510 Employee Benefit Plans

• 510.1.1 Master Policies Govern. Brief descriptions of the various University benefits plans follow. Every effort has been made to make these descriptions as accurate as possible. However, should any conflict arise between the descriptions presented in this University Policy Library and the text of the master policies, the text of the master policies shall govern in all cases.  This University Policy Library is for informational purposes and is not intended to serve as legal interpretation of benefits. Reasonable effort is made to have this University Policy Library represent the intent of the master policy language. However, master policy language stands alone and is not considered as supplemented or amended in any way by the explanations or examples included in this University Policy Library.
• 510.1.2 ISU Board of Trustees Reserve the Right to Modify. The ISU Board of Trustees reserves the right to amend, modify, or eliminate any programs at any time without notice. University benefits programs are administered in accordance with the laws of the State of Indiana.
• 510.1.3 Plan Administrator.  The Board of Trustees delegates the administration of employee benefit plans to the Vice President for Finance and Administration. The Plan Administrator shall have the authority to control and manage the operation and administration of employee benefit plans.

• 510.2.1 Regular Faculty and Staff. All Regular Faculty and Staff are eligible for Full Benefits.
  • 510.2.1.1 Retirement Criteria. Effective March 1, 2022, Regular Faculty and Staff are eligible for post retirement health and life coverages if they have at least 20 years of service at ISU, have been covered by ISU plans for at least 20 years (including spouse, if covered), and retire after age 60 or under rule of 85. Employees hired or insured on or after January 1, 2005, are not eligible for post-retirement benefits. The University and retiree share in the cost of the coverage, and schedules of coverage are subject to change.
  • 510.2.1.2 Rule of 85. Effective March 1, 2022, a retirement option is available to eligible faculty and staff who are at least 55 but less than 60 years of age in which years of service and age at retirement equal 85 or more with 20 or more years of consecutive service at ISU.
• 510.2.2 Temporary Faculty. Temporary Faculty are eligible for life insurance and health coverage. Part-time Temporary Faculty and other temporary employees, including students, are not eligible for the Faculty and Staff benefits.
• 510.2.3 Health and Welfare Benefits Coverage: Separation of Employment.
  • 510.2.3.1 Staff. Staff who separate employment at the University will have coverage for health benefits, life insurance, disability insurance, voluntary supplemental life insurance and voluntary vision insurance to the last day of the month in which separation occurs.
  • 510.2.3.2 Faculty. Faculty who separate from employment at the end of the academic year may elect to extend coverage for health benefits, life insurance, voluntary supplemental life insurance, and voluntary vision insurance to that last day of August of the year in which separation occurs. Section 510.2.3.1 will apply to Faculty who separate from employment during the academic year.
    • 510.2.3.2.1 Faculty – Disability. Disability insurance coverage for faculty will terminate on the last day of the month in which separation occurs.
• 510.2.4 Disability Coverage. Totally disabled employees who qualify for benefits under the University disability insurance program may continue the University health plan coverage and reduced life insurance coverages in effect at the time the disability commences, regardless of age, as long as the disabled employee has the minimum years of service required by the University Retirement Policy (Section 510.2.1.1). University contributions will continue toward the coverage cost if required individual contributions are paid when due.

• 510.3.1 General. Effective January 1, 1975, the life insurance program became mandatory for all new benefits-eligible employees. On August 1, 1985, employees could elect coverage under a Revised Schedule of benefits or could continue under the schedule of benefits in effect at that time. Benefits-eligible employees hired on and after August 1, 1985, are required to participate in the Revised Schedule of life insurance benefits.
• 510.3.2 Revised Schedule. The Revised Schedule of life insurance benefits offers coverage of two and one-half (2.5) times salary, rounded up to the next whole thousand, based on a schedule of benefits with a $100,000 maximum coverage. Following retirement under the University Retirement Policy (Section 510.2.1.1), coverage is reduced to $5,000.
  • 510.3.2.1 Schedule Pre-August 1, 1985. Employees who elected to remain on the schedule in effect before August 1, 1985 have coverage of two (2) times salary, based on a schedule of benefits with a maximum coverage of $75,000. Following retirement under the University Retirement Policy (Section 510.2.1.1), coverage is reduced by one-half (1/2), not to exceed $20,000.
• 510.3.3 Reduced Coverage During Leaves of Absence. During an approved leave of absence without pay, life insurance will be reduced to no more than $50,000, and the employee has the option to purchase any coverage reduced within 31 days of the date the coverage was reduced. Any reduced coverage purchased by the employee will be billed by the insurance carrier. 
  • 510.3.3.1 Return to Work. Upon return to work on a regular schedule, the life insurance will be increased to the amount of coverage based upon the plan in force at the time the leave was begun.
  • 510.3.3.2 Maximum Time During Leaves of Absence.  Life insurance may be carried for a maximum of 24 months during an approved leave without pay.
• 510.3.4 Imputed Income. There shall be imputed income calculated and taxes withheld on University-paid premiums on life insurance coverage in excess of $50,000.
• 510.3.5 Benefits for Accidental Death & Dismemberment. Group Life Insurance coverage includes accidental death and dismemberment coverage, which doubles the life insurance coverage amount in cases of accidental death.  Benefits may also be provided in cases of accidental dismemberment. Accidental death and dismemberment coverage terminates upon retirement.  The plan does not pay Repatriation Charges. Detailed schedules of life insurance benefits are available in the Office of Employee Benefits.
• 510.3.6 Conversion and Portability upon Separation from Employment. A separated or retired employee may convert reduced or terminated group life insurance coverage.
  • 510.3.6.1 Rates. Rates for converted life insurance coverage are determined by the life insurance carrier and are based upon age and class of risk at the time of conversion.
  • 510.3.6.2 No Proof of Insurability. There is no evidence of insurability required for conversion coverage.
  • 510.3.6.3 Contact Employee Benefits. Additional information is available in the Office of Employee Benefits.
  • 510.3.6.4  Portability. This plan has a portability clause, based upon the insured guidelines, may allow an employee to maintain coverage directly with the carrier after separation or service or retirement.

• 510.4.1 General. The University offers a voluntary supplemental life insurance policy to benefits-eligible employees. Coverage may also be extended to a spouse and dependent children.
• 510.4.2 Enrollment. During the first 31 days of employment, an employee (and eligible dependents) may enroll in the plan and have the guarantee issue amount of coverage. 
• 510.4.3 Rates. Rates are age-based and may change as the employee and dependents grow older.
• 510.4.4 Proof of Insurability May Apply. Applications for coverage in excess of the guarantee issue amounts, as well as late enrollment applications, require evidence of medical insurability.
• 510.4.5 Payment of Premium. The employee pays the full premium for this supplemental life insurance.
• 510.4.6 Portability. This plan has a portability clause which based upon the insured guidelines, may allow an employee to maintain coverage directly with the carrier after separation of service or retirement.
• 510.4.7 Contact Employee Benefits. Detailed information regarding voluntary life insurance benefits including premium rates are available on the Office of Employee Benefits webpage.

• 510.5.1 University-Provided Benefit. The University's group health plan is self-insured and administered by a third-party administrator. Employee contribution rates are set annually depending on medical cost trend factors and claims experience within the University group and budgetary considerations.
• 510.5.2 Dependent Child Coverage. Dependent children are eligible for coverage through the last day of the calendar year in which they reach age 26. Further detailed information is available in the Office of Employee Benefits.
• 510.5.3 Dependents of Deceased Employees. Health plan coverage may be continued for dependents of deceased employees if the deceased employee had worked the number of years of service required by the University Retirement Policy (Section 510.2.1.1) at the time of the employee’s death. If a dependent spouse of a deceased Uni­versity employee or retiree remarries, then such dependent spouse is not eligible for continuation of the health benefits coverage beyond the date of remarriage.
• 510.5.4 Removed.
• 510.5.5 Enrollment Period. The group health benefits plan is an optional program. Eligible employees desiring this coverage must enroll in the program within 31 days of employment. Coverage is effective on the first day of the month following the enrollment date.
• 510.5.6 Additions and Changes in Covered Individuals. New births or adoptions must be reported within 31 days of the event to add such dependents to the employee’s coverage as of the date of such birth or adoption. Status changes of employees and dependents must be reported within 31 days of such change in order for coverage to be effective upon the date of such change.  See Section 510.5.8 Special Enrollment.  Documentation of such changes is required.
• 510.5.7 Open Enrollment. An open enrollment period for the health benefits plan will be offered in the fall of earch year for coverage effective the following January. 
• 510.5.8 Special Enrollment. Special enrollment is available only if applied for within 31 days following a qualifying event, as follows:
  1. Loss of group health coverage with another group health plan (voluntary or involuntary).
  2. Loss of health coverage due to divorce from the spouse who has other group health coverage.
  3. Loss of group health coverage due to death of the spouse/relative who has other group health coverage.
  4. Termination of group health plan coverage by the employer of spouse/relative.
• A dependent may be added through special enrollment if an application is received within 31 days of the following qualifying events:
  1. Marriage to a benefits-eligible employee who is enrolled in the health coverage.
  2. Birth of a child of a benefits-eligible employee who is enrolled in the health coverage.
  3. Legal adoption or placement of a child for adoption with a benefits-eligible employee who is enrolled in the health coverage.
  4. In addition to the above, employees and/ or their dependents may have special enrollment rights if applied for within 60 days following one of the following:
     1. Coverage is lost under Medicaid or a State health insurance program.
     2. When the employee and/or their dependents gain eligibility for state premium assistance.
• 510.5.9 Contact Employee Benefits. For more information regarding health benefits, please contact the Office of Employee Benefits.

• 510.6.1 General. Under Section 125 of the Internal Revenue Code, the University is permitted to establish a program to pay health plan contributions with pre-tax dollars. By using pre-tax dollars to make contributions, a participant may increase take home pay resulting from lower income and Social Security (FICA) taxes. Participation in such a program may reduce tax liability. It may also reduce monthly Social Security benefits at retirement if current annual earnings are below the applicable Social Security wage contribution base.
• 510.6.2 Enrollment Period. An election to participate in the program must be received in the Office of Employee Benefits by the desingated open enrollment period in order to participate during the following calendar year. The election to participate must remain in force throughout the entire calendar year unless there is a change in family status.
• 510.6.2.1 Non-Participation. Also, should one desire not to participate in the Section 125 program, an election not to participate must be received in the Office of Employment Benefits by December 10 for the following calendar year.
  • 510.6.2.2 Certain Mid-Year Changes Acceptable. Federal law allows changes in family dependent status (marriage, divorce, new child) as a reason to make a change in election during the year.
  • 510.6.2.3 Elections Remain in Force until Changed. Once an election is made, it will remain in force for future years until a new election form is received by the Office of Employment Benefits.

• 510.7.1 Medicare Integration for Employed Individuals over 65. Employees and spouses over age 65 are given a choice of retaining the University coverage or dropping the University coverage and having Medicare (Part A and B) as primary payor, according to the Tax Equity and Fiscal Responsibility Act of 1986 (TEFRA) while employed.
  • 510.7.1.1 Impact of Election to Retain University Benefits. Should the employee/spouse working beyond age 65 select to retain the University’s health benefits plan, the plan will pay as a primary payor. If enrolled, Medicare will pay as secondary. A summary of the benefits provided under the provisions of the coverage is available in the Office of Employee Benefits.
  • 510.7.1.2 Impact of Election for Medicare to be Primary Payor. Should the employee/spouse working beyond age 65 elect to have Medicare as the primary payor, the ISU health plan must be dropped for the person making the election. If the employee elects to have Medicare as the primary payor, health benefits on the entire membership must also be terminated.
• 510.7.2 Medicare Integration for Retired Individuals over 65. Following retirement and upon attainment of age 65 or eligibility for Medicare, the retiree and spouse are required to enroll in Medicare (Parts A and B) (hospital and medical insurance) when eligible in order to participate in the University’s retiree health benefits plan.

• 510.8.1 General. Federal law (Public Law 99-272, Title X) requires that most employers sponsoring group health plans offer an opportunity to continue health coverage at group rates in certain instances where coverage under the plan would otherwise end.  This law is titled "Consolidated Omnibus Budget Reconciliation Act" (COBRA). In most cases, the individual is required to pay 102 per cent of the total group rate in order to continue health coverage. The extension of health coverage is for 18 to 36 months depending upon the circumstances of coverage termination. For more information and forms, visit Employee Benefits webpage or contact the Office of Employee Benefits..
• 510.8.2 Impact of Social Security Disability. If an employee (or dependent) receives Social Security Disability while on the University’s health plan, prior to termination of ISU employment, then notice should be provided to the Office of Employee Benefits. It may be possible to extend COBRA coverage from 18 to 29 months. The individual is required to pay 102 percent of the total group rate through the first 18 months and 150 percent from the 19th month through the 29th month.

Voluntary flexible spending accounts for eligible medical and dependent care expenses are available. These accounts allow employees to set aside pre-tax money each tax year to be used to pay for eligible medical and dependent care expenses. The maximum amount that can be deferred is determined by the IRS each year. Deductions for these accounts are for calendar year purposes and may not be changed except within 31 days of a qualifying life event.

The University offers voluntary vision insurance coverage for all benefits-eligible faculty and staff. Employees are eligible to enroll during the first 31 days of employment or during the open enrollment period each year. The plan utilizes a network of providers and requires that employees enroll for a one-year required coverage period. During this required coverage period, covered members can obtain one eye exam per 12 months, one set of lenses per 12 months, and one set of frames per 24 months. The plan also provides a reimbursement schedule for services obtained though a non-network provider.

• 510.11.1 General. Disability benefits are provided under the provisions of the Social Security Act for those persons fully insured after it has been determined that a permanent disability exists. In some cases, there is a five-month waiting period which begins on the first day of the month following the date of onset of the sickness or injury. In order to determine benefits payable, employees should consult the local Social Security Office.
• 510.11.2 INPRS Disability Benefits. The Indiana Public Retirement System (INPRS) provides disability benefits for those employees who are currently in an INPRS eligible position with a minimum of five (5) years of service credit. Estimates of benefits payable are determined by INPRS.
• 510.11.3 Contact Employee Benefits. Questions regarding benefits and procedures under the Indiana Public Employees' Retirement Fund should be directed to the Office of Employee Benefits.

• 510.12.1Qualification for Coverage. The University provides disability insurance coverage for full‑time Regular Faculty and Staff upon completion of three (3) years of continuous service. The full cost of this program is paid by the University.
  • 510.12.1.1 Required Participation in Program. Since July 1, 1982, all eligible employees are required to participate in the disability insurance program as a condition of employment after the third year of service.
  • 510.12.1.2 Three-Year Continuous Service Exception. New employees may be eligible for coverage upon employment provided they were covered by the former employer under a similar group insurance program and benefits were payable for a minimum of five (5) years; such coverage must have been in effect within 90 days of employment at Indiana State University.  It is the responsibility of the new employee to provide documentation of prior employer coverage to the Office of Employee Benefits.
  • 510.12.1.3 One-Year or Temporary Ineligible. One-year or Temporary employees are not eligible for the disability insurance program.
• 510.12.2 Benefits under Plan. The disability benefits program guarantees employees a 66 2/3 percent income protection and annuity contribution continuation after 180 days of continuous total disability. The income protection amount is from all sources. Should an employee become disabled and be granted disability, benefits received from the plan may be taxable.
  • 510.12.2.1 Structure of Benefits. If total disability occurs at, or prior to, age 60, disability benefits will be paid until the employee's social security normal retirement age. If total disability commences after age 60, disability benefits will be payable as defined in the current plan contract.  Contract Employee Benefits for more information

For information regarding retirement plans, see Policy 535 Retirement Benefits and Policy 550 University Retirement.