Long- and Short-term Disability Plan Summary of Material Modifications Available March 21
If your cooperative offers the NRECA Long-term or Short-term Disability plan, this week you will receive a Message Center notification directing you to a new summary of material modifications (SMM) for each of these plans.
Deliver the SMMs to current participants in each plan by April 1, 2018. Then complete the online distribution acknowledgement by April 20, 2018. Also, don’t forget to give each respective SMM to new plan participants at the same time you provide the Long-term or Short-term Disability Summary Plan Description (SPD).
These SMMs reflect two changes.
- New Default Federal Income Tax Withholding Rate for Disability Benefits. Effective February 6, 2018, the default federal income tax withholding rate for taxable employer-provided long-term and short-term disability benefits was lowered from 25% to 22%. Default state income tax withholding rates didn’t change. Disability claimants who don’t submit a W-4 Form are taxed at the default federal income tax rate.
- New procedures for disability plan claims. The Department of Labor released changes to disability plan claims and appeals procedures that will apply to claims filed on or after April 1, 2018. These guidelines include certain enhanced requirements for disclosure of the criteria used to deny a claim, treatment of retroactive coverage rescissions as benefit denials, and timely notice requirements for appeals and legal action.
For questions about the SMM, including distribution rules, see the Distributing Plan Documents page on the Employee Benefits website or contact the benefits compliance team at group.compliance@nreca.coop or 866.673.2299, option 7.
Anyone who wishes to change federal income tax withholding elections for disability payments can fax an updated W-4 Form to Cooperative Benefit Administrators at 402.483.9201, attention: Disability Unit; send the W-4 Form to Disability Claims via the Message Center; or by mailing it to CBA Disability Unit, PO Box 6249, Lincoln, NE 68506.
If you or one of your co-op’s employees has a question about their disability benefit or about the claim process, contact the Member Contact Center at 866.673.2299, and ask for the disability unit.