State of California

  M E M O R A N D U M

  REFERENCE CODE:
  98-058

  DATE:
  November 16, 1998

  TO:
  Personnel Officers
  Personnel Transactions Supervisors
  Personnel Transactions Staff

  FROM:
  Department of Personnel Administration
  Benefits Division

  SUBJECT:
  Premium Changes for the Group Term Life Insurance and Long 
  Term Disability Programs for Excluded Employees

  CONTACT:
  Desi Rodrigues, Personnel Management Technician
  (916) 324-0533, CALNET 454-0533
  FAX: (916) 322-3769
  OFFICE VISION: DPA(DXRODRIGUES)
  INTERNET: DXRODRIGUES@DPA.GOV


  This memorandum is to advise you of the annual age/salary 
  updates that will be implemented effective January 1, 1999 
  in the Group Term Life Insurance and Long Term Disability 
  Programs for excluded employees.  These updates will result 
  in premium increases for some employees enrolled in these 
  programs.  In addition, premium changes will be implemented 
  effective January 1, 1999 for the Supplemental Life 
  Insurance Program for excluded employees.
  
  Basic Group Term Life Insurance Premium Updates
  
  The State's Group Term Life Insurance Program requires that 
  when active excluded employees reach age 70, their 
  employer-paid basic life insurance benefit and premium will 
  be reduced by 50 percent on the January 1 of the following 
  year.  Therefore, employees who experienced an age change 
  (i.e., from 69 to 70 years of age) during calendar year 
  1998 will have their State-paid premium reduced by one half 
  effective January 1, 1999 (i.e., December 1998 pay period).  
  The amount of coverage will also be reduced by 50 percent 
  (i.e., from $50,000 to $25,000 or from $25,000 to $12,500).   
   
  Supplemental Life Insurance Premium Changes
  
  Effective January 1, 1999, a premium decrease will be 
  implemented for employees enrolled in the Supplemental Life 
  Insurance Program for excluded employees.  As a result of 
  premium changes that will be implemented effective January 
  1, 1999 to make the retirees' life insurance program more 
  self-supported, the State is able to reduce the premiums 
  charged to active employees for their supplemental 
  coverage. Within the next week, the Department of Personnel 
  Administration will be sending a letter directly to 
  enrolled employees' homes advising them of the new premium 
  rates.  Effective with the paycheck for the December pay 
  period (dated January 1, 1999) the monthly rates per 
  $10,000 of supplemental insurance coverage will be as 
  follows:
  
                             Old                  New
  Attained Age          Monthly Premiums     Monthly Premiums
  
  Under 30                   $ 0.94               $ 0.83
  30 but less than 40        $ 1.13               $ 0.98
  40 but less than 45        $ 2.16               $ 1.84
  45 but less than 50        $ 4.37               $ 3.69
  50 but less than 55        $ 5.93               $ 4.99
  55 but less than 60        $ 8.09               $ 6.80
  60 but less than 65        $10.25               $ 8.60
  65 but less than 70        $20.05               $16.78
  70 but less than 75        $30.35               $25.38
  75 and over                $45.25               $37.83
  
  An administrative fee of 20 cents is added to the monthly 
  premium.
  
  Personnel Offices should be aware that while the premiums 
  charged per $10,000 of coverage will be reduced, some 
  employees may actually experience a premium increase 
  effective January 1, 1999 because of the annual age update. 
  The supplemental insurance premiums are based on the 
  employee's age. An audit is conducted annually by 
  Metropolitan Life Insurance Company (MetLife), the State's 
  life insurance provider, to identify those enrolled 
  employees whose age change will require a higher premium 
  rate. If an employee moved to a higher age band (i.e., age 
  change from 44 to 45 or from 54 to 55, etc.) during 
  calendar year 1998, MetLife will notify each employee in 
  writing of their new premium rate.  The State Controller's 
  Office will implement the premium increase in the paycheck 
  for the December pay period (i.e., warrant dated January 1, 
  1999). For example, if an enrolled employee's age changed 
  from 44 to 45 during 1998, the premium will increase from 
  the old rate of $2.16 (for the 40 but less than 45 age 
  group) to the new rate of $3.69 per $10,000 (for the 45 but 
  less than 50 age group).
   
  Long Term Disability (LTD) Plan Premium Update
  
  On January 1 of each year, an annual age/salary update is 
  also conducted for all excluded employees enrolled in the 
  LTD plan.  The State Controller's Office will audit the 
  payroll history files to identify those employees who have 
  experienced a salary or age change during 1998 that would 
  require a change in the employee's monthly LTD premium.  
  Those employees whose salary has increased or who have 
  moved to the next higher age band (i.e., from age 39 to 40, 
  or from age 49 to 50, etc.) will receive an increase in 
  their monthly premium effective January 1, 1999.  The 
  premium changes will be reflected on the December 1998 pay 
  period warrant.
  
  If you have any questions regarding these premium changes, 
  please contact Desi Rodrigues at (916) 324-0533 or Calnet 
  454-0533.
  
  
  
  Kathie Vaughn, Chief
  Benefits