Appendix_7.9_RFP_31786-00186%20Disability%20Plan%20Changes%20Effective%20January%201%2c%202027%20REVISED.pdf

This document from the Department of Finance & Administration's Benefits Administration outlines changes to the State's Short Term Disability (STD) and Long Term Disability (LTD) insurance plans, effective January 1, 2027. For STD coverage, the State is consolidating from two plans (STD A and STD B) to a single plan option (STD A). The maximum benefit period under the new structure is 13 weeks, reduced from the previous 26-week maximum available under STD A. For LTD coverage, the State is reducing offerings from four separate plans (LTD 1, LTD 2, LTD 3, and LTD 4) to a single plan designated as LTD-N (LTD 3) with non-contributory funding. These changes represent a significant streamlining of disability insurance options available to State employees.

Under the new LTD plan, the Cost of Living Adjustment (COLA) feature will not be included, eliminating the previous maximum of 5 adjustments capped at the lesser of the Consumer Price Index for Wage Earners (CPIW) or 3 percent that existed in LTD 3 and LTD 4. Conversion and portability options—which previously allowed members enrolled for at least 12 calendar months to convert to individual or non-State sponsored group disability policies within 31 days of employment termination due to reasons other than disability—will no longer be offered under either the new STD or LTD plans. These modifications represent a consolidation of benefits and a reduction in employee flexibility regarding disability insurance continuation upon separation of employment.