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 $61,000 in 2017 mean I will pay less to cover my full salary after January 1?
The covered university base salary is increasing from $60,000 to $61,000, and the rate per $1,000 of coverage above the university covered salary is increasing from $5.95 to $6.20. 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) - $60,000 (U-M covered base salary) = $15,000 / 12 x .00595 = $7.43 per month
To cover the same amount in salary beginning January 1, 2017, you will pay: $75,000 (annual salary) - $61,000 (U-M covered base salary) = $14,000 / 12 x .00620 = $7.23 per month
If your salary is $120,000, your current cost is $29.75 per month. For 2017, your cost will be $30.48 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 $60,000, but your salary is less than the new threshold of $61,000, you will still have coverage on your full salary. Beginning January 1, 2017, 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.
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