Chief Executive Office

Risk Management

Return To Work, STD and LTD Unit

Presented by: Mark LeBlanc

The County of Los Angeles (County) established the Short-Term Disability (STD) Plan which offers an income replacement to ill, injured, or pregnant employees who are MegaFlex Cafeteria Plan employees.

The STD Plan offers two benefit options for MegaFlex employees 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.

To initiate an STD claim, an employee must contact Sedgwick CMS at 1-800-786-8600 or at their website www.sedgwickcms.com/ Calabasas

Claims decisions will be processed within 48 hours of receiving the completed claim.

Claims must be filed before the end of the waiting period, or a penalty may apply.

If the claim is denied, Sedgwick will supply information on how to appeal.

STD benefits may continue for up to a 182 day period

(6months) from the injured employee’s first day of disability.

The waiting period is not covered by STD benefits. An employee may use accrued time to cover those absences.

STD benefits stop when the injured employee is no longer disabled, or at the conclusion of the 182 day period beginning from the first day of disability, whichever occurs first.

STD income replacement benefits are taxable as ordinary income.

An employee may not use accrued time to supplement STD benefits.

An employee may “turn on” and “turn off” substitution of accrued time once for any length of time, but only in whole day increments.

Use of accrued time does not extend the 182 day STD period.

STD benefits are reduced on a dollar-for-dollar basis by the amount an employee receives from “other benefits” for the same disability.

Mega I/A (MegaFlex participant with an Industrial Accident) is the most common.

Private benefit plans are excluded.

Only Megaflex plan employees are entitled to receive Mega I/A Temporary Disability benefits in connection with an admitted Workers Compensation (WC) claim.

Mega I/A benefits are not taxable.

Short Term Disability Benefits are taxable like ordinary income.

In some cases, an employee will apply for STD benefits and file a WC claim concurrently. In most of those cases, STD will be approved by Sedgwick before a compensability decision is made by the WC TPA.

A Megaflex employee does not receive 70% salary

continuation. They are paid the state mandated Temporary Total Disability (TTD) rate by their Department, which is based upon the employee’s Average Weekly Wage (AWW).

If the 70% STD income replacement calculation is more than the TTD payment, a Megaflex employee will receive the TTD payment, and the difference between the TTD and STD calculated amount.

The total payment for the two benefits will not exceed the 70% STD benefit, regardless of which STD income replacement option was selected.

Additionally, when authorizing Mega I/A time, the WC TPA does not withhold payment for the 7 or 14 day STD waiting period.

Mega I/A calculation of employee with 2011 date of injury:

TPA Claim’s Examiner Calculation:

Salary = $6,000 AWW = $1384.72 TTD Rate =$923.15 Mega I/A benefit is $3,692.60 (Non-Taxable TTD) Department Payroll Calculation:

$6,000 x 70% = $4,200 $4,200- $3,692.60 =$507.40 (Taxable STD)

Department payroll receives a benefit notice from the WC TPA authorizing lost time. Depending on whether Sedgwick is authorizing the STD portion, they may also receive the STD Voucher email from Sedgwick. In the event Sedgwick denies authorization for STD benefits, department payroll will still process payments for Mega/IA TTD.

If Sedgwick approves STD benefits, payroll will then calculate and coordinate the two benefits as previously described.

Payment information is then sent to the Auditor Controller, and payments are issued to the employee on regular County paydays just like a regular paycheck, i.e. with County health plan contributions.

If the Mega I/A benefit is exhausted (six month maximum), and the employee continues to be disabled, it is the responsibility of the WC TPA to initiate post TTD benefits.

Note: If there is a full-time physical return to work of more than 29 calendar days, and the employee is off work again due to the same disability, the employee may be eligible for a new 182-day Mega I/A period.

The Mega I/A benefit will count toward the 104 week TTD Maximum.

Should the disability period exceed the maximum STD benefit period of 182 days, the employee may qualify for Long-Term Disability (LTD) benefits.

LTD benefit applications may be sent to STD claimants by Sedgwick after four months of continuous absence from work due to a disability.

More STD Information is available on the Chief Executive Office Return To Work Website at:

http://ceo.lacounty.gov

Sedgwick’s STD Specialist: Mirna Ramos (818) 591-7644

Email: mirna.ramos@sedgwickcms.com