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Cost of the LTD Plan

Question: I have over four years of service and I am paying to cover my full salary over $60,000. Does the change in covered salary for the LTD plan to $61,800 in 2018 mean I will pay less to cover my full salary after January 1?


The covered university base salary is increasing from $60,000 to $61,800, and the rate per $1,000 of coverage above the university covered salary is increasing from $6.20 to $6.46. The amount you need to pay to cover your full salary depends on your years of service and salary.

For example, if you are currently paying to cover $75,000 in annual salary you are paying: $75,000 (annual salary) - $61,000 (U-M covered base salary) = $14,000 / 12 x .00620 = $7.23 per month

To cover the same amount in salary beginning January 1, 2018, you will pay: $75,000 (annual salary) - $61,800 (U-M covered base salary) = $13,200 / 12 x .00646 = $7.11 per month

If your salary is $120,000, your current cost is $30.48 per month. For 2018, your cost will be $31.33 per month.

See Paying for Expanded LTD Coverage on the University Human Resources for access to a calculator to help you determine your monthly cost. If you have been paying for coverage on your full salary over $61,000, but your salary is less than the new threshold of $61,800, you will still have coverage on your full salary. Beginning January 1, 2018, your employee contribution will decrease to $0 and you will not have to pay any LTD premiums unless your salary exceeds $61,000 in the future.

Article #770


Posted: 25 Oct, 2013
Every effort has been made to ensure the accuracy of the information in this site. However, if any provision on these documents is unclear or ambiguous, University Human Resources reserves the right to interpret the document and resolve the problem. If any inconsistency exists between this site and any written plans or contracts, the actual provisions of the latter will govern. The University in its sole discretion may modify, amend, or terminate the contents of these documents with respect to any eligible individual - including active employees, retirees, and their dependents.