Policies, Union Contracts, Handbooks > Support Staff Policies and Procedures

Optional Employee-Paid Life Insurance Plan

(Revised 07/08)

Policy

Applies to: Regular 50% time or more faculty and academic staff, University support staff, flexible appointees, and official MSU retirees

The University offers an Optional Employee-Paid Life Insurance Plan to eligible employees.

The benefit is payable in the event of death.

Eight levels of life insurance are available. Dependent options are available also.  See charts below for life insurance coverage levels and monthly rates: 

PLAN	COVERAGE LEVELS FOR EMPLOYEE	COVERAGE LEVELS FOR SPOUSE	COVERAGE LEVELS FOR CHILDREN
Optional Employee- Paid Life Insurance	1 x Base Annual Earnings 2 x Base Annual Earnings 3 x Base Annual Earnings 4 x Base Annual Earnings 5 x Base Annual Earnings 6 x Base Annual Earnings 7 x Base Annual Earnings 8 x Base Annual Earnings   Maximum Benefit: $2,000,000	$10,000   $25,000   $50,000   $75,000 $100,000 $125,000 $150,000 $175,000 $200,000	$5,000 $10,000 $15,000 $20,000 $25,000

Optional Employee-Paid Life Insurance Monthly Rates

EMPLOYEE RATES PER $1,000 OF COVERAGE BY AGE	SPOUSE RATES PER $1,000 OF COVERAGE BY AGE (1)	RATES FOR CHILDREN PER $1,000 OF COVERAGE
<25:  $0.031 25-29:  $0.037 30-34:  $0.050 35-39:  $0.057 40-44:  $0.063 45-49:  $0.094 50-54:  $0.144 55-59:  $0.270 60-64:  $0.414 65-69:  $0.796    70+:  $1.291	<25:  $0.050 25-29:  $0.060 30-34:  $0.080 35-39:  $0.090 40-44:  $0.100 45-49:  $0.150 50-54:  $0.230 55-59:  $0.430 60-64:  $0.660 65-69:  $1.270    70+:  $2.060	$0.095 per $1,000 of coverage – age is not a factor in rates for children.     Premium covers all children (e.g., you don’t have to multiply it by 4 to cover 4 children.)

1.  Spouse rates are based on the age of the employee, NOT the age of the spouse.

The benefit has no cash or loan value.  Age-related benefit reductions will occur for employees.  Benefits will be reduced to 65% at age 65.

Premium contribution: The program is funded entirely from employee premiums and rates are subject to future group experience. The employee's monthly contributions are described in the chart above.

Application for enrollment:

Employees should enroll within 60 days of initial employment or appointment to an eligible status. If not previously enrolled in the dependent option, newly acquired dependents may be added within 31 days of their becoming eligible dependents or during an annual open enrollment period. Only one dependent option is required for all dependents current and born thereafter.

Enrollment/Change form and Beneficiary Designation form are available from MSU Human Resources Benefits.

Employees who request to increase their life insurance coverage by one level or more, during the annual open enrollment period, will be required to complete an evidence of insurability. The University's annual open enrollment period is usually in late April or early May and coverage changes become effective July 1.

A new hire must elect coverage within 60 days or an evidence of insurability is required.  An evidence of insurability is also required, of a new hire, if they elect an amount greater than the lesser of 3 times their base annual earnings or $500,000.

Effective date of benefit: Coverage will be effective on the date of appointment if enrolled within 60 days of appointment or eligible status, except as follows:

1. Employees not actively at work on that day will become covered on the day they return to work.
2. If an evidence of insurability is required during an annual open enrollment period, coverage will be effective when approved by the carrier.

1. Coverage will terminate on the last day of the month following the last deduction taken for this benefit.
2. Employees who officially retire will be given the option of maintaining coverage (if under age 70) by making direct payments to MSU Human Resources Benefits. If premium payments are not made, coverage will be terminated on the last day of the month for which the premium was paid.
3. Coverage will terminate on the date an employee becomes an official retiree, if age 70 or older.
4. Employees on an unpaid leave of absence who wish to maintain coverage will be billed and must forward the full premium payment to MSU Human Resources Benefits. Coverage allowed to lapse due to non-payment of premiums will automatically be reinstated to the coverage in effect prior to the leave. (Employee must return to an eligible status.)
5. Dependent coverage terminates upon the earliest of an employee's:
   • termination,
   • retirement if age 70 or over, or
   • non-payment of dependent option premium.

Portability/Conversion: Coverage may be ported/converted to an individual policy by directly contacting the carrier within 31 days of termination of coverage.
 

Procedure

Enrollment in benefit plan:

Employee:

1. Must enroll at MSU Human Resources Benefits within 60 days of initial employment or appointment to an eligible status.
2. Must add new dependent(s) within 31 days of becoming eligible dependent(s), if dependent option was not previously selected.
3. Enrollment beyond these periods will require completion of an evidence of insurability during the annual open enrollment period and is subject to the approval of the carrier.

Changes in coverage or personal information:

Employee:

1. Changes in amount of coverage:
   • may reduce or cancel coverage at any time and
   • may increase one level or more at annual open enrollment period by completion of an evidence of insurability which is subject to approval of carrier.
2. Change of beneficiary: may change beneficiary at any time.

Filing a claim:

Department:

1. Notify MSU Human Resources Benefits immediately upon the death of an employee/retiree.
2. Submit Personnel Action Notice (PAN) form to MSU Human Resources Employee Records upon death of an employee.
3. Refer questions concerning benefits of deceased employee/retiree to MSU Human Resources Benefits.

MSU Human Resources Benefits:

1. Coordinates notification to appropriate University offices.
2. Notifies carrier.

Premium payment (active employees):

Employee: Authorize payroll deductions for this benefit.

MSU Human Resources Benefits: Process payroll deduction from last paycheck received in the month, for coverage the following month.

Premium payment (employees on unpaid leave of absence and retirees):

MSU Human Resources Benefits: Automatically bills the employee/retiree for premium amount due.

Reinstatement of coverage (employees returning from unpaid leave of absence):

MSU Human Resources Benefits: Upon return from unpaid leave (to an eligible status) automatically reinstates the coverage in effect prior to the leave, if terminated for non-payment of premiums.

Refer questions to:MSU Human Resources Benefits (telephone 517-353-4434, e-mail)