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

This appendix document outlines planned changes to the State of Tennessee's short-term disability (STD) and long-term disability (LTD) insurance plan designs, effective January 1, 2027, under the Department of Finance and Administration's Benefits Administration division. The changes consolidate the current STD offerings from two plans to one unified STD plan while reducing the maximum benefit period from 26 weeks to 13 weeks. For long-term disability coverage, the state is restructuring from four separate plans to a single LTD plan designated as LTD-N with non-contributory funding. A significant modification includes the elimination of conversion and portability options for STD coverage, whereas the existing plan previously allowed employees with at least 12 months of enrollment to convert to individual or non-state-sponsored group policies within 31 days of employment termination. The LTD-N plan introduces a new cost-of-living adjustment feature with a maximum of five annual adjustments, which was not available under the previous plan structures.

The document reflects a streamlined approach to disability benefit administration, moving toward a simpler plan architecture while maintaining mandatory coverage for eligible state employees and higher education agency personnel. These plan design modifications are foundational to the broader RFP procurement process, which seeks a single fully-insured contractor to administer both STD and LTD coverage beginning January 1, 2027. The changes affect all current members who will be automatically transferred to the new contractor, with guaranteed issue coverage and pre-existing condition limitation credits based on their prior enrollment history under the incumbent provider, MetLife.