protects from loss of income- on or Protects from loss of income- on or off the joboff the job

Assists firefighter back into an Assists firefighter back into an occupation to earn incomeoccupation to earn income– Rehabilitation, education, re-training…Rehabilitation, education, re-training…

Group vs. Individual Group vs. Individual InsuranceInsurance

The WSCFF programs are considered “group” The WSCFF programs are considered “group” insurance providing protection for your entire insurance providing protection for your entire membership, and are offered on a local-by-membership, and are offered on a local-by-local basislocal basis

All members covered by the bargaining All members covered by the bargaining agreement should be enrolled in the planagreement should be enrolled in the plan

This is not a voluntary, individually defined This is not a voluntary, individually defined planplan

Group coverage provides the most extensive Group coverage provides the most extensive coverage at competitive group premium ratescoverage at competitive group premium rates

Your Plan: Life InsuranceYour Plan: Life Insurance

$15,000 Life/AD&D Insurance; $15,000 Life/AD&D Insurance; $1,000 Spouse Life, $1,000 Child Life$1,000 Spouse Life, $1,000 Child Life

AD&D Insurance pays an additional AD&D Insurance pays an additional benefit if a death or dismemberment benefit if a death or dismemberment (as outlined in contract) is caused by (as outlined in contract) is caused by an accidentan accident

Other AD&D benefits include:Other AD&D benefits include:– Line of Duty, Higher Education, Seat Line of Duty, Higher Education, Seat

Belt/Air Bag Benefit, Occupational Belt/Air Bag Benefit, Occupational Assault Assault

Your Plan: Long-Term Your Plan: Long-Term DisabilityDisability

Provides 60% of your pre-disability Provides 60% of your pre-disability earnings up to $5,000 a month (fully earnings up to $5,000 a month (fully covers annual salary up to $99,996)covers annual salary up to $99,996)

Benefits are payable after 60 days of Benefits are payable after 60 days of disabilitydisability

Benefits may last until Social Benefits may last until Social Security Normal Retirement Age Security Normal Retirement Age (SSNRA)(SSNRA)

Your Plan: Long-Term Your Plan: Long-Term DisabilityDisability

24 month Own Occupation of disability24 month Own Occupation of disability– During first 24 months you are on disability, During first 24 months you are on disability,

you only need to be unable to do your own jobyou only need to be unable to do your own job

After 24 months, you are considered disabled if After 24 months, you are considered disabled if you cannot do a job you are reasonably qualified you cannot do a job you are reasonably qualified for and earn at least 60% of your pre-disability for and earn at least 60% of your pre-disability earningsearnings

Premium payment is waived on all coverages Premium payment is waived on all coverages once you start receiving LTD benefitsonce you start receiving LTD benefits

On-the-Job vs. Off-the-Job On-the-Job vs. Off-the-Job DisabilitiesDisabilities

The Standard coverage is primarily The Standard coverage is primarily for off the job disabilitiesfor off the job disabilities

For on the job disabilities, the For on the job disabilities, the Standard will pay you a minimum Standard will pay you a minimum benefit of $100/monthbenefit of $100/month

If L&I ends, and you’re still disabled If L&I ends, and you’re still disabled according to the Standard contract, according to the Standard contract, they will pay you a 60% benefitthey will pay you a 60% benefit

Taxation of Your Disability Taxation of Your Disability BenefitBenefit

If the premium is paid by the employer, If the premium is paid by the employer, the disability benefits will be taxedthe disability benefits will be taxed

If the premium is paid by the employee If the premium is paid by the employee POST-TAX, the disability benefit is tax-freePOST-TAX, the disability benefit is tax-free– 60% of your 60% of your grossgross salary really means a salary really means a

replacement of 75% or more of your paycheckreplacement of 75% or more of your paycheck

If you have a choice, we always If you have a choice, we always recommend paying disability premiums recommend paying disability premiums post-taxpost-tax

Deductible IncomeDeductible Income Deductible Income is income from other sources that Deductible Income is income from other sources that

reduces the Standard disability benefit you receivereduces the Standard disability benefit you receive

Keep in mindKeep in mind: While receiving a Standard disability : While receiving a Standard disability benefit, if you also receive other income, benefit, benefit, if you also receive other income, benefit, compensation, etc., it most likely will be considered compensation, etc., it most likely will be considered deductible incomedeductible income

Exceptions to deductible income: Longevity pay, Exceptions to deductible income: Longevity pay, Kelly Days, early (actuarially reduced) retirement Kelly Days, early (actuarially reduced) retirement benefits for which you are eligible but don’t receivebenefits for which you are eligible but don’t receive

Examples of Deductible Examples of Deductible IncomeIncome

Sick pay, personal leave pay, severance paySick pay, personal leave pay, severance pay Work earnings Work earnings (for the first 12 months of your disability, The (for the first 12 months of your disability, The

Standard only offsets work earnings that exceed 100% of pre-Standard only offsets work earnings that exceed 100% of pre-disability earnings when combined with The Standard benefit)disability earnings when combined with The Standard benefit)

Workers’ Compensation BenefitsWorkers’ Compensation Benefits Social Security disability benefitsSocial Security disability benefits Disability benefits from another Disability benefits from another groupgroup plan plan

– Your Provident disability benefits are NOT considered Your Provident disability benefits are NOT considered deductible incomedeductible income

Normal retirement benefits like LEOFF, PERS Normal retirement benefits like LEOFF, PERS (but (but The Standard does not require you take these benefits when they The Standard does not require you take these benefits when they are actuarially reduced)are actuarially reduced)

Unemployment benefitsUnemployment benefits

Integrating with Sick PayIntegrating with Sick Pay Standard will allow you to receive 100% of Standard will allow you to receive 100% of

your predisability earnings by combining sick your predisability earnings by combining sick pay with The Standard disability benefitpay with The Standard disability benefit

What this means is your employer allows you What this means is your employer allows you to “burn” sick leave at less than 100%, and to “burn” sick leave at less than 100%, and then Standard pays an integrated benefit up then Standard pays an integrated benefit up to 100% of predisability earningsto 100% of predisability earnings

Requires bargaining language or MOU that Requires bargaining language or MOU that states this procedurestates this procedure

Claim Example #1- No Claim Example #1- No deductible Incomedeductible Income

Firefighter earns $5,000/month ($60,000 Firefighter earns $5,000/month ($60,000 annually)annually)

Firefighter pays premium for coverage – Firefighter pays premium for coverage – benefit is not taxedbenefit is not taxed

Benefit is 60% of your salary (before taxes) Benefit is 60% of your salary (before taxes) on your last full active day at work before on your last full active day at work before the disabilitythe disability

Gross LTD benefit Standard pays is:Gross LTD benefit Standard pays is:60% * $5,000 = $3,00060% * $5,000 = $3,000

Claim Example #2- Partial Claim Example #2- Partial DisabilityDisability

Firefighter is disabled but can work Firefighter is disabled but can work light duty and is compensated at light duty and is compensated at 70% ($3,500) by the employer70% ($3,500) by the employer

Gross LTD benefit is $3,000 ($5,000 * .60)Gross LTD benefit is $3,000 ($5,000 * .60)Work earnings are $3,500Work earnings are $3,500Total combined income - $6,500Total combined income - $6,500Amount exceeds 100% - $1,500Amount exceeds 100% - $1,500Adjusted Standard benefit ($3000 – 1500) - Adjusted Standard benefit ($3000 – 1500) -

$1,500$1,500Total income to firefighter - $5,000Total income to firefighter - $5,000

Filing a ClaimFiling a Claim

Claim packet with 3 components – an Claim packet with 3 components – an employer, employee & physician statementemployer, employee & physician statement

You can file your claim any time after you are You can file your claim any time after you are disabled – you do not need to wait 90 daysdisabled – you do not need to wait 90 days

Information can be sent through DiMartino Information can be sent through DiMartino offices (recommended) or directly to The offices (recommended) or directly to The StandardStandard

Once Standard receives all 3 components, it Once Standard receives all 3 components, it takes about 7 business days to process takes about 7 business days to process claimsclaims

Additional Life InsuranceAdditional Life Insurance

Members can purchase up to an Members can purchase up to an additional $500,000 of Life insurance additional $500,000 of Life insurance ($250,000 of Spouse Life)($250,000 of Spouse Life)

Guarantee Issue amount of $100,000 Guarantee Issue amount of $100,000 ($20,000 for Spouse)($20,000 for Spouse)

Must be offered as a Local with a 20% Must be offered as a Local with a 20% minimum participation requirement minimum participation requirement

Rates are age-gradedRates are age-graded

Additional Life InsuranceAdditional Life Insurance

What is Guarantee Issue?What is Guarantee Issue?- $100K of coverage- No medical underwriting $100K of coverage- No medical underwriting

required!required!- Amounts over $100K will require underwritingAmounts over $100K will require underwriting- Only available during initial open enrollment Only available during initial open enrollment

period (60 days from effective date) or to new period (60 days from effective date) or to new hires, thereafterhires, thereafter

- After initial open enrollment period, medical After initial open enrollment period, medical underwriting required on all amountsunderwriting required on all amounts

Additional Life InsuranceAdditional Life Insurance

Premium Example- Premium Example- Refer to handoutRefer to handout

Volume * Rate / $1,000 = Monthly PremiumVolume * Rate / $1,000 = Monthly Premium

35-year old member35-year old memberRate per $1,000 is 0.09Rate per $1,000 is 0.09

$100,000 * 0.09 / $1,000 = $9.00$100,000 * 0.09 / $1,000 = $9.00$300,000 * 0.09 / $1,000 = $27.00$300,000 * 0.09 / $1,000 = $27.00$500,000 * 0.09 / $1,000 = $45.00$500,000 * 0.09 / $1,000 = $45.00

Additional Life InsuranceAdditional Life Insurance

I have with me today:I have with me today:– Additional Life flyersAdditional Life flyers– Additional Life applicationsAdditional Life applications– Medical History Statements Medical History Statements

I am available after the presentation I am available after the presentation for specific questions and to help for specific questions and to help with enrollment with enrollment

Administration of ProgramAdministration of Program

DiMartino Associates, Inc., is your DiMartino Associates, Inc., is your liaison with the insurance carrier liaison with the insurance carrier (Claims: Becky Wallen)(Claims: Becky Wallen)

Our office administers the billing and Our office administers the billing and eligibility (Shannon Brauner)eligibility (Shannon Brauner)

We’re here to help in educating your We’re here to help in educating your membership and providing member membership and providing member serviceservice

Contact InformationContact Information Have additional benefit questions?Have additional benefit questions?

Need help filing a claim?Need help filing a claim?

Please don’t hesitate to contact us!Please don’t hesitate to contact us!

DiMartino Associates, Inc.DiMartino Associates, Inc.1301 51301 5thth Ave Suite 3701 Ave Suite 3701

Seattle, WA 98101Seattle, WA 98101Toll free 800/488-8277Toll free 800/488-8277

Becky Wallen – Becky Wallen – [email protected] Adamson – Karni Adamson – [email protected]