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TOPIC #2
STATE AWARDS:WHAT ARE THEY
WHEN DO THEY HAPPENWHY DO THEY CAUSE AN
OVERPAYMENT?
Lunch-n-LeavesDisability & Leave Services
DLS Lunch-n-Leaves 3/18/2011
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Voluntary Plan Basics
What is a “Voluntary Disability Insurance Plan”? Private short-term disability coverage plan only for
California resident employees Legal alternative to the mandatory State Disability
Insurance (SDI) Effective 1/1/2004 includes Paid Family Leave (PFL)
known as Family Temporary Disability (FTD) at Stanford
Why is it called “Voluntary”? Because employees can choose to opt out of the VP
and participate in SDI instead
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Voluntary Plan Basics
Legal Requirements Rights under VP must be same as those of SDI Weekly benefit must be the same or greater – never less VP must provide at least one benefit that is greater than
SDI If SDI increases rights/benefits, VP must also
Governing Authority California Unemployment Insurance Code (CUIC), Part 2
Administrative Authority Director of the EDD has the right to issue regulations
interpreting the law. These regulations are contained in Title 22, California Code of Regulations (CCR)
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What is a State Award?
Remember the legal requirement! Weekly benefit must be the same or greater – never
less
A State Award is the SDI weekly benefit amount times 52 weeks
Example:
Impact: Stanford VP must pay at least $650 per week
$650Per week
52 weeks
$33,800
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How: Path of a State Award
Employee files claim
Liberty Mutual sets up claim in
their system
Report of VP Claim (DE 2523)
sent to EDD
EDD enters data into their database
EDD calculates State Award
based on wages during “base
period”
Notice of Computation (DE
429D) sent to employee
Notice of State Award sent to
carrier – Liberty Mutual
Liberty sends Notice of State Award to DLS
Uh-OhNow What?
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State AwardSDI
Stanford AwardVDI
Sample #1: State Award vs Stanford Award
Claim Effective Date 2/22/11
Wage Base Period 9/30/09 – 9/30/10
Wages in Base Period $87,643.64
Weekly Benefit @ 55% $927.00
Claim Effective Date 2/22/11
Wage Base Period 2/21/11
Wages $66,975.50
Weekly Benefit @ 60% $772.79
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Sample “State Award” Notice
Sample Overpayment Notice
How does a State Award Cause an Overpayment?
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State AwardSDI
Stanford AwardVDI
Sample#2: State Award vs Stanford Award
Claim Effective Date 8/14/10
Wage Base Period 3/31/09 – 3/31/10
Wages in Base Period $40,500
Weekly Benefit @ 55% $429.00
Claim Effective Date 8/14/10
Wage Base Period 8/13/10
Wages in Base Period $53,450
Weekly Benefit @ 60% $616.73
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State AwardSDI
Stanford AwardVDI
Sample#3: State Award vs Stanford Award
Claim Effective Date 8/14/10
Wage Base Period 3/31/09 – 3/31/10
Wages in Base Period $0
Weekly Benefit @ 55% $0
Claim Effective Date 8/14/10
Wage Base Period 8/13/10
Wages in Base Period $33,247
Weekly Benefit @ 60% $383.62 – but . . .
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VDI Benefit Limited to State Rate
Refer to VP Statement of Coverage Handout “Benefits will be limited to the State Plan Rate . . .” Found at: http://benefits.stanford.edu/cgi-bin/health_and_life/disability/
Disability during first 90 days of employment What if employee had never worked in California
before?Pre-existing illness or injury during 3 month
period preceding date of hirePlus a few more . . .
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Got Questions?
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