CURRENT NEWS

SHORT TERM DISABILITY BENEFITS

The following describes the Short Term Disability (STD) Benefits that have been historically bundled with the Long Term Disability (LTD) Benefits under the ICSO Health & Welfare Plan. The Named Fiduciaries have determined that it is best to fully disclose the complete package of all benefits and, therefore, the cost of the STD program benefit has been separately billed to all employers.

Aetna will provide an employer with administrative services for their Short Term Disability plan. There is no insurance risk involved with this agreement. Aetna provides administration services, but the employer is liable for the actual claim payment. A fee is charged for these services. The size of the fee is determined by the specific services provided and the amount of work generated by the plan.

There are essentially two categories of services offered to employers under the ASC process, i.e., Advice Only and Full Services.

Under an “Advice Only” arrangement, Aetna performs all clinical case management services and reports certified durations and denied claims to the employee and the employer. The employer calculates benefits and disburses funds.

In a “Full Services” arrangement, Aetna receives the claim, certifies the period of disability, calculates benefit amounts, and issues payments. The employer reimburses Aetna for the payments through wire transfers.

A non-standard option exists whereby Aetna performs all the services outlined under the “Full Services” arrangement except issuing benefit payments (cutting the check). This is referred to as “Benefit Determination Only” (BDO), and requires prior Underwriting Manager and Disability Product and Services Head (claim office) approval.

The fees charged for ASC arrangements are usually stated on a per employee per month (PEPM) basis. Fees are based on the anticipated work involved with the administration of the plan. Advice Only arrangements do not involve as much work as Full Services arrangements. Full Services is more expensive than Advice Only due to the work involved in determining the benefit, issuing checks, and reconciling payments.