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

DiMartino Associates, Inc. Benefits Consulting Firm formed in 1990 by Greg DiMartino Benefits Consulting Firm formed in 1990 by Greg DiMartino In partnership with WSCFF since 1999 In partnership with WSCFF since 1999 Provide consulting and member service for the WSCFF Life, Disability, Additional Life, and Medical Expense Reimbursement Program (MERP) for retirees Provide consulting and member service for the WSCFF Life, Disability, Additional Life, and Medical Expense Reimbursement Program (MERP) for retirees

Purpose of Disability Insurance Provides a benefit if you are unable to earn income as a firefighter due to injury or illness Provides a benefit if you are unable to earn income as a firefighter due to injury or illness Protects from loss of income- on or off the job Protects from loss of income- on or off the job Assists firefighter back into an occupation to earn income Assists firefighter back into an occupation to earn income –Rehabilitation, education, re-training…

Group vs. Individual Insurance The WSCFF programs are considered “group” insurance providing protection for your entire membership, and are offered on a local-by-local basis The WSCFF programs are considered “group” insurance providing protection for your entire membership, and are offered on a local-by-local basis All members covered by the bargaining agreement should be enrolled in the plan All members covered by the bargaining agreement should be enrolled in the plan This is not a voluntary, individually defined plan This is not a voluntary, individually defined plan Group coverage provides the most extensive coverage at competitive group premium rates Group coverage provides the most extensive coverage at competitive group premium rates

Your Plan: Life Insurance $15,000 Life/AD&D Insurance; $1,000 Spouse Life, $1,000 Child Life $15,000 Life/AD&D Insurance; $1,000 Spouse Life, $1,000 Child Life AD&D Insurance pays an additional benefit if a death or dismemberment (as outlined in contract) is caused by an accident AD&D Insurance pays an additional benefit if a death or dismemberment (as outlined in contract) is caused by an accident Other AD&D benefits include: Other AD&D benefits include: –Line of Duty, Higher Education, Seat Belt/Air Bag Benefit, Occupational Assault

Your Plan: Long-Term Disability Provides 60% of your pre-disability earnings up to $5,000 a month (fully covers annual salary up to $99,996) Provides 60% of your pre-disability earnings up to $5,000 a month (fully covers annual salary up to $99,996) Benefits are payable after 60 days of disability Benefits are payable after 60 days of disability Benefits may last until Social Security Normal Retirement Age (SSNRA) Benefits may last until Social Security Normal Retirement Age (SSNRA)

Your Plan: Long-Term Disability 24 month Own Occupation of disability 24 month Own Occupation of disability –During first 24 months you are on disability, you only need to be unable to do your own job After 24 months, you are considered disabled if you cannot do a job you are reasonably qualified for and earn at least 60% of your pre-disability earnings After 24 months, you are considered disabled if you cannot do a job you are reasonably qualified for and earn at least 60% of your pre-disability earnings Premium payment is waived on all coverages once you start receiving LTD benefits Premium payment is waived on all coverages once you start receiving LTD benefits

On-the-Job vs. Off-the-Job Disabilities The Standard coverage is primarily for off the job disabilities The Standard coverage is primarily for off the job disabilities For on the job disabilities, the Standard will pay you a minimum benefit of $100/month For on the job disabilities, the Standard will pay you a minimum benefit of $100/month If L&I ends, and you’re still disabled according to the Standard contract, they will pay you a 60% benefit If L&I ends, and you’re still disabled according to the Standard contract, they will pay you a 60% benefit

Taxation of Your Disability Benefit If the premium is paid by the employer, the disability benefits will be taxed If the premium is paid by the employer, the disability benefits will be taxed If the premium is paid by the employee POST- TAX, the disability benefit is tax-free If the premium is paid by the employee POST- TAX, the disability benefit is tax-free –60% of your gross salary really means a replacement of 75% or more of your paycheck If you have a choice, we always recommend paying disability premiums post-tax If you have a choice, we always recommend paying disability premiums post-tax

Deductible Income Deductible Income is income from other sources that reduces the Standard disability benefit you receive Deductible Income is income from other sources that reduces the Standard disability benefit you receive Keep in mind: While receiving a Standard disability benefit, if you also receive other income, benefit, compensation, etc., it most likely will be considered deductible income Keep in mind: While receiving a Standard disability benefit, if you also receive other income, benefit, compensation, etc., it most likely will be considered deductible income Exceptions to deductible income: Longevity pay, Kelly Days, early (actuarially reduced) retirement benefits for which you are eligible but don’t receive Exceptions to deductible income: Longevity pay, Kelly Days, early (actuarially reduced) retirement benefits for which you are eligible but don’t receive

Examples of Deductible Income Sick pay, personal leave pay, severance pay Sick pay, personal leave pay, severance pay Work earnings (for the first 12 months of your disability, The Standard only offsets work earnings that exceed 100% of pre-disability earnings when combined with The Standard benefit) Work earnings (for the first 12 months of your disability, The Standard only offsets work earnings that exceed 100% of pre-disability earnings when combined with The Standard benefit) Workers’ Compensation Benefits Workers’ Compensation Benefits Social Security disability benefits Social Security disability benefits Disability benefits from another group plan Disability benefits from another group plan –Your Provident disability benefits are NOT considered deductible income Normal retirement benefits like LEOFF, PERS (but The Standard does not require you take these benefits when they are actuarially reduced) Normal retirement benefits like LEOFF, PERS (but The Standard does not require you take these benefits when they are actuarially reduced) Unemployment benefits Unemployment benefits

Integrating with Sick Pay Standard will allow you to receive 100% of your predisability earnings by combining sick pay with The Standard disability benefit Standard will allow you to receive 100% of your predisability earnings by combining sick pay with The Standard disability benefit What this means is your employer allows you to “burn” sick leave at less than 100%, and then Standard pays an integrated benefit up to 100% of predisability earnings What this means is your employer allows you to “burn” sick leave at less than 100%, and then Standard pays an integrated benefit up to 100% of predisability earnings Requires bargaining language or MOU that states this procedure Requires bargaining language or MOU that states this procedure

Claim Example #1- No deductible Income Firefighter earns $5,000/month ($60,000 annually) Firefighter pays premium for coverage – benefit is not taxed Benefit is 60% of your salary (before taxes) on your last full active day at work before the disability Gross LTD benefit Standard pays is: 60% * $5,000 = $3,000

Claim Example #2- Partial Disability Firefighter is disabled but can work light duty and is compensated at 70% ($3,500) by the employer Gross LTD benefit is $3,000 ($5,000 *.60) Work earnings are $3,500 Total combined income - $6,500 Amount exceeds 100% - $1,500 Adjusted Standard benefit ($3000 – 1500) - $1,500 Total income to firefighter - $5,000

Filing a Claim Claim packet with 3 components – an employer, employee & physician statement Claim packet with 3 components – an employer, employee & physician statement You can file your claim any time after you are disabled – you do not need to wait 90 days You can file your claim any time after you are disabled – you do not need to wait 90 days Information can be sent through DiMartino offices (recommended) or directly to The Standard Information can be sent through DiMartino offices (recommended) or directly to The Standard Once Standard receives all 3 components, it takes about 7 business days to process claims Once Standard receives all 3 components, it takes about 7 business days to process claims

Additional Life Insurance Members can purchase up to an additional $500,000 of Life insurance ($250,000 of Spouse Life) Members can purchase up to an additional $500,000 of Life insurance ($250,000 of Spouse Life) Guarantee Issue amount of $100,000 ($20,000 for Spouse) Guarantee Issue amount of $100,000 ($20,000 for Spouse) Must be offered as a Local with a 20% minimum participation requirement Must be offered as a Local with a 20% minimum participation requirement Rates are age-graded Rates are age-graded

Additional Life Insurance What is Guarantee Issue? - $100K of coverage- No medical underwriting required! - Amounts over $100K will require underwriting - Only available during initial open enrollment period (60 days from effective date) or to new hires, thereafter - After initial open enrollment period, medical underwriting required on all amounts

Additional Life Insurance Premium Example- Refer to handout Volume * Rate / $1,000 = Monthly Premium 35-year old member Rate per $1,000 is 0.09 $100,000 * 0.09 / $1,000 = $9.00 $300,000 * 0.09 / $1,000 = $27.00 $500,000 * 0.09 / $1,000 = $45.00

Additional Life Insurance I have with me today: I have with me today: –Additional Life flyers –Additional Life applications –Medical History Statements I am available after the presentation for specific questions and to help with enrollment I am available after the presentation for specific questions and to help with enrollment

Administration of Program DiMartino Associates, Inc., is your liaison with the insurance carrier (Claims: Becky Wallen) DiMartino Associates, Inc., is your liaison with the insurance carrier (Claims: Becky Wallen) Our office administers the billing and eligibility (Shannon Brauner) Our office administers the billing and eligibility (Shannon Brauner) We’re here to help in educating your membership and providing member service We’re here to help in educating your membership and providing member service

Contact 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! DiMartino Associates, Inc th Ave Suite 3701 Seattle, WA Toll free 800/ Becky Wallen – Karni Adamson –