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R&I "Know Your Benefits" - August 9, 2011
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R&I "Know Your Benefits" - August 9, 2011

 

As mentioned previously, the FDX MEC Life Plan will be changing from Unum to ING effective November 1, 2011. This move will provide a 15% rate decrease and an opportunity for guaranteed issue coverage to $300,000 for the member and $50,000 for their spouse. Coverage will be available for the pilot and their spouse to $1,500,000 subject to proof of insurability above the guaranteed issue amounts.

 

Know Your Benefits - August 9, 2011

As mentioned previously, the FDX MEC Life Plan will be changing from Unum to ING effective November 1, 2011. This move will provide a 15% rate decrease and an opportunity for guaranteed issue coverage to $300,000 for the member and $50,000 for their spouse. Coverage will be available for the pilot and their spouse to $1,500,000 subject to proof of insurability above the guaranteed issue amounts.

With this opportunity, each member may wish to determine their current coverage levels as well as their individual needs. Of course, that requires an understanding of the coverage available, and the R&I Committee is aware that this plan and the various benefit provisions of the Collective Bargaining Agreement can cause confusion amongst the pilot group. The purpose of this article is to provide an understanding of the Basic Life Insurance listed in Section 27.B. As always, this is merely an overview and not intended to replace the Pilot Benefit Book or the insurance policies. In future communications, we will discuss the Optional Life Plan in 27.C. and later compare that coverage with our new offering from ING.

Basic Life Insurance is contained in CBA Section 27.B. As stated in 27.B.4, this insurance begins on the later of a pilot’s date of hire or the first active day at work. The coverage amount listed in 27.B.3 is $800,000 but may be decreased by a pilot to $300,000, $400,000, or $500,000 during the annual health enrollment period. Keep in mind that an increase in coverage would require proof of insurability. As mentioned in an earlier Know Your Benefits, the value of Company paid life insurance coverage in excess of $50,000 is considered imputed income by the IRS. In easier to understand terms, the value of this coverage is considered non-cash earnings and is subject to Federal, State and FICA (Medicare and Social Security) taxes. This taxable amount is listed on your pay stub as IMPINCLIFE.

A final provision worth discussing is when coverage ends. Like the other provisions mentioned, when coverage ends is explained in full in the Pilot Benefit Book. Your Basic Life Insurance coverage ends when employment or furlough pay ends, but may be converted to an individual whole life insurance policy.

We provide these “Know Your Benefits” articles so that you may better understand CBA provisions related to Retirement & Insurance. In the next Know Your Benefits, we will explain the provisions of Optional Life Insurance in 27.C. Prior to the upcoming enrollment, each member will have the opportunity to compare these benefits and our new offer. Hopefully, all will find this explanation helpful in that comparison. If needed, this article will be maintained on the R&I Committee page of the fdx.alpa.org website for your reference.


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