1 SHORT-TERM DISABILITY (STD) Presented by: Miles Gibson (213) Chief Executive Office Risk Management Branch Short-Term/Long-Term Disability County of Los Angeles “To Enrich Lives Through Effective and Caring Service”

2 Short-Term Disability Outline Short-Term Disability Outline Purpose, Authority & Eligibility STD Benefits Application Process for STD STD Approval Process STD Payments STD Denial / Appeal Process Duration of STD Benefits Coordination of Benefits Mega I/A & STD Benefits STD Reminders Other Resources Contact Information Purpose, Authority & Eligibility STD Benefits Application Process for STD STD Approval Process STD Payments STD Denial / Appeal Process Duration of STD Benefits Coordination of Benefits Mega I/A & STD Benefits STD Reminders Other Resources Contact Information

3 STD Eligibility, Purpose & Authority Employees who are participants in the MegaFlex Cafeteria Plan are eligible to receive STD benefits. It provides disability income replacement benefits for up to 182 calendar days (minus a waiting period) from the first day of a disability. It is governed by Chapter 5.27, County of Los Angeles Flexible Benefit Plan, and Chapter 5.28, County of Los Angeles Nonpensionable Flexible Benefit Plan of the County Code.

4 STD Benefits The STD Plan offers two benefit options for MegaFlex participants to select from during Annual Enrollment. –Core benefit: a continuous 14-day waiting period followed by 70% income replacement; or –Additional benefit: a continuous 7-day waiting period followed by 21 days of 100% income replacement, then 80% income replacement for the remainder of the approved STD period.

5 Application Process for STD To initiate an STD claim, an employee and his/her health care practitioner must contact the County’s third-party administrator (TPA) who approves STD claims; Sedgwick CMS (Sedgwick), at or via the web site at: Both contacts must be made before the end of the waiting period, or a penalty may apply (no benefit for each day the contact is late).

6 The following information is requested to start a claim: –“Are you part of the MegaFlex plan?” –“What is your employee number?” –“What was your last day of work?” –“What was your first day of disability?” –“Do you know your estimated return-to-work date?” –“What is your normal work schedule?” –“What is your work location?” –“What is your supervisor’s name and work phone number?” –“What is the reason for your leave from work?” –“What is your doctor’s name, phone number, address, and fax number (if available)?” Note: It is the employee’s responsibility to ensure that the necessary medical information is received by Sedgwick timely (as requested by Sedgwick letters). Application Process for STD

7 STD Approval Process Once Sedgwick has received all the necessary information, the claim will be processed within 48 hours. Sedgwick will mail a notice of approved STD dates to the employee, and a Hybrid report, that shows an employee’s approved STD dates, to the corresponding department’s payroll unit and Return-to-Work Coordinator.

8 STD Payments If Sedgwick approves a claim an is sent to the payroll unit of the employee’s department indicating the approved STD benefit period. Employees are paid through payroll on regular pay dates. Employee will receive their monthly County Contribution.

9 STD Payments / Tax All STD income replacement benefits are taxed as ordinary income in the year they are received. Consequently, state and federal withholdings will be taken on these amounts.

10 STD Denial / Appeal Process If the claim is denied, Sedgwick will mail the employee a notice with an explanation for the basis of the denial, and information regarding their right to an appeal.

11 Duration of STD Benefits STD benefits stop when the employee reaches the “maximum duration guideline” or after 182 days from the first date of disability, whichever occurs first. (Under no circumstance will benefits continue beyond 182 days!)

12 Duration of STD Benefits – Recurrent Disability If an employee returns to work for 29 days of less and files an extension to be off work again for the same disability, the employee would resume benefits where he/she left off. There would be a resumption of the original 182-day STD period, if not already exhausted. No new waiting period would be required.

13 Duration of STD Benefits – Recurrent Disability If, after an STD period, an employee physically returns to full-time work for 30 calendar days or more, and then needs to be off work again for the same or different disability, they are entitled to a new 182-day STD period. The employee must fulfill a new waiting period.

14 Duration of STD Benefits – Recurrent Disability Any return to work from a previous disability, followed by a separate and unrelated disability will always be cause for a new claim. If there is not a return-to-work, STD benefits are still being received, and a new disability is incurred from a separate and unrelated cause, there is a continuation of the previous injury or illness, and the new disability is a part of the original 182-day STD period.

15 Duration of STD Benefits – Part-Time Disability For part-time STD, departments will be asked to provide the Sedgwick Transitional Return-to-Work Unit with minimum hours that can temporarily accommodate the department’s work flow needs. Note: Part-time STD is not to be paid without an from Sedgwick that has a “Restrictions & Limitations” form attached!

16 Use of Time During STD An employee/STD claimant may not use their accrued time to supplement STD benefits. However, an employee may “turn on” the substitution of accrued time once for any length of time (only in whole day increments), and “turn it off” once with respect to any single disability. Use of accrued time will not extend the 182-STD period for the disability in question.

17 Use of Time During STD Any scheduled part-time work hours not worked must be coded as “AWOP” or accrued time. STD time may not be used. Holidays and weekends that occur during a part-time STD period are paid in the same proportion as the other STD benefit days in the same period of time.

18 Coordination of Benefits STD benefits must be reduced on a dollar-for- dollar basis by the amount an employee receives from other benefits for the same disability. Note: private benefits are excluded! “Mega I/A” (MegaFlex participant with an Industrial Accident) is the most common “other benefit”. Example: An employee earns $5,000 per month, and their Mega I/A benefit is $3,300 per month. The STD benefit would equal $200 ($5,000 x 70%=$3,500. Then $3,500 - $3,300=200).

19 Mega I/A & STD

20 Mega I/A & STD Benefits A MegaFlex employee must file separate claims for Mega I/A and STD benefits. A Mega I/A employee does NOT receive 70% salary continuation, as they are paid the state mandated Temporary Total Disability (TTD) rate (66 2/3%).

21 Mega I/A & STD Benefits The state mandated TTD rate is 2/3 of the average weekly wage (up to a maximum that varies depending on the date of injury). If the 70% STD income replacement payment is larger than the TTD payment, a MegaFlex employee will receive the TTD payment, and the difference between the TTD and STD payment amounts. The total payment for the two benefits will not be more than the 70% STD benefit, regardless of which STD income replacement was selected.

22 Mega I/A & STD Benefits Mega I/A benefits are not taxed. STD benefits are taxed as ordinary income in the year they are received. These benefits are paid by the payroll unit of the employee’s Department until the benefit end date, or up to 182 calendar days.

23 Mega I/A & STD Benefits Payroll receives the STD benefit from Sedgwick CMS with the TTD benefit notices from the workers compensation TPA, then calculates and coordinates the two benefits. Payroll documentation is sent to the Auditor- Controller and payments are made to the employee on regular County paydays just like a regular paycheck.

24 Mega I/A & STD Benefits The Mega I/A TTD benefit is paid by County payroll for the first 6 months. After that, it’s paid by the Workers’ Compensation TPA. Note: If there is a return to work of more than 29 calendar days, and the employee is off work again due to the same disability, the Workers’ Compensation TPA needs to provide the County payroll unit with a new 182-day Mega I/A benefit notice for coordination of payment with STD benefits, no matter how old the claim is!!

25 Long Term Disability Benefits (LTD) If a claim is approved for LTD after 182 days of STD, a “Mega I/A” becomes straight TTD, and is paid by the workers’ compensation TPA. Sedgwick will review the TTD benefit, and deduct the TTD payment before sending the LTD benefit.

26 STD Reminders An employee must… File an STD claim timely (even if it is a Mega I/A). File an STD extension timely. Accept an offer of County employment which is consistent with work restrictions. Provide satisfactory evidence of disability. Cooperate with the Chief Executive Office or the STD administrator.

27 Other Resources More STD information is available on the County Medical Panel Network website at: - or the Interpretive Manual website at: - [click on “Interpretive Manual” on the left, then click on Chapter 1, Section P: STD and LTD Leaves, or click on Chapter 1, Section N: Worker’s Compensation Benefits (under “IA for Non-4850 MegaFlex Employees”)]

28 Contact Information The status of an STD claim may be obtained from: - Sedgwick’s STD Specialist: Mirna (818) FAX #

29 QUESTIONS?