Disability 101 WSCFF Life & Disability Plan

1. Disability 101WSCFF Life & Disability Plan Presented by: DiMartino Associates, Inc. Becky Wallen February 11, 2010

2. DiMartino Associates, Inc. • Benefits Consulting Firm formed in 1990 by Greg DiMartino • In partnership with WSCFF since 1999 • Provide consulting and member service for the WSCFF Life, Disability, Additional Life, and Medical Expense Reimbursement Program (MERP) for retirees

3. Purpose of Disability Insurance • Provides a benefit if you are unable to earn income as a firefighter due to injury or illness • Protects from loss of income- on or off the job • Assists firefighter back into an occupation to earn income • Rehabilitation, education, re-training…

4. Group vs. Individual Insurance • The WSCFF programs are considered “group” insurance providing protection for your entire membership, and are offered on a local-by-local basis • All members covered by the bargaining agreement should be enrolled in the plan • This is not a voluntary, individually defined plan • Group coverage provides the most extensive coverage at competitive group premium rates

5. Your Plan: Life Insurance • $15,000 Life/AD&D Insurance; $1,000 Spouse Life, $1,000 Child Life • AD&D Insurance pays an additional benefit if a death or dismemberment (as outlined in contract) is caused by an accident • Other AD&D benefits include: • Line of Duty, Higher Education, Seat Belt/Air Bag Benefit, Occupational Assault

6. Your Plan: Long-Term Disability • Provides 60% of your pre-disability earnings up to $5,000 a month (fully covers annual salary up to $99,996) • Benefits are payable after 60 days of disability • Benefits may last until Social Security Normal Retirement Age (SSNRA)

7. Your Plan: Long-Term Disability • 24 month Own Occupation of disability • During first 24 months you are on disability, you only need to be unable to do your own job • After 24 months, you are considered disabled if you cannot do a job you are reasonably qualified for and earn at least 60% of your pre-disability earnings • Premium payment is waived on all coverages once you start receiving LTD benefits

8. On-the-Job vs. Off-the-Job Disabilities • The Standard coverage is primarily for off the job disabilities • For on the job disabilities, the Standard will pay you a minimum benefit of $100/month • If L&I ends, and you’re still disabled according to the Standard contract, they will pay you a 60% benefit

9. Taxation of Your Disability Benefit • If the premium is paid by the employer, the disability benefits will be taxed • If the premium is paid by the employee POST-TAX, the disability benefit is tax-free • 60% of your gross salary really means a replacement of 75% or more of your paycheck • If you have a choice, we always recommend paying disability premiums post-tax

10. Deductible Income • Deductible Income is income from other sources that reduces the Standard disability benefit you receive • Keep in mind: While receiving a Standard disability benefit, if you also receive other income, benefit, compensation, etc., it most likely will be considered deductible income • Exceptions to deductible income: Longevity pay, Kelly Days, early (actuarially reduced) retirement benefits for which you are eligible but don’t receive

11. Examples of Deductible Income • Sick pay, personal leave pay, severance pay • Work earnings (for the first 12 months of your disability, The Standard only offsets work earnings that exceed 100% of pre-disability earnings when combined with The Standard benefit) • Workers’ Compensation Benefits • Social Security disability benefits • Disability benefits from another group plan • Your Provident disability benefits are NOT considered deductible income • Normal retirement benefits like LEOFF, PERS (but The Standard does not require you take these benefits when they are actuarially reduced) • Unemployment benefits

12. Integrating with Sick Pay • Standard will allow you to receive 100% of your predisability earnings by combining sick pay with The Standard disability benefit • What this means is your employer allows you to “burn” sick leave at less than 100%, and then Standard pays an integrated benefit up to 100% of predisability earnings • Requires bargaining language or MOU that states this procedure

13. Claim Example #1- No deductible Income Firefighter earns $5,000/month ($60,000 annually) Firefighter pays premium for coverage – benefit is not taxed Benefit is 60% of your salary (before taxes) on your last full active day at work before the disability Gross LTD benefit Standard pays is: 60% * $5,000 = $3,000

14. Claim Example #2- Partial Disability Firefighter is disabled but can work light duty and is compensated at 70% ($3,500) by the employer Gross LTD benefit is $3,000 ($5,000 * .60) Work earnings are $3,500 Total combined income - $6,500 Amount exceeds 100% - $1,500 Adjusted Standard benefit ($3000 – 1500) - $1,500 Total income to firefighter - $5,000

15. Filing a Claim • Claim packet with 3 components – an employer, employee & physician statement • You can file your claim any time after you are disabled – you do not need to wait 90 days • Information can be sent through DiMartino offices (recommended) or directly to The Standard • Once Standard receives all 3 components, it takes about 7 business days to process claims

16. Additional Life Insurance • Members can purchase up to an additional $500,000 of Life insurance ($250,000 of Spouse Life) • Guarantee Issue amount of $100,000 ($20,000 for Spouse) • Must be offered as a Local with a 20% minimum participation requirement • Rates are age-graded

17. Additional Life Insurance What is Guarantee Issue? • $100K of coverage- No medical underwriting required! • Amounts over $100K will require underwriting • Only available during initial open enrollment period (60 days from effective date) or to new hires, thereafter • After initial open enrollment period, medical underwriting required on all amounts

18. Additional Life Insurance Premium Example- Refer to handout Volume * Rate / $1,000 = Monthly Premium 35-year old member Rate per $1,000 is 0.09 $100,000 * 0.09 / $1,000 = $9.00 $300,000 * 0.09 / $1,000 = $27.00 $500,000 * 0.09 / $1,000 = $45.00

19. Additional Life Insurance • I have with me today: • Additional Life flyers • Additional Life applications • Medical History Statements • I am available after the presentation for specific questions and to help with enrollment

20. Administration of Program • DiMartino Associates, Inc., is your liaison with the insurance carrier (Claims: Becky Wallen) • Our office administers the billing and eligibility (Shannon Brauner) • We’re here to help in educating your membership and providing member service

21. Contact Information • Have additional benefit questions? • Need help filing a claim? Please don’t hesitate to contact us! DiMartino Associates, Inc. 1301 5th Ave Suite 3701 Seattle, WA 98101 Toll free 800/488-8277 Becky Wallen – becky@dimarinc.com Karni Adamson – karni@dimarinc.com