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Exempt Employee Life Insurance Benefits

About Exempt Basic Life Insurance

Overview

The State of Ohio provides certain exempt employees who have more than one year of continuous state service with basic term life insurance benefits. Life insurance is designed to provide financial help to your family should you die unexpectedly, which typically replaces approximately one year of income that would have been generated by your job.

As an exempt state employee, your basic life insurance is provided to you at no cost and with no evidence of insurability.

Key points about your life insurance policy

1. The amount of life insurance is equal to one times the employee’s annualized rate of pay, rounded up to the next closest $1,000.
2. There is no cash value or surrender value under this policy.
3. In the event of death while performing normal state of Ohio job duties, in addition to the basic life benefit, beneficiaries may be eligible to receive one times the employee’s annualized rate of pay under the accidental death provision of the policy.
4. The policy also includes a dismemberment benefit, while performing normal state of Ohio job duties, which can provide a portion of the death benefit to the employee for the loss of vision, hearing, a limb or other covered loss.
5. Enrollment in the plan is automatic. Employees simply need to designate a beneficiary when they are notified they have become eligible for the plan. Coverage is not available under this plan for spouses or dependent children.
6. Eligibility for the plan ends on the last day of the month in which you cease to be employed by the state.
7. Conversion to an individual policy is an option when you leave state service. However, you must enroll in a policy within 45 days of the end the month in which your employment with the state ends or within 45 days from the date of the conversion letter you receive from Minnesota Life, whichever is later. 

How Much Coverage Do I Have?

The benefit amount provided is:

An amount equal to your annualized rate of pay rounded to the next highest thousand. Annualized rate of pay is computed based on:

  • 1,040 hours if you are a part-time permanent employee;
  • 2,080 hours if you are a full-time permanent employee; and
  • 2,704 hours if you are a firefighter in the Adjutant General’s Office.

Group term life insurance coverage (i.e. basic life insurance) of $50,000 or less provided to you by your employer is excluded from your income. The cost of insurance protection in excess of $50,000 paid by your employer, however, is taxable income and is shown on your W2. You may not limit the amount of your life insurance coverage or waive your life insurance coverage to avoid this tax.

Accelerated Death Benefits
If you have been diagnosed with a terminal illness and according to a physician, have less than 12 months to live, accelerated death benefits allow you to take a cash advance of a portion of your total life insurance benefit. You can request up to 100 percent of the life policy amount. 

Eligibility

Basic life insurance is provided to:

  • All permanent exempt employees of the state of Ohio, both full-time and part-time, who have completed one year of continuous service;
  • Judges and other elected or appointed officials of the State of Ohio serving fixed terms of office who are not classed as per diem appointments.

Continuous state service means the uninterrupted service in which an employee is paid directly by warrant of the director of budget and management where no break in service occurs. The following qualifications apply:

  • Reinstatement to state employment within 31 days does not constitute a break in continuous service.
  • Employees on authorized disability leave before the one year of continuous service is complete will be credited with the period of service prior to their leaving once employment resumes (the time spent on disability leave does not count).
  • Permanent exempt employees that are separated from state service through a layoff will not have a break in service if the employee is reinstated from either the recall list or reemployment list within one year of the effective date of the layoff.

 

Beneficiary

A beneficiary is a person(s) or financial institution (i.e. trust fund) named in an insurance policy as the recipient of the funds in the policy in the event the policyholder dies. You may also want to name a secondary or “contingent” beneficiary, in case you outlive the first beneficiary. Proceeds of a life insurance policy are typically tax-exempt with the exception of any interest earned.

If you do not name a beneficiary or none of your beneficiaries survive you, equal payment is made to the first of the following:

1. Your spouse;
2. Equal shares to your children;
3. Equal shares to your parents;
4. Equal shares to your sisters and brothers; or
5. Your estate.

If there is no living beneficiary, the proceeds will be paid to your estate and will have to go through probate proceedings, resulting in a possible delay before your family receives the proceeds. If the proceeds go into the estate, these proceeds may be subject to estate taxes.

When you become eligible for basic life insurance, you should receive a letter and beneficiary form in the mail from Minnesota Life that you can complete and mail directly to Minnesota Life. You also can designate your beneficiary online at lifebenefits.com. The beneficiary form also can be printed off the DAS website under the forms section of the website. The beneficiary form lets you name the beneficiary of your basic life insurance policy.

Note: If you have both basic and supplemental life insurance with Minnesota Life, the beneficiary you designate for one of the policies will be the same beneficiary for the other policy. Whichever beneficiary you designate last will apply to both policies. Therefore, it is not possible for you to have a different beneficiary for each of the policies.

You may change your beneficiary at any time by completing a new Beneficiary Designation Form, or online via the Minnesota Life website at lifebenefits.com. The change is not effective until it is recorded by Minnesota Life. Once recorded, it will take effect as of the date the form was signed, or the date the beneficiary designation was made online. However, if a death occurs before the change request was received, payments already made will not be altered.

Conclusion of Coverage

Coverage under your basic life insurance policy will terminate at the end of the month in which you separate from state service.

During a Layoff

If you are laid off from state employment, you may have the option to continue basic life insurance at group rates for one year. If you choose to do so, you will need to pay a full year’s premium at the time you are laid off. You can find the form (ADM 4302) online, or from your human resources office.

After the first year, the policy can be converted to an individual policy. If you return to work within one year from the date you were laid off, any unused premium will be refunded to you.

During a Disability

If you are on approved disability leave, the state continues to pay for your life insurance premium for up to one year.

Conversion to an Individual Policy

Once you are no longer employed with the state of Ohio, through any means except layoff, your basic life insurance coverage will terminate and you will have the opportunity to either convert or port your coverage. You may exercise only one of these options which are explained in the Conversion and Portability sections below.

Conversion

The conversion feature allows you to transfer your basic (group) life insurance to a permanent (cash value) insurance. It provides life-long protection as long as you continue to pay the premiums. The premiums are based on your age at the time of purchase and remain level. You may not convert the occupational accidental death and dismemberment feature of your coverage.

If you elect to convert your policy, you must apply for the individual policy and submit the first premium payment to the insurance company within 45 days of the end of the month in which your employment with the state ends, or 45 days from the date of the conversion letter you receive from Minnesota Life, whichever is later.

Portability

You also may port your basic life insurance policy. The employee can port coverage if they are not disabled at the time of separation from service and are under the age of 65. The employee would need to have been insured under the group’s policy for at least 12 consecutive months. This is term life coverage and the maximum amount that can be converted is $1,000,000 or the current face amount, whichever is less. The minimum amount is $10,000. Portability is a less expensive option than the conversion option because the coverage provided remains term insurance and does not build cash value.

To qualify for the portability option, you must apply for the continuation within 45 days of the end of the month in which your employment with the state ends, or 45 days from the date of the portability letter you receive from Minnesota Life, whichever is later. You do not need to provide satisfactory evidence of insurability (proof of good health).

About Exempt Supplemental Life Insurance

Overview

Exempt State of Ohio employees are eligible to enroll in a supplemental life insurance program, administered by Minnesota Life, at their own cost. This benefit is available upon hire (there is no waiting period) and provides benefits in addition to the state-paid basic life insurance policy that becomes effective after one year of continuous state service.

Some key points about the policy include:

  • The minimum electable benefit is $10,000.
  • The maximum benefit available is up to eight times your annualized rate of pay, or $600,000, whichever is less.
  • Some levels of coverage will require that you provide evidence of insurability (proof of good health).
  • You may increase your coverage at open enrollment to the lesser of two times your basic annual earnings or $150,000 without providing proof of good health.
  • You may purchase life insurance for your spouse up to $40,000. Spousal coverage in excess of $10,000 requires proof of good health.
  • You may also purchase life insurance for your dependent children up to $7,000.
  • Supplemental life insurance is portable.

Rates

Exempt Supplemental Life Insurance Rate Chart

(Monthly Costs per $10,000 of Insurance Coverage)

Age Non-smoker Smoker
Under 25 $0.49 $0.64
25-29 $0.49 $0.64
30-34 $0.60 $0.64
35-39 $0.68 $0.95
40-44 $1.08 $1.45
45-49 $1.67 $2.42
50-54 $2.59 $3.73
55-59 $4.16 $5.54
60-64 $6.30 $8.49
65-69 $10.23 $15.24
70 and over           $17.34                  $27.29          


Child Life: $0.82 for a maximum of $7,000 of insurance coverage per month

Supplemental Life Insurance Example:

Tom is 38 years old and a non-smoker. He decides to buy an additional $40,000 in coverage for himself and $20,000 in coverage for his wife (who is 40 years old and a smoker).

The cost of Tom’s supplemental coverage is 68 cents per $10,000 of coverage, for a monthly cost of $2.72 (4 x 68 cents = $2.72).

The monthly cost for Tom’s wife is $1.45 per $10,000, or $2.90 (2 x $1.45 = $2.90).

Enrollment and Eligibility

Full-time permanent employees, part-time permanent employees, judges and other elected officials serving fixed terms of office, who are not classed as per diem appointments, are eligible for supplemental life insurance benefits. To be eligible, you must be actively at work and performing your normal duties on the effective date of coverage.

At Open Enrollment Without Evidence of Insurability

If you are purchasing supplemental life for the first time, you may buy up to two times your annualized rate of pay or $150,000, whichever is less. If you are currently enrolled, during open enrollment you may increase your coverage in $10,000 increments up to two times your annualized rate of pay or $150,000, whichever is less.

At Open Enrollment With Evidence of Insurability

During open enrollment, you may buy up to eight times your annualized rate of pay or $600,000, whichever is less, with evidence of insurability.

At Hire or When Promoted to an Exempt Employee

As a new exempt employee or when promoted from a bargaining unit employee to an exempt employee, you have 90 days from your hire or promotion date to purchase coverage up to three times your annualized rate of pay or $500,000, whichever is less, without evidence of insurability; however, with evidence of insurability you may purchase up to eight times your annualized rate of pay or $600,000, whichever is less. If you apply for more than the allowable amount of coverage (an amount that requires you to submit evidence of insurability), you will initially be approved for the maximum allowable amount that can be purchased without evidence of insurability. 

For Your Dependents

To elect supplemental life insurance for your dependents, you must be covered under or enrolled in supplemental life insurance for yourself. You can purchase supplemental life insurance for your spouse and children:

  • At open enrollment; or
  • Within 90 days of hire; or
  • Within 31 days of acquiring a new dependent.

The effective date of your supplemental coverage will vary depending on when your enrollment is processed by Minnesota Life.

Supplemental life insurance provides up to $40,000 coverage for your spouse; $10,000 is available without evidence of insurability. If you apply for $20,000, $30,000 or $40,000 in coverage for your spouse, Minnesota Life will mail you a medical questionnaire that must be completed and returned to them.

Supplemental life insurance in the amount of $7,000 for each child from birth until age 26 is available for a single monthly premium of 82 cents.

Cancelling or Reducing Coverage

You may cancel or reduce your supplemental life coverage at any time by submitting a written request to Minnesota Life. Coverage will be cancelled or reduced effective the first of the month after which your request is received and processed by Minnesota Life.

Consider the following important points when choosing to cancel or reduce your supplemental life coverage:

  • Once coverage is reduced or cancelled, you may not enroll again until the next open enrollment period unless you experience a qualifying life event;
  • Once coverage is cancelled or reduced for either yourself and/or your dependents, evidence of insurability will be required for any future enrollment for supplemental life coverage, including during open enrollment and qualifying life events. You may be required to submit medical documentation and your coverage election may be approved or rejected by Minnesota Life based upon medical underwriting results.

How do I Collect Benefits?

When a covered employee dies, benefits are paid to the beneficiary (or beneficiaries) on file. When a covered dependent dies, benefits are payable to the covered employee upon written proof of death. To file a claim, call Minnesota Life at 866-293-6047.

Accelerated Death Benefits
If you have been diagnosed with a terminal illness and according to your physician, have less than 12 months to live, accelerated death benefits allow you to take a cash advance of a portion of your total life insurance benefit. You can request up to 100 percent of the supplemental life policy amount, up to $1,000,000. Accelerated death benefits are available for spouse or dependent coverage.

Beneficiary

Benefits are paid to your designated beneficiary in the event of your death. You may change your beneficiary at any time by completing a new Beneficiary Designation Form. You also can designate your beneficiary online at lifebenefits.com. The beneficiary form can also be printed off the DAS website under the forms section. 

If you do not name a beneficiary or none of your designated beneficiaries survive you, payment is made to the first of the following:
1. Your spouse;
2. Equal shares to your children;
3. Equal shares to your parents;
4. Equal shares to your sisters and brothers; or
5. Your estate.

If you have both basic and supplemental life insurance with Minnesota Life, the beneficiary you designate for one of the policies will be the same beneficiary for the other policy. Whichever beneficiary you designate last, will apply to both policies. Therefore, it is not possible for you to have a different beneficiary for each of the policies.

The change is not effective until it is recorded by Minnesota Life. Once recorded, it will take effect as of the date the form was signed, or the date the beneficiary designation was made online. Note; however, that if a death occurs before the change request was received, payments already made will not be altered.

Conclusion of Coverage

During Disability Leave

Your monthly deductions for supplemental life insurance will continue while you are on disability and receiving a paycheck with sufficient funds to cover the premium amount.

Minnesota Life will contact you to make direct pay arrangements if your monthly deduction was not taken out while you were in a “no pay” waiting period. If you do not receive a letter from Minnesota Life within four weeks of the effective date of your leave, please contact Minnesota Life.

During Leave Without Pay

Minnesota Life will contact you to make direct payment arrangements when you are in a “no pay” status. If you do not receive a letter from Minnesota Life within four weeks of the effective date of your leave, please contact Minnesota Life. If you fail to make pay your required premium to Minnesota Life, your coverage will lapse and you must wait for the next open enrollment period to re-enroll. If your coverage lapses, you may not qualify for the limits you previously carried.

Separation from State Service

Once you are no longer employed with the State of Ohio, through any means except layoff, the supplemental life insurance coverage provided by the state will terminate at the end of the month in which you are separated. Under the group contract, you have the opportunity to either convert or port your coverage. You may exercise only one of these options which are explained in the Conversion and Portability sections below.

Conversion

If you are separated from state employment, you have the option of converting your supplemental life insurance to an individual policy, without furnishing medical evidence of insurability. You must apply for the individual policy, and submit the first premium payment to the insurance company within 45 days of the end of the month in which your employment with the state ends, or 45 days from the date of the conversion letter you receive from Minnesota Life, whichever is later. 

Portability

In lieu of the conversion feature, you are eligible to take advantage of the portability feature. Portability is an option that enables you to obtain similar Minnesota Life group term life insurance coverage after you terminate employment. You must apply for the portability option within 45 days of the end of your employment with the state, or 45 days from the date of the portability letter you receive from Minnesota Life, whichever is later. Evidence of insurability is not required to become insured for continued coverage. Contact Minnesota Life for the portability rates.

Reduction of Benefits (Portability)

The amount of life insurance under the portability feature reduces on the basis of attained age as follows:

  • At age 65, the benefit reduces to 65 percent;
  • At age 70, the benefit reduces to 50 percent; and
  • At age 75, the benefit reduces to 25 percent.

Third-Party Administrator Information

When contacting Minnesota Life, you may be asked to provide your group number. The group number for State of Ohio exempt employees is: 34301. The toll-free number for Minnesota Life is 866-293-6047. 

General Contact

Ohio Department of Administrative Services
30 E. Broad St., 27th Floor
Columbus, Ohio 43215
614-466-8857 Local
800-409-1205 Toll Free

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