State of California M E M O R A N D U M REFERENCE CODE: 99-031 DATE: July 8, 1999 TO: Personnel Officers Personnel Transactions Supervisors Personnel Transactions Staff FROM: Department of Personnel Administration Benefits Division SUBJECT: Long-Term Disability (LTD) for Nonrepresented Employees - Contract Extension and Open Enrollment CONTACT: Desi Rodrigues, Personnel Management Technician (916) 324-0533, CALNET 454-0533 FAX: (916) 322-3769 OFFICE VISION: DPA(DesiRodrigues) INTERNET: DESIRODRIGUES@DPA.CA.GOV This memorandum provides information regarding the State's Long-Term Disability Plan (LTD) contract and the upcoming open enrollment period. Contract Extension The Department of Personnel Administration has awarded Metropolitan Life Insurance Company (MetLife) a three-year extension of the current LTD contract. The term of the extension will be October 1, 1999 through September 30, 2002. The current rate used to calculate employee's premiums will remain unchanged during the extended contract period. However, employees who experience an age change that moves them into a higher age band (i.e. from 39 to 40, from 49 to 50, etc.) will experience a premium increase when the annual premium update is implemented each year in January. Open Enrollment An open enrollment period for the Long Term Disability (LTD) insurance for nonrepresented employees will be held from September 1, 1999 through September 30, 1999 in order to provide eligible employees with an opportunity to enroll in this valuable plan. Information is provided below on the eligibility criteria, employee communications, completion of the LTD form, effective date of coverage, training sessions for personnel office staff, and LTD Plan brochures and enrollment forms. Eligibility Criteria Employees who are eligible to enroll in the LTD plan include permanent or probationary employees excluded from collective bargaining who work a one-half time or greater time base. Specifically, employees with any of the following designations are eligible: - Managerial (M, E59, E79) - Supervisory (S, E48, E58, E68, E78) - Confidential (C) - Excluded/Exempt (E88, E89, E97, E98, E99) - E01 through E21, E67, E77 Rank and file employees are not eligible to enroll in the LTD plan. Employees on limited term appointments, who otherwise meet this eligibility criteria, may enroll in the LTD plan only if they have a mandatory right of return to a position and status that also meets this criteria. Permanent intermittent employees are not eligible. Employee Communications The Department of Personnel Administration (DPA) will be informing eligible employees about the LTD open enrollment using a variety of communications. While all eligible employees will be mailed an open enrollment announcement to their home address, more detailed information will be provided to employees under age 50. We are specifically targeting these employees because the LTD coverage can be critical when employees are young and disabilities can last for many years. In addition, these employees may not have the number of years in State service that would make them eligible for a large disability retirement benefit through CALPERS. Therefore, the 65% benefit level provided by the LTD plan would be especially beneficial to them. All employees eligible as of July 9, 1999 will be mailed open enrollment information as follows: Employees under age 50: In early July, a postcard will be mailed to the homes of approximately 14,000 employees notifying them of the open enrollment. The postcard will also notify the employees that more detailed information will be mailed to their home in early August. This second mailing will include a cover letter that provides more detailed information regarding the open enrollment and a flyer that summarizes the features of the LTD plan. Employees interested in enrolling in the plan will be instructed to mail a pre-addressed postcard (which is included in the packet) to MetLife. They will be sent an enrollment package that includes more detailed plan information and an enrollment form. Employees over age 50: In early July, a postcard will be mailed to the homes of approximately 9,000 employees notifying them of the open enrollment. The postcard will instruct these employees to contact their departmental personnel office for the one-page LTD flyer and the LTD enrollment authorization form if they are interested in enrolling. In addition to the above communications, there will be a two-line global message on the August 1, 1999 paycheck stub reminding the employees of the LTD open enrollment. Completion of the LTD Enrollment Authorization Form During open enrollment periods, new enrollees are required to complete the LTD enrollment authorization form (GR- 11513-9), sections A and B and submit the form to their personnel office. Departmental personnel offices are responsible for verifying the employee's eligibility, gross salary, premium amount and retirement category (safety or miscellaneous), completing section C and submitting the forms on a timely basis to the State Controller's Office (SCO). Effective Date of Coverage LTD coverage will begin on the first day of the pay period following the pay period from which the first premium deduction is made. Specifically, if the employee's enrollment form is processed by the Personnel Office and forwarded to the SCO by September 10, 1999, the first effective date of coverage will be October 1, 1999. For those employees whose enrollment forms are submitted to personnel between September 10th and the 30th and forwarded to the SCO by October 10, 1999, the benefit will become effective on November 1, 1999. There is no retroactivity in the LTD plan. The SCO will return any incorrectly completed forms to the appropriate Personnel Office for correction, which will result in a delay of the employee's effective date. The payroll "cut- off" date upon which the corrected form is returned to the SCO by the personnel office will then determine the employee's actual effective date of coverage. Personnel Staff Training DPA staff will be conducting training sessions for Personnel Transactions staff on August 10 & 11, 1999. The sessions will be held from 9:30 a.m. to 11:30 a.m., and 1:30 p.m. to 3:30 p.m. in the DPA State Training Center, 1515 S Street, North Bldg., Room 105, 1st Floor, in Sacramento. This training is designed for all Personnel Transactions staff who may be unfamiliar with the LTD plan, the enrollment procedures and the claims process. Due to limited seating capacity, advanced reservations are required for all sessions. Please contact Desi Rodrigues at (916) 324-0533/Calnet 454-0533 by July 23, 1999. LTD Plan Brochures and Enrollment Forms In order to minimize the workload required by departmental personnel offices to support the LTD open enrollment, MetLife has agreed to be the primary contact for the distribution of plan information and enrollment enrolling. We anticipate that the majority of interested employees will return the pre-addressed postcard to MetLife in order to request these items. There may be a small number of employees over age 50 who will contact personnel offices directly for the LTD flyer and enrollment forms. Therefore, you should ensure that you have an adequate supply of these materials in stock. A supply of the enrollment forms (GR-11513-9) and flyers can be obtained by calling Desi Rodrigues of the DPA, Benefits Division at (916) 324-0533/Calnet 454-0533. The DPA's September Benefits News, which is distributed to departmental personnel offices and employee organizations, will include an article on the LTD plan. When you receive the Benefits News, it can be reproduced and distributed or posted on bulletin boards as an additional method of notifying your employees of the upcoming LTD open enrollment period. We appreciate your assistance in communicating information to employees regarding the LTD plan and in making the open enrollments successful. Through your continued support and DPA's implementation of improved marketing materials, we have been able to continue to increase enrollment in this plan. There are currently over 9,000 nonrepresented employees enrolled in the plan. If you have any questions regarding this memo, please contact Desi Rodrigues at (916) 324-0533/Calnet 454-0533. Kathie Vaughn, Chief Benefits Division