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Benefits Program of the University of Pennsylvania

1997 Review and Recommendations


To the University Community:

This report is published in Almanac so that all Penn faculty and staff will be aware of the continuation of the benefits redesign process and the rationale for the development of additional recommendations. It also provides an opportunity for the community to give us feedback via e-mail at benefits@pobox or by campus mail to the committee chair.

The recommendations outlined in this report have been discussed and endorsed by the Academic Planning and Budget Committee and the Personnel Benefits Committee of the University Council.

We anticipate that the President, Interim Provost and Executive Vice President will make a final decision with respect to these recommendations in March 1998, with implementation effective July 1, 1998.


The Benefits Advisory Committee


Dr. Barbara Lowery, Chair, Associate Provost

Mr. Alfred Beers, Associate Vice President for Finance

Debra Fickler, Esq., Associate General Counsel

Dr. David Hackney, Chair, Personnel Benefits Committee; Professor of Radiology/Medicine

Dr. Robert Hornik, Professor of Communications, Annenberg School

Mr. Gavin Kerr, Vice President Human Resources and Strategic Planning, University of Pennsylvania Health System

Dr. David Kozart, Past-Chair, Medical School Faculty Senate Steering Committee; Associate Professor of Ophthalmology/Medicine

Mr. Michael Masch, Executive Director, Budget and Management Analysis

Dr. Olivia Mitchell, Professor of Insurance and Risk Management/ Wharton

Ms. Betty Thomas, A-3 Assembly; Administrative Coordinator, Office of Student Financial Services

Dr. Michael Wachter, Interim Provost

Ms. Marie Witt, Penn Professional Staff Assembly; Associate Vice President for Business Services




I. Introduction and Executive Summary

II. Detailed Description of Changes

A. Health Care Insurance

Lifetime Maximums

Mental Health Benefits

B. Retirement Benefits

C. Long-Term Disability

D. Long-Term Care

II. Summary




I. Introduction and Executive Summary

In order to conduct a careful, thorough review of Penn's benefits package and to receive advice from the University community, a Benefits Advisory Committee was appointed in 1996. In its first set of recommendations, which were implemented on July 1, 1997, the Benefits Advisory Committee focused on the following goals: maintaining an attractive benefits package that meets the professional and personal needs of University employees; realizing a competitive benefits package; adopting plans that conform to the best practices of benefits design; maintaining affordable benefits for lower-wage employees; retaining those benefits that are most valued by employees; and simplifying and clarifying the benefits package. It attempted to achieve these goals while at the same time contain costs of the program. Those costs were averaging an annual 8.1% rate of growth and diverting resources that might otherwise be used to maintain competitive salaries, invest in Penn's strategic priorities, enable researchers to effectively compete for sponsored research grants, and assure a competitive tuition policy.

The Committee recommended greater employee cost sharing over a wider range of health insurance plans and introduction of prescription drug coverage in the HMO plans; changes to life-insurance to provide one-times annual benefits base pay and return of flex dollars to employees; a single paid-time-off accrual schedule and elimination of reduced summer hours; retention of undergraduate tuition benefits and graduate tuition benefits for employees and development of special qualifying programs for employees whose admission to Penn is deferred for academic reasons; and expansion of the options for part-time employees to participate in the Health Care Pre-Tax Account. These changes permit the University of Pennsylvania to continue to offer an attractive and competitive employee benefits package that helps the University to attract and retain excellent faculty and staff.

The Committee also recommended that consideration of changes to health insurance lifetime maximums, retirement, long-term disability, and mental health plans and additional options for long-term care, and vision care be considered this year. Although the committee reviewed a voluntary vision care benefit, there is not yet closure on such a plan. Thus, its implementation will not occur in the next fiscal year. This report focuses on recommendations regarding the other benefits listed.

Summary of Proposed Changes

Health Care Insurance

  • PENNCare lifetime maximum benefit -The Committee recommends replacing the $2,000,000 combined in-network and out-of-network lifetime maximum benefit with an unlimited lifetime maximum for in-network care and a $1,000,000 lifetime maximum benefit for out-of-network care.
  • Mental health benefits in Plan 100, PENNCare and the UPHS/Keystone POS-The Committee recommends that annual and lifetime mental health benefit limits be expressed in days rather than dollars and that separate lifetime limits on outpatient mental health benefits be eliminated.

Retirement Plan

Penn's Tax-Deferred Annuity Plan has passed IRS nondiscrimination testing this year using a methodology appropriate to 403(b) plan testing that excludes pre-tax employee contributions from the testing. However, the Plan must be amended effective July 1, 1998 to restrict eligibility to employees who are at least age 21 and have completed at least one year of service. The Committee also reviewed certain cash-out features of the retirement plans.

The Committee recommends that:

  • The TDA plan be made available to employees who are at least age 21 and have completed at least one year of service. Current participants with less than one year of service should be grandfathered.
  • TDA plan participants who terminate prior to age 55 be permitted to withdraw the full balance in their Tax-Deferred Annuity accounts (including University matching contributions).
  • The mandatory cash-out amount from the Retirement Allowance Plan be increased from $3,500 to $5,000.

Long-Term Disability

The Committee recommends:

  • Increasing the maximum monthly benefit to $7,500.
  • Eliminating the three-year waiting period for A3 and certain A1 employees so that all benefits eligible faculty and staff will participate on their first day of employment. (As is currently the case, benefits will begin after six months of continuous disability).
  • Setting the amount the University pays for medical coverage at the HMO premium for individual or family coverage depending upon the employee's coverage at the time of disability. (Disabled employees who want to remain in a plan other than an HMO may do so by contributing the premium differential. Employees who are currently disabled will be grandfathered under the old policy.)

Long-Term Care Insurance

The Committee recommends that the University offer to employees, retirees, spouses/domestic partners, parents, parents-in-law, grandparents and grandparents-in-law the option to purchase individual long-term care coverage.


II. Detailed Description of Changes

A. Health Care Insurance


The range of Penn's health care options and the flexibility those options provide is an important and highly valued component of Penn's benefits package. For the 1998 fiscal year, the Benefits Advisory Committee expanded the range of plan choices, implemented a prescription drug plan in the HMOs, expanded UPHS discounts and revised an errant employee contribution system.

In keeping with the principles of the Committee, Penn will continue to simplify and clarify health and welfare plans to help employees better understand their benefits and use them wisely. Penn will also continue the ongoing review and benchmarking of its medical plan options to improve cost management, maintain affordable benefits, and ensure that the plans remain competitive.

The medical plan options and benefit levels will remain largely unchanged in FY 99, with two exceptions. PENNCare's lifetime maximum benefits will be revised and mental health benefits under PENNCare, Plan 100 and UPHS/Keystone POS will be modified to comply with the Mental Health Parity Act of 1996. There will be no change in the design of the dental plan.

Lifetime Maximums

Background and Issues

Medical plans typically have lifetime maximums to control costs and limit an organization's catastrophic risks. For most participants and plan sponsors, lifetime maximums have little impact because participants infrequently reach the maximum and those approaching the maximum in one plan may switch to another.

HMO and POS plans generally do not impose lifetime maximums when the care is managed by a network or provider. In industry, a plurality of plans (41%) impose a $1,000,000 lifetime maximum; 40% of plans have no maximum; the remaining 19% report under $1,000 or other arrangements. Seventy-one percent of indemnity and PPO plans have a lifetime maximum of $1,000,000 or more while 51% of POS plans impose a limit of $1,000,000 or more.

Among peer institutions, most indemnity plans have a $1,000,000 to $2,000,000 lifetime maximum. HMO and POS plans surveyed had unlimited in-network benefits; POS plans generally had a $1,000,000 out-of-network limit.

Care is unlimited in all of Penn's in-network plans except PENNCare. That plan has a $2,000,000 lifetime maximum for in-network and out-of-network care combined. The POS plan has a $1,000,000 maximum on out-of-network care only. Plan 100 has a $1,000,000 limit on Major Medical claims with unlimited Blue Cross and Blue Shield claims.

The Committee considered the results of the benchmarking, the need for plan members to have access to care, and the use of lifetime maximums to encourage in-network care.


The Committee recommends:

  • No change in Plan 100's Major Medical $1,000,000 lifetime maximum. If a Plan 100 participant were to exhaust the $1,000,000 Major Medical allowance, the participant could switch to another plan during open enrollment and be eligible for benefits.
  • Replacing PENNCare's combined in- and out-of-network lifetime maximum benefit of $2,000,000 with unlimited in-network care and a $1,000,000 out-of-network lifetime maximum benefit.

Mental Health Benefits

Background and Issues

The Mental Health Parity Act of 1996, requires employers to eliminate annual or lifetime dollar limits for psychiatric benefits that are more restrictive than limits for other medical services. The Act does not require that plans cover mental health services, nor does it prohibit the use of limits on the number of covered days or visits. The law also does not address treatment of substance abuse. If compliance causes an employer's total health plan cost to increase by more than one percent, the plan is exempt. Penn's health plans must comply with the new law by July 1, 1998.

A survey of mental health benefits indicated that Penn's mental health benefits are, for the most part, competitive with peer institutions. It also revealed that there is no trend among local employers or peer institutions to increase mental health benefits to comply with the Act. Most employers are replacing dollar limits with restrictions on the number of days of care or the number of covered visits.

Limits and maximums in health-related benefits are often established in the areas of plan design where conditions are chronic or care is maintenance oriented. Examples of non-mental health care limits include chiropractic treatment, immunizations, therapy services, hospice care and private duty nursing. Such limits are designed to encourage efficient utilization of services and to help control cost. Almost all employer plans apply limits to mental health and substance abuse treatment that are more restrictive than for medical care. Penn's HMO plans impose day and visit limits but contain no dollar limits and thus are in compliance with the Mental Health Parity Act. Plan 100, PENNCare and UPHS/Keystone Point of Service (POS) currently contain annual and lifetime dollar limits for outpatient visits and inpatient treatment. The dollar limits must be removed to comply with the Act. (See Figures 1 and 2 ).

Analysis of use indicated that only a small proportion of plan participants (7%) use mental health services, while the costs associated with this type of treatment are very high. The total cost of mental health treatment in Plan 100, PENNCare and the Comprehensive Plan for FY 97 was about $1,000,000, or 5% of total claims cost. Further analysis of mental health utilization indicated that the majority of mental health claims (74%) were for treatment performed on an outpatient basis. Less than .04% of all inpatient claims in the medical plans were for mental health treatment.

The Committee examined the cost of amending current mental health benefits to create full parity. An estimate of the projected cost of full parity, which would have to be shared by everyone in the plan and not just those using mental health benefits, indicated that current mental health expenditures would double; however the full cost of parity could not be accurately quantified because there are no plans on record with full parity. Several studies attribute the substantial cost increase of full parity to the increased benefit value and the increase in utilization.


The Committee recommends:

    • No changes in annual limits for inpatient and outpatient care or lifetime limits for inpatient care, other than to comply with the Mental Health Parity Act-i.e., a cost-neutral conversion of dollar limits to day/visit limits as illustrated in Figures 1 and 2 .
    • Elimination of the lifetime outpatient visit limits since annual limits will prevent a significant cost increase to Plan 100, PENNCare and UPHS/Keystone POS.

Figure 1: Current mental health benefits (non-complying are in boldface)


 Plan 100


 UPHS/Keystone POS

 Inpatient    In-network Out-of-network  In-network Out-of-network
 Deductible  None  None $200  None $200
 Reimbursement 100% 100% 80%


$120 copay

 Annual Limit 30 days (reset each year)

 30 days

35 days  35 days
 Lifetime Maximum $25,000 Major Medical combined in- & out-patient paid at 50% outpatient


 None $100,000 combined in- & out-patient
 Deductible $200 None $200 None $200
 Reimbursement 50% 80% 50% $25.00 50%
 Annual Limit $2,000


20 visits  $1,500
 Lifetime Maximum $25,000 Major Medical combined in- & out-patient paid at 50% outpatient


 None $100,000 combined in- & out-patient

Figure 2: Proposed changes to comply with the Mental Health Parity Act

(proposed changes are in boldface)


 Plan 100


 UPHS/Keystone POS

 Inpatient    In-network Out-of-network  In-network Out-of-network
 Deductible  None  None $200  None $200
 Reimbursement 100% 100% 80%


$120 copay

 Annual Limit 30 days (reset each year)

 30 days

35 days  35 days
 Lifetime Maximum 40 days Major Medical paid at 80% outpatient

150 days

 None 150 days
 Deductible $200 None $200 None $200
 Reimbursement 50% 80% 50% $25.00 50%
 Annual Limit 30 visits

30 visits

20 visits  30 visits
 Lifetime Maximum Same as medical

Same as medical

 None Same as medical

Note: Above charts reflect individual benefits that are based on UCR rates and may be subject to pre-certification.


B. Retirement Plan Benefits

Background and Issues

Internal Revenue Service (IRS) Nondiscrimination Requirements

The IRS requires that retirement plans do not discriminate in favor of highly compensated employees (i.e., those earning at least $80,000 a year in 1997). For discrimination testing purposes, the entire University controlled group, including the UPHS (the Hospital, Presbyterian Hospital, Clinical Care Associates and any other hospitals the Health System acquires) must be included in the test. After study of testing alternatives with advice from TIAA-CREF and legal counsel a testing methodology, widely used by other educational institutions with 403(b) plans, was employed. This methodology excludes pre-tax employee contributions from the test. Using this method, Penn's Tax-Deferred Annuity Plan passed the nondiscrimination test. In addition, absent unusual circumstances, the University can rely on this test for at least the next two years. However, the testing method assumed that the plan would be amended to require faculty and staff to be at least 21 years of age and to have completed at least one year of service to be eligible to participate in the plan.

Another issue with Penn's Tax-Deferred Annuity Plan is that participants in the plan who leave Penn before age 55 are currently permitted to withdraw only their own contributions to the Plan. The University's matching contributions may only be withdrawn after age 55. The current trend among universities is to allow the withdrawal of both employee and employer contributions following termination of employment.

The third issue on retirement applies to the staff Retirement Allowance Plan and a provision of the Taxpayer Relief Act of 1997. This provision permits plans to increase the threshold for mandatory cash-outs from $3,500 to $5,000. Change to conform with this act benefits mobile employees and reduces administrative costs and premiums paid to the Pension Benefit Guaranty Corporation.


The Committee recommends the following:

  • Effective July 1, 1998, faculty and staff must be at least age 21 and have completed at least one year of service to be eligible to participate in the Tax-Deferred Annuity Plan. (The staff Retirement Allowance Plan currently has a one-year eligibility requirement in place.)
  • Effective July 1, 1998, employees in the Tax-Deferred Annuity Plan who leave Penn should have full withdrawal rights over their TDA benefits.
  • Effective July 1, 1998. the mandatory cash-out from the Retirement Allowance Plan will increase from $3,500 to $5,000. Any participant who leaves Penn, receives a lump sum cash-out and is subsequently re-employed, will become a participant upon re-employment. However, no credit for service before termination of employment will be reinstated. Benefits payable on later termination will be based on service after the rehire date.
  • The Committee also recommends that discussions on the retirement plans continue from perspectives other than compliance. This will include examining long-term objectives for the plans, concerns of faculty and staff, and benchmarking studies.

C. Long-Term Disability

Background and Issues

Penn provides a Long-Term Disability (LTD) Plan for eligible faculty and staff who become totally disabled. "Total disability" means the inability to perform the duties of any occupation, as confirmed by Penn's Disability Board. The LTD plan in combination with other sources of income provides 60% of base salary up to a maximum benefit of $5,000 a month. Other sources of income that may comprise the 60% of base salary include social security; workers compensation; other government disability, retirement or unemployment plans; any settlement or damage award received from the University related to the disability; 50% of income from part-time or rehabilitative employment and income from any other employer. Non-exempt (A3) and certain exempt (A1) staff must complete a three-year service requirement to be eligible for the LTD plan.

LTD benefits begin after Penn's Disability Board determines that the criteria for disability have been met; all sick pay, paid time off and extended sick leave/short-term disability allowances have been used; and the disability has been continuous and total for six months. Penn pays the full cost of the LTD plan, making benefits subject to income taxes. Penn also pays the full cost of medical and dental premiums for employees on long-term disability and continues to make contributions to the Tax Deferred Annuity Plan (TDA), whether or not the disabled employee contributes. The overall annual cost of the LTD plan is approximately $1.2 million.

Because a comprehensive review was not possible given the time constraints in FY 1996, the Committee recommended that the Long-Term Disability Plan and the various components that impact it (sick time, short-term disability, integration with other Penn and external benefits) be studied in FY 1998. A thorough review of Penn's Long-Term Disability Plan was conducted and the Plan was evaluated against the plans of the Ivy League universities and seven local employers. When compared to these organizations in the areas of eligibility, income replacement levels, benefit amount, employer subsidy and benefit flexibility, Penn's plan ranked above the mean. However, there are specific provisions that are generally inconsistent with prevalent employer practices, including the three-year waiting period for non-exempt (A3) and certain exempt (A1) employees; the $5,000 maximum monthly benefit; and Penn's full subsidy for health care coverage and continuing contributions to the Tax-Deferred Annuity Plan without requiring employee contributions. Most employers and peer institutions treat disabled employees the same as active employees­i.e., disabled employees continue to share in the cost of medical, dental coverage and retirement plans at the same rate as active employees.


The recommended changes described below are designed to ensure that the plan helps to ease the hardship created by a long-term disability bring it in line with competitive practice.

  • Retain the current income replacement level of 60% of base salary.
  • Eliminate the three-year eligibility waiting period for non-exempt (A3) and certain exempt (A1) employees by extending coverage to all full-time employees on date of hire. The six-month waiting period before LTD benefits begin will continue to apply.
  • Increase the monthly maximum benefit from $5,000 to $7,500. The current maximum benefit is significantly below the average benefit level of peer institutions.
  • For employees receiving LTD benefits, continue to pay the full cost of the dental benefit and set the amount the University pays for medical coverage at the HMO premium. (Premiums will be paid at the individual or family level depending on enrollment at the time of disability.) Disabled employees who elect coverage other than an HMO will pay the premium differential. Employees who are currently disabled are grandfathered under the old policy.
  • Continue University contributions for employees in the Tax-Deferred Annuity plan whether or not the disabled employee continues to contribute.

D. Long-Term Care Insurance

Background and Issues

Changes in society and family life, longer life expectancies, and the rising cost of health care make long-term care (LTC) insurance a growing part of financial planning. Three out of five people age 65 and over may need some form of long-term care in their lifetime. However, the need for long-term care is not limited to the elderly. While 57% of long-term care recipients are elderly (7 million), 40% are working age adults (5 million). The cost of long-term care has risen dramatically ­ a year of nursing home care is projected to climb to $48,200 in 2001. In the Philadelphia area, daily nursing home rates range from $110 to $200 or more, and the average length of stay is more than four years.

Group medical plans and Medicare pay for some long-term care expenses on a very limited basis and may not pay for any day-to-day custodial care. Home health care offers an alternative to institutional care and, if certain criteria are met, may be reimbursed by Medicare on a limited basis. Medicare does not reimburse adult day care, care in an assisted living facility, or care in an Alzheimer's care facility. Medicaid provides benefits at Medicaid-approved facilities but only for individuals who are impoverished or who have depleted their savings and income. Children of long-term care recipients are affected, as well. In the last six months of a parent's life, 31% of families report spending their life savings to provide for their parent's care.

Long-term care insurance provides an opportunity to protect a family's assets and increase the options available for care. A Health Insurance Association survey reports that individuals purchased long-term care insurance to avoid dependence (25%); to avoid losing savings and assets (23%); to protect their standard of living (15%); to guarantee affordable services (12%); and for other reasons (25%).

Seven of the 13 peer universities surveyed have long-term care plans, all of which are fully paid by employees, and several others are considering implementing programs in the next year. The survey also revealed that the percentage of participants enrolled in long-term care is small, averaging only 5%.

Long-Term Care Insurance Provisions

Long-term care insurance plans generally include the following:

  • Non-forfeiture of benefits­the plan continues to provide some benefits even if the insured stops paying the premiums. This feature provides the flexibility to tailor continued participation in accordance with specific economic and health needs. However, it costs more than a plan with a forfeiture provision.
  • Coverage for nursing home care, adult day care, care in an assisted living facility, community based care and custodial care. Community based care is provided by homemaker agencies and consists of non-medical services, such as light housekeeping, shopping, meals and companionship. Custodial care can be received in the home or an institution and is performed by skilled or unskilled medical personnel, such as therapists or aides. Personal care, such as bathing and dressing or assistance with medical equipment are considered custodial care. Long-term care insurance provides benefits toward the daily cost of care in a facility or about four hours of daily care at home, but it does not provide for the cost of 24-hour home care.
  • Additional benefits­may include an "alternate plan of care" that provides coverage for home alterations (e.g., a ramp or stair lift); a "bed-reservation benefit" to reserve space in a nursing home if a participant is hospitalized for a brief period; "waiver of premium" that frees the participant from having to pay the premium when receiving plan benefits; and "respite care" which provides for a substitute care giver for a family member needing a rest from providing care.
  • Long-term care premiums are based on the amount of coverage elected and age at entry and generally remain stable. Coverage may include inflation protection. Other factors which may affect premium rates, include the daily maximum benefit, the waiting period for benefits, and the lifetime maximum benefit.

The daily nursing home benefit options generally range from $50 to $150 a day. Lesser types of care, such as adult day care, are usually covered at 50% of the nursing home benefit. The waiting period for benefits is typically 90 days. The lifetime maximum benefit is generally a dollar amount equivalent to five years of the full daily nursing home benefit.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) clarified the tax treatment of long-term care coverage. The long-term care premiums are by employees with after-tax dollars. However, the law provides that benefits of up to $175 a day are nontaxable. Long-term care premiums are treated, for tax purposes, the same as medical expenses. A participant can deduct them if all deductions in that category exceed 7.5% of adjusted gross income.

Many vendors, including TIAA-CREF, sell individual long-term care policies, which can be tailored to meet individual needs. A group plan offers many advantages, including:

  • case management
  • premium payment by payroll deduction
  • availability to individuals of all ages
  • higher benefit levels at a lower price
  • guaranteed insurability for active employees during open
  • enrollment (no medical evidence required).

The Committee acknowledged that there are saving devices that are superior to buying long-term care insurance, but it concluded that the implementation would make Penn more competitive in the market place. For a small subset of employees wanting such insurance, it would support work/life initiatives and help address the needs of an aging population.

To determine the features of the plan, the Committee analyzed the long-term care plans of peer institutions and local employers. The Committee also used benchmarking and best practice advice from knowledgeable consultants. Quotes were requested from several long-term care industry leaders. The Committee recommends CNA Insurance. CNA offers guaranteed insurability for employees who are actively at work and who enroll during open enrollment and competitively priced coverage.


The Committee recommends introducing a voluntary, employee-paid long-term care plan with an optional non-forfeiture feature. An overview of the proposed plan's features is in Appendix A. A chart of proposed monthly premiums is in Appendix B. (See also addendum to appendix B)

III. Summary

It is the consensus of the Committee that the proposed changes to current benefits and the addition of a new optional benefits will provide Penn employees with a strong, competitive benefits package while at the same time help to contain the cost of benefits to the University. We believe that the Committee's recommendations satisfy the articulated principles of the benefits redesign process and that they will ultimately advance the University's mission as well as the quality of life and well-being of its employees.



A. Long-Term Care Plan Design

Eligibility -- Regular full-time, part-time and limited service faculty and staff, their spouses, domestic partners, parents, parents-in-law, grandparents, grandparents-in-law, retirees and spouses of retirees. Coverage is guaranteed for actively at work employees during open enrollment; all others must provide proof of good health.

Benefit Commencement -- Eligibility for benefits commences when a member can no longer perform two out of six of the following activities of daily living: bathing, dressing, toileting, transferring, continence, and eating; or when severely cognitively impaired.

Benefit Options -- Daily maximum benefit options of $125, $150 and $175.

Benefit Waiting Period -- 90 days

Inflation Protection -- Guaranteed option to elect inflation protection every three years on average, compounded for the last three years.

Non-forfeiture Protection -- One-time option to elect non-forfeiture protection effective in the fourth year of participation. A percentage of the lifetime maximum is accrued each year the non-forfeiture protection is in effect.

Waiver of Premium -- Once the waiting period is met, premium payments will be waived while the insured is receiving benefits.

Lifetime Maximum -- Lifetime maximum benefit is equal to a factor of 1825 (365 days times 5 years) times the daily maximum benefit selected, or at least five years of benefits. The lifetime benefit will exceed 5 years if lesser amounts of benefits are paid daily.

Institutional Care -- Skilled nursing home, intermediate care, assisted living facility or hospice care will be paid at 100% up to the daily maximum.

Community-based Care -- Home health care, adult day care, adult foster care, or home hospice care will be paid at 50% of the daily maximum benefit.

Companion Care -- Will be paid at 25% of the daily maximum benefit for up to 30 days per year.

Alternate Plan of Care -- Special needs considered; plan can pay for caregiver services, modifications to the home at 100% up to the daily maximum benefit.

Bed Reservation Benefit -- Up to 21 days.

Termination of Employment -- Coverage will be completely portable.

Benefit Payments -- The Plan will reimburse you or the providers directly.

B. Long-Term Care Monthly Premium Rates

Rate A (Without a Non-Forfeiture provision)

 Age $125 Daily NHC Benefit $150 Daily NHC Benefit $175 Daily NHC Benefit
 <25 $6.78 $8.14 $9.49
25-29 $7.95 $9.53 $11.13
30-34 $9.61 $11.54 $13.46
35-39 $13.03 $15.64 $18.25
40 $15.89 $19.06 $22.24
45 $21.78 $26.13 $30.48
50 $28.95 $34.74 $40.53
55 $43.43 $52.12 $60.81
60 $66.71 $80.06 $93.40
65 $95.72 $114.87 $134.01
70 $143.95 $172.75 $201.53
75 $243.20 $291.85 $340.49
80 $412.42 $494.90 $577.37
85 $652.62 $783.14 $913.65

Rate B (With Non-Forfeiture provision)

 <25 $11.07 $13.29 $15.50
25-29 $12.71 $15.24 $17.78
30-34 $15.04 $18.05 $21.07
35-39 $19.91 $23.90 $27.88
 40 $23.89 $28.66 $33.44
 45 $31.73 $38.08 $44.42
 50 $40.34 $48.40 $56.46
 55 $57.17 $68.60 $80.03
 60 $84.77 $101.74 $118.69
 65 $119.74 $143.69 $167.64
 70 $177.92 $213.51 $249.10
 75 $295.00 $354.01 $413.02
 80 $490.86 $589.02 $687.18
 85 $761.74 $914.08 $1,066.41

 NHC = Nursing Home Care benefit

The above rates should be used along with the information on plan inclusions and exclusions before enrollment in the plan.


Addendum to Rate B: % of lifetime maximum paid to qualifying members is reflected in the chart below.
 Duration (years) % lifetime maximum
 3 - Jan 0.00%
4 2.00%
5 2.50%
6 3.00%
7 3.50%
8 4.00%
9 4.50%
10 5.00%
11 5.50%
12 6.00%
13 6.50%
14 7.00%
15 7.50%
16 8.00%
17 8.50%
18 9.00%
19 9.50%
20 10.00%
21 11.00%
22 12.00%
23 13.00%
24 14.00%
25 15.00%
26 16.00%
27 17.00%
28 18.00%
29 19.00%
30+ 20.00%

Return to:Almanac, University of Pennsylvania, February 10, 1998, Volume 44, Number 21