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Are life insurance benefits changing?
No - All benefit levels remain the same.
How do we get the lower rate?
The new rate went into effective automatically on July 1st. No action is required on your part.
Why did the rates go down?
The Trust changed from a participating to a non-participating life insurance contract.
The participating contract fell under the Defined Liability Funding (DLF) mechanism that is also used for funding the Statewide Benefit Cooperative (SBC) health plans. Click here for more information about DLF (you will need your SBC web site login).
A non-participating life insurance contract is very common in the market and what most companies outside of the SBC purchase. With a non-participating contract, you pay a set premium to the insurance company and they pay all of the claims.
Under this arrangement, the SBC will no longer retain surpluses when life claims fall below paid premiums. However, any surpasses from the life contracts were relatively small when compared to the health plan. Therefore, the Trustees felt that reducing your premiums under a non-participating contract would yield a much greater benefit to each co-op than the surpluses received (if any) from the participating contract.
The Trustees are confident that remaining with a participating contract and DLF mechanism for the SBC health plans is clearly in the best interest of all co-ops. |
