Agenda Item No.

Washburn University Board of Regents

SUBJECT: Benefit Plan Changes Short Term Disability Insurance


Currently, employees have the option of participating in a long-term disability insurance program that would protect their income if they become disabled and unable to return to work after six months. Employees who have insufficient sick leave, or no sick leave (as in the case of 9 month faculty, who do not earn sick leave) may have considerable difficulty making ends meet with no salary income for the intervening months.

If a short-term disability insurance program were implemented, employees would have the option of electing how much of their salary should be covered and when coverage should start. As with the long-term disability insurance, the short-term disability insurance premiums would be employee paid.

President Farley established the University Benefit Committee in the fall of 1999 to research, review and recommend changes to existing benefits and possible addition of new benefits to the University benefit package. As part of the process to determine what issues are important to University employees, the Benefits Committee received information from the Staff Council based on their survey of employees. Short-term disability insurance was listed as a benefit in which many employees have an interest. The Human Resources office collected information from several companies, and two companies made presentations to the Committee last month.

After hearing the presentations, and receiving additional information from the companies, the Committee has recommended that a short-term disability insurance program be implemented this fiscal year. The insurance premiums will be totally employee paid, on an after-tax basis, thereby allowing the benefit to be tax-free. Of the companies reviewed, the Committee recommends that AFLAC be the provider. (Note: TIAA-CREF, the University's current provider of long-term disability insurance, does not currently offer short-term disability insurance.) The AFLAC program allows employees the greatest flexibility in designing their coverage, which is an important issue to the Committee. AFLAC's credentials are impressive, and as a Fortune 500 company, they have earned Excellent and Superior ratings from the rating industry.




President Farley recommends the Board of Regents approve the establishment of an employee paid short-term disability insurance program, with AFLAC as the provider.

________________________ _______________________________________

(date) Jerry B. Farley, President

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