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August 1998
Many LLNL employees are unaware that taking Leave Without Pay for any length of time, even just one day, deactivates their disability insurance, exposing them to serious financial hardship should they become disabled while on unpaid leave. Moreover, should an employee become disabled AFTER taking Leave Without Pay, the unpaid leave could affect their disability payments.
Employees considering Leave Without Pay are strongly encouraged to confirm this fact by visiting the UC's benefits website at www.ucop.edu/bencom/hw/ygip/disaend.html. There, they will find the following advisory: "Coverage can end if certain employment actions occur. For example, if you..., go on leave without pay,...coverage stops on the last full day you are actively at work." Disability payments are based, not on regular pay, but on actual pay during the month prior to disability. Thus, taking, say, 2 weeks of leave without pay means, should you become disabled the following month, your payments would be based on only about half of a normal month's income! What's particularly interesting about this fact is that monthly-paid employees' disability premiums are fixed and based on monthly salary. In months with unpaid leave, the disability premium remains the sameeven though the level of coverage is non-existent for the unpaid leave portions of the month! (According to Benefits, this apparent inequity has been challenged in the courts...unsuccessfully!)
Compounding this problem, Benefits has sometimes incorrectly advised employees about this aspect of Leave Without Pay. Since most other benefits continue in full during short unpaid leaves, it's an understandable mistake, but a serious one nevertheless. Furthermore, even forewarned may not mean forearmed; apparently, it's very difficult if not impossible to obtain a short-term disability policy through a private insurer. (Employees taking Leave Without Pay in connection with short-term service for another employer may want to check if that employer will cover a disability claim occurring while in their employment.)
Because policies change, and in case
the above information is in error, SPSE strongly encourages employees
considering Leave Without Pay to contact Benefits and determine
the effect unpaid leave would have on their disability coverage.
Since it first sent out e-mail to its members to advise of this
problem, SPSE has received numerous comments from employees who
had taken unpaid leave without being aware of the disability risk
they had assumed. They were not happy.
SPSE understands an article is planned for Newsline on this topic,
though it seems to be taking a long time to happen. Perhaps that's
a sign management is considering changing our group coverage to
correct this deficiency. If so, it would make Leave Without Pay
an option employees could exercise without risking financial ruin.
/David Lappa
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