SHORT-TERM DISABILITY (STD) Presented by: Tammy Usher, (213) for Miles Gibson, (213) Chief Executive Office Risk Management Branch Short-Term Disability 1 County of Los Angeles “To Enrich Lives Through Effective and Caring Service”

STD Eligibility, Purpose & Authority  Only MegaFlex Cafeteria Plan Participants are eligible to receive STD benefits.  STD provides disability income replacement benefits for up to 182 calendar days (minus a waiting period) from the first day of a disability.  STD is governed by Chapter 5.27, County of Los Angeles Flexible Benefit Plan, and Chapter 5.28, County of Los Angeles Non-pensionable Flexible Benefit Plan of the County Code. 2

STD Benefits  The STD Plan offers two benefit options for MegaFlex participants to select from during Annual Enrollment. Core benefit: a continuous 14-day waiting period followed by 70% income replacement; or Additional benefit: a continuous 7-day waiting period followed by 21 calendar days of 100% income replacement, then 80% income replacement for the remainder of the approved STD period. 3

Application Process for STD  To initiate an STD claim, the employee and their health care practitioner must contact the County’s third-party administrator (TPA); Sedgwick CMS (Sedgwick), at or via the web site at:  Both contacts must be made before the end of the waiting period, or a penalty may apply (no benefit for each day the contact is late). 4

STD Approval Process  Once Sedgwick has received all the necessary information, the claim will be processed within 48 hours. Sedgwick will mail a notice of approved STD dates to the employee, and the approved STD dates to the their department for payment. 5

STD Payments  The employee will be paid STD Benefits through their department’s payroll on regular paydays.  The employee will receive their monthly MegaFlex Cafeteria Plan Contribution. 6

STD Payments / Tax  STD benefits are taxed as ordinary income in the year they are received, so state and federal withholdings will be taken on these amounts. 7

STD Denial / Appeal Process  If the claim or an extension is denied, Sedgwick will mail the employee a notice with an explanation for the denial, and information regarding their right to an appeal. 8

Duration of STD Benefits  STD benefits stop when the employee reaches the “maximum duration guideline” for a specific disability, unless Sedgwick grants an extension due to objective medical evidence received. However…  Under no circumstance will STD benefits continue beyond 182 days! 9

Duration of STD Benefits – Part-Time Disability  If the employee can return to work on a part- time basis, they MUST. The employee’s department will be asked to provide Sedgwick with minimum hours and specific days of the week that the department can temporarily accommodate. 10

Use of Time During STD  Any scheduled part-time work hours not worked must be coded as “AWOP” or accrued time. STD time may not be used.  Holidays that occur during a part-time STD period are paid in the same proportion as the other STD benefit days. 11

Use of Time During STD  The employee may not use their accrued time to supplement STD benefits.  However, the employee may “turn on” the substitution of accrued time during the STD Benefit period only one time. It can be for any length of time, but only in whole day increments. Then they may “turn it off” and return to the STD Benefits (if any are left). Use of accrued time will not extend the 182-STD period for the disability in question. The employee is SUBSTITUTING accrued time for STD Benefits. 12

Coordination of Benefits  STD benefits are reduced on a dollar-for-dollar basis by the amount the employee receives from other benefits for the same disability. Note: personally acquired benefits (such as Aflac) are excluded!  “Mega I/A” (A MegaFlex participant with an approved Industrial Accident claim) is the most common “other benefit” that reduces an employee’s STD Benefit. 13

Mega I/A & STD Benefits  A MegaFlex participant must file separate claims for Mega I/A and STD benefits.  The first day of TD payment for a MegaFlex participant is paid at the state mandated Temporary Total Disability (TTD) rate, and may be supplemented with 70% STD.  The state mandated TTD rate is 2/3 (66 2/3%) of the average weekly wage (up to a maximum amount, determined annually under State law.) 14

Mega I/A & STD Benefits  STD included with an I/A will always be calculated at 70%, regardless if an additional (100%/80%) STD benefit was purchased at the time of benefit election. However, the 7 or 14 day waiting period will remain as elected.  If the employee has an approved Mega I/A, and chooses to also call Sedgwick to set-up an STD claim, the total payment will not be more than the higher of the two benefits. 15

Mega I/A & STD Benefits  Mega I/A benefits are not taxed.  STD benefits are taxed as ordinary income in the year they are received.  These benefits are paid by the payroll unit of the employee’s Department for the first six months. After 6 months, TD is paid by the Workers’ Compensation TPA, and if approved, LTD is paid by Sedgwick. 16

Long Term Disability Benefits (LTD)  If a claim is approved for LTD after 182 days of STD, an employee will no longer receive the monthly MegaFlex Cafeteria Plan Contribution.  Sedgwick will review the TTD benefit, and deduct the TTD payment before sending the LTD benefit to the claimant. 17

STD Scenarios  Bob is hurt on the job (in a car accident). His monthly salary is $9,000. He’s awarded $4,228 per month for his Mega I/A benefit. He also files an STD claim for his 100/80% income replacement with a 7-day waiting period. However, since this is a Mega I/A claim, his STD income replacement will be processed by payroll at 70% (not the 100/80% he purchased). [($9,000 x 0.70) - $4,228 = $2,072]. Mega I/A $4,228 + STD $2,072 = Total benefit disability payment $6,

Duration of STD Benefits – Recurrent Disability  If the employee returns to active service for 29 days or less and they file an extension to be off work again for the same disability, the employee would resume benefits where they left off. There would be a resumption of the original 182-day STD period, if not already exhausted. No new waiting period is required. 19

STD Scenarios  If Bob had a shoulder surgery related to the car accident that took him off work, but he had only been back for 29 days, he would resume his original 182-day STD period without a new waiting period. There would be no extension of the STD period to reflect the fact that Bob had returned to work for 29 days. 20

Duration of STD Benefits – Recurrent Disability  If, after an STD period, the employee returns to full-time service for 30 calendar days or more, and then they need to be off work again for the same or different disability, they are entitled to a new 182-day STD period. The employee must complete a new waiting period. 21

STD Scenarios  Bob returns to work after his car accident. After 33 days, his shoulder (which was strained during the car accident) needs surgery. He is forced to go off work again. Although it is clearly a consequence of his initial claim (the car accident), it occurs more than 29 days after his return to work, and is therefore deemed a new STD claim. Bob would need to complete a new waiting period. 22

Duration of STD Benefits – Recurrent Disability  Any return to active service from a previous disability, followed by a separate and unrelated disability will always be cause for a new claim. 23

STD Scenarios  Bob recovers from the car accident and returns to work. On his first day back he slips in the lunch room and breaks his wrist. Since the injury to his wrist is separate and unrelated, this would be a new STD claim requiring a new waiting period, and is entitled to a new 182-day STD period. 24

Duration of STD Benefits – Recurrent Disability  If a new disability is incurred from a separate and unrelated cause, and there has not been a return to active service, either while STD benefits were being received or since the last STD benefit payment, there is a continuation of the original 182-day STD period. 25

STD Scenarios  After recovering from his car accident, Bob does not return to work, but continues his absence by using accrued time. During the absence he breaks his wrist. Even though the injury to his wrist is separate and unrelated, this would be a continuation of his original 182-day STD period with no new waiting period. 26

STD Reminders The employee must…  File an STD claim timely (even if it is a Mega I/A).  File for an STD extension in timely manner.  Accept an offer of County employment which is consistent with work restrictions.  Provide satisfactory evidence of disability.  Cooperate with the Chief Executive Office or the STD administrator. 27

Other Resources An STD Pamphlet and Booklet are available on the County Medical Panel Network website at: 28

Contact Information The status of an STD claim may be obtained from: Sedgwick’s STD Specialist: Mirna (818) FAX #

QUESTIONS? 30