1. Why is the University implementing a new UMMG Long Term Disability plan?
Benefits Administration was asked to determine whether higher amounts of disability coverage could be obtained at the same or lesser expense to the University of Miami Medical group. Upon review of the results by the Benefits Committee of UMMG, and along with a recommendation by the Executive Committee, a new group long-term disability policy was approved. The new plan will save the UMMG $2M annually in premium and increase the monthly benefits from a maximum of $13,500 pre-tax to $25,000 post-tax.
2. When will the new LTD plan become effective?
June 1, 2009
3. Where can I learn more?
Review the new UMMG LTD plan summary.
4. Can I choose to keep my individual plan?
Physicians may want to consider continuing their individual policies either temporarily or permanently for the following reasons:
Physicians earning in excess of $300,000/year who are concerned about the pre-existing condition limitation during the first 12 months of the new policy
Physicians who may lose UMMG status either through status change or separation and are concerned about the conversion options of the new policy
Physicians who elect to continue their individual policies and go out on claim for conditions that are not pre-existing will not receive any larger benefit by keeping their individual policies. The new group benefit is offset by any individual policy, as well as other earnings/benefits.
The new plan replaces existing individual and group policies, but physicians may retain their individual policies at their own expense. You will receive a conversion letter from your current individual carrier explaining how to convert your existing individual policy. You will have until July 30, 2009 to request a conversion. If you have any questions about converting your policy, please contact the individual policy carriers: Standard (800) 247-6888 or Unum (877) 281-1855.
4. How much income replacement will I receive from the new LTD plan?
The new Unum group policy pays 60 percent of earnings to a maximum of $25,000 per month and mirrors existing specialty-specific contract language with the full benefit provided on a guaranteed issue basis.
5. How will my new premium be calculated?
The way your premium is calculated will change because group insurance is underwritten differently than individual insurance. Group insurance looks at the entire group being covered (age, occupation, earnings and morbidity tables) and determines a premium per $100 of covered payroll which applies to all individuals in the group. Individual insurance looks at the same factors as group insurance, but looks more closely at a person’s specific medical history to determine a premium for that individual.
By paying tax on the premium, your benefit will be tax-free. You were not taxed on the premium of the prior policy, so the benefits of that policy were taxable. If you choose to continue your individual policy at your own expense, the benefits of that policy become tax-free.
UMMG members will be taxed on the value of the premium paid by the University (known as imputed income). The premium rate is $.77 per $100 of covered payroll. See example calculation below for $150,000 annual salary:
$150,000 x 60% / $100 x $.77 = $693 Premium/Imputed Income
$693 x 30% estimated tax - $207.90
Annual Earnings Imputed Income Estimated Tax (30%)
$150,000 $693 $207.90
$250,000 $1,155 $356.50
$500,000 $2,310 $693.00
$750,000 $2,310 $693.00
5. What is the maximum benefit duration?
Under the new Unum UMMG Group LTD policy, the maximum period of payment is as follows:
If disabled at: Benefit continues for:
Less than age 62 Social Security Normal Retirement Age (see SSNRA table below)
Age 62 60 months (at least age 67)
Age 63 48 months (at least age 67)
Age 64 42 months (at least age 67 1/2)
Age 65 36 months (at least age 68)
Age 66 30 months (at least age 68 1/2)
Age 67 24 months (at least age 69)
Age 68 18 months (at least age 69 ½)
Beyond age 68 18 months
Federal Social Security Normal Retirement Age is as follows:
Year of Birth
Full (normal) Retirement Age
1937 or earlier
65 and 2 months
65 and 4 months
65 and 6 months
65 and 8 months
65 and 10 months
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
1960 and later
6. Will I receive any additional information about my new LTD benefit?
You will receive an email with a link to the new Summary Plan Document in June.
7. Where can I find specific details on the new policy, including any exclusions or limitations?
The new LTD Summary Plan Document will be available in June. The documents will be available online at www.miami.edu/benefits click “Financial Security” at the left.
8. If I separate employment from the UMMG, can I convert the new group LTD policy to an individual policy?
If a UMMG member separates from employment or otherwise loses UMMG status, the Group LTD policy may be converted to individual coverage. A benefit of $4,000 per month may be purchased without evidence of insurability. If evidence is provided and approved, a maximum of $6,000 per month may be purchased. Rates are as follows:
Age Quarterly Rate per $100 of coverage purchased
Age 25 $1.67
Sample calculation: 55 year old with $4,000 of monthly benefit
$21.14 x ($4,000/$100) = $845.60 quarterly premium
For assistance with converting the new group LTD policy to an individual policy upon separation from UMMG, please contact Jennifer Cohen, Executive Director of Health Plan Administration at 305.243.7172 or email@example.com.
9. What would the premiums be if I obtained an individual policy with benefits equivalent to the new Group LTD policy?
Sample Pricing for an Equivalent Individual Policy
Earnings Age IDI Benefit Monthly Premium
$250,000 35 $12,500/mo $652.91
$500,000 35 $25,000/mo $1,246.95
$250,000 45 $12,500/mo $949.49
$500,000 45 $25,000/mo $1,812.24
$250,000 55 $12,500/mo $1,362.86
$500,000 55 $25,000/mo $2,604.01
Please note that the amounts above would require full financial and medical underwriting. Premiums displayed are a blend of average health and smoker/non-smoker rates.
10. What is the contact information for the new and old policies?
You may contact Standard (800) 247-6888 or Unum (877) 281-1855 with questions about your current policy; for questions about the new group LTD policy contact Jennifer Cohen, Executive Director of Health Plan Administration at 305.243.7172 or firstname.lastname@example.org