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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.