1. TOPIC #2 STATE AWARDS: WHAT ARE THEY WHEN DO THEY HAPPEN WHY DO THEY CAUSE AN OVERPAYMENT ? Lunch-n-Leaves Disability & Leave Services

2. Voluntary Plan Basics What is a “Voluntary Disability Insurance Plan”?  Private short-term disability coverage plan only for California resident employees  Legal alternative to the mandatory State Disability Insurance (SDI)  Effective 1/1/2004 includes Paid Family Leave (PFL) known as Family Temporary Disability (FTD) at Stanford Why is it called “Voluntary”?  Because employees can choose to opt out of the VP and participate in SDI instead DLS Lunch-n-Leaves 3/18/2011 2

3. Voluntary Plan Basics DLS Lunch-n-Leaves 3/18/2011 3 Legal Requirements  Rights under VP must be same as those of SDI  Weekly benefit must be the same or greater – never less  VP must provide at least one benefit that is greater than SDI  If SDI increases rights/benefits, VP must also Governing Authority  California Unemployment Insurance Code (CUIC), Part 2 Administrative Authority  Director of the EDD has the right to issue regulations interpreting the law. These regulations are contained in Title 22, California Code of Regulations (CCR)

4. What is a State Award? Remember the legal requirement!  Weekly benefit must be the same or greater – never less A State Award is the SDI weekly benefit amount times 52 weeks  Example:  Impact: Stanford VP must pay at least $650 per week DLS Lunch-n-Leaves 3/18/2011 4 $650 Per week 52 weeks $33,800

5. How: Path of a State Award DLS Lunch-n-Leaves 3/18/2011 5 Employee files claim Liberty Mutual sets up claim in their system Report of VP Claim (DE 2523) sent to EDD EDD enters data into their database EDD calculates State Award based on wages during “base period” Notice of Computation (DE 429D) sent to employee Notice of State Award sent to carrier – Liberty Mutual Liberty sends Notice of State Award to DLS Uh-Oh Now What?

6. State Award SDI State Award SDI Stanford Award VDI Stanford Award VDI DLS Lunch-n-Leaves 3/18/2011 6 Sample #1: State Award vs Stanford Award Claim Effective Date  2/22/11 Wage Base Period  9/30/09 – 9/30/10 Wages in Base Period  $87,643.64 Weekly Benefit @ 55%  $927.00 Claim Effective Date  2/22/11 Wage Base Period  2/21/11 Wages  $66,975.50 Weekly Benefit @ 60%  $772.79

7. Sample “State Award” Notice Sample Overpayment Notice DLS Lunch-n-Leaves 3/18/2011 7 How does a State Award Cause an Overpayment?

8. State Award SDI State Award SDI Stanford Award VDI Stanford Award VDI DLS Lunch-n-Leaves 3/18/2011 8 Sample#2: State Award vs Stanford Award Claim Effective Date  8/14/10 Wage Base Period  3/31/09 – 3/31/10 Wages in Base Period  $40,500 Weekly Benefit @ 55%  $429.00 Claim Effective Date  8/14/10 Wage Base Period  8/13/10 Wages in Base Period  $53,450 Weekly Benefit @ 60%  $616.73

9. State Award SDI State Award SDI Stanford Award VDI Stanford Award VDI DLS Lunch-n-Leaves 3/18/2011 9 Sample#3: State Award vs Stanford Award Claim Effective Date  8/14/10 Wage Base Period  3/31/09 – 3/31/10 Wages in Base Period  $0 Weekly Benefit @ 55%  $0 Claim Effective Date  8/14/10 Wage Base Period  8/13/10 Wages in Base Period  $33,247 Weekly Benefit @ 60%  $383.62 – but...

10. VDI Benefit Limited to State Rate DLS Lunch-n-Leaves 3/18/2011 10 Refer to VP Statement of Coverage Handout  “Benefits will be limited to the State Plan Rate...”  Found at: http://benefits.stanford.edu/cgi-bin/health_and_life/disability/ Disability during first 90 days of employment  What if employee had never worked in California before? Pre-existing illness or injury during 3 month period preceding date of hire Plus a few more...

11. DLS Lunch-n-Leaves 3/18/2011 11 Got Questions?

12. Manager Patti Smilovitz 6-1196 Leave Analysts Laurie Jarocki4-9734Alpha: A - G Rubi Paredes4-0120Alpha: H - K Nicole Peixoto 1-1479Alpha: L - Q Wendy Freeman5-1024Alpha: R – Z DLS Email Address:hrleaves@stanford.edu DLS Lunch-n-Leaves 3/18/2011 12 Contact DLS