IPA LONG – TERM DISABILITY PROGRAM
Effective June 1, 2004, the IPA Executive Board concluded an agreement with Anthem Life Insurance Company to continue offering Long-Term Disability Insurance coverage to IPA’s flight crewmembers. Many months have been spent reviewing competitive proposals from several major insurers, and it is our belief that Anthem will continue to provide us with the best commercial Long-Term Disability coverage available to any pilot group in America.
Coverage will continue to be available on an elective basis to all active Captains, First Officers, Second Officers/PFEs working for UPS who are members in good standing of IPA. Premiums are $1.56 per $100 of guarantee, and are paid by each crewmember via direct payroll deduction. Premiums and benefits are based on a crewmember’s monthly guarantee, as derived from Article 12 of the current collective bargaining agreement.
Highlights of the Anthem LTD program are:
BENEFIT PERCENTAGE 66 2/3% of monthly guarantee
MONTHLY MAXIUMUM BENEFIT $10,000
WAITING PERIOD PRIOR TO BENEFITS 24 months (during this period Mutual Aid Plan and UPS Loss of License benefits are available)
BENEFIT DURATION For Captains/First Officers to age 60, however benefits will be payable until age 65 (but not less than one year) if the insured is unable to perform the duties of a Second Officer/PFE, or for the seat assignment permitted under FAR part 121 (Age 60 rule)
BENEFIT INTEGRATION APPROACH Offset for other earned income, full family Social Security and UPS/IPA Defined Benefit Pension Plan. NO offset for military pensions, military disability, NG/Reserve income, UPS/IPA 401k and Defined Contribution Pension plans, Individual or Association disability plans, personal investment income, IRAs, TSAs, and some limited personal business income etc.
DEFINITION OF DISABILITY Injury or sickness preventing insured from performing duties of own occupation (Captain, F/O, S/O, PFE)
PARTIAL DISABILITY Performing some, but not all of duties of own, or any occupation, and earning less than 80% of pre-disability guarantee
MENTAL/NERVOUS CONDITIONS Full coverage in-patient; 2 years out-patient
PRE-EXISTING CONDITIONS 3 months/6 months/12 months
OTHER PROVISIONS Can break waiting period by up to 120 days of return to work. No cost of living adjustment. Guarantee for benefit calculation will be set two years (allowing for increases due to longevity raises)
OTHER PROVISIONS Waiver of premium after 6 months of disability. 3 month survivor benefit. Disability case management. Rehabilitation program. Social Security assistance.
EXISTING PLAN CHANGES Increased monthly maximum, elimination of strike provision that was initiated by US Life, clarifying language for termination of benefits and clarifying language for benefits for other conditions
PREMIUM $1.56 per $100 of monthly guarantee
WHO IS ANTHEM LIFE?
Anthem Life is a specialist in group life insurance and disability income products. They do not offer health care products or services. Their specialization enables them to totally focus on protecting and improving the financial security of the customers they serve. Their goal is to provide an exceptional customer experience by delivering high-quality products and expert services designed to meet the specific needs of the groups and group members we protect. At Anthem Life their mission is to provide the people they serve with financial protection and security.
Anthem Life provides insurance products and services to over 40,000 groups. In 2003, Anthem Life’s sales exceeded $27 million in annualized premiums. They are admitted as a life and health insurance company in 47 states and the District of Columbia. As a subsidiary of Anthem, Inc., the fifth largest publicly traded health benefits company in the United States, they have the strength and capacity to deliver on their promises. The insurance and financial industries’ most respected rating agencies continue to recognize Anthem’s financial strength. Anthem has earned ratings of “A1” from Moody’s, “A” from Standard and Poor’s, and AA- from Fitch (formerly Duff and Phelps). Anthem Life has also earned an “A” (Excellent) rating from A.M. Best Company, the oldest and most recognized insurance rating organization. This rating reflects a company’s financial strength and ability
to meet its contractual obligations.
Anthem Life serves a wide variety of customers. Its accounts range from very small
companies to groups with thousands of members across many states. The industries served cover the spectrum of commercial businesses, associations, and public sector groups. With numerous accounts of 13,000 or more employees, Anthem Life has considerable experience meeting the needs of large groups.
HOW DO I GET INTO THE ANTHEM LTD PROGRAM?
If you are not currently participating in the IPA Long-Term Disability Program, consider enrolling now. Newly hired crewmembers may take advantage of an open enrollment opportunity anytime within 90 days of their date of hire by filling out a short application and a payroll deduction authorization. More senior crewmembers may enroll at any other time by completing a short health questionnaire in addition to the application and payroll deduction authorization. All required forms are available at the IPA office, or can be obtained by calling 1-800-285-4IPA. There is open enrollment for 90 days with the start of our new partnership with Anthem. This open enrollment will end August 31, 2004.
HOW HAS OUR LTD PROGRAM PERFORMED?
As of May 31, 2004, one crewmember is receiving Long-Term Disability benefits from The Hartford Insurance Company, under the terms of IPA’s original LTD program, which covered crewmembers until December 31, 1992.
As of the same date, one crewmember is receiving Long-Term Disability benefits under the terms of the BMA program, which began January 1, 1993 and continued through November 30, 1995. This crewmember remains under the BMA program, and any benefits that may accrue will do so in accordance with the terms and conditions of the BMA program.
As of May 31, 2004, a total of 32 crewmembers are receiving Long-Term Disability benefits from AIG and U S Life (who merged with AIG in the summer of 2001). Nineteen additional crewmembers have been identified as being within the twenty-four month waiting period prior to qualifying for LTD benefits. These crewmembers will remain under the AIG program, and any benefits that may accrue will do so in accordance with the terms and conditions of the AIG program. In addition, benefits will be determined and paid under the terms and conditions of the AIG program to any and all other crewmembers that had, or will have, a disabling illness or injury prior to May 31, 2004.
As of May 31, 2004, 2,285 IPA crewmembers were participating in the IPA LTD program. If you aren’t one of them, we urge you to enroll without delay. As a UPS crewmember, you’ll find that when injury or illness strikes, you can’t afford to be without this valuable disability coverage.
