GROUP LIFE INSURANCE, LIVING BENEFIT
AND
SPOUSALLIFE INSURANCE
Employees and Pensioners represented by the Power Worker’s Union (PWU)
Effective:April 1, 2014
TABLE OF CONTENTS
INTRODUCTION
SCHEDULE OF INSURANCE
LIFE INSURANCE BENEFIT OPTIONS
LIFE INSURANCE AT RETIREMENT
LIFE INSURANCE AT TERMINATION
CONVERSION OPTION
LIFE INSURANCE AT LEAVE OF ABSENCE
LIFE INSURANCE AT LONG TERM DISABILITY (LTD)
LIVING BENEFIT
SPOUSAL AND CHILD LIFE INSURANCE
SPOUSAL AND CHILD LIFE CONVERSION OPTION
DEFINITIONS
This brochure provides an overview of the Life Insurance benefits program for employees represented by the Power Worker’s Union. While every effort has been made to ensure that this information is clear and accurate, this brochure does not cover every aspect of this program in detail. If neither this brochure nor the collective agreement covers a specific situation, ESA reserves its right to govern itself in accordance with the relevant plan documents, while the Union reserves its rights under the collective agreement. This brochure replaces the previous ESA brochure entitled Group Life Insurance, Living Benefit and Spousal Life Insurance, dated April 1, 1999 to further clarify certain benefit provisions, as well as reflect the benefit provisions set out in the Memorandum of Agreement between ESA and the Power Worker’s Union dated April 1, 2014.
For more information, please contact Human Resources or visit our intranet website at and select “Human Resources and Payroll”.
Prepared by ESA Human Resources – April 2014
INTRODUCTION
This brochure summarises the important information concerning Group Life Insurance coverage, including the Living Benefit provision, and Spousal Life Insurance and is referenced in the collective agreements with the Power Workers’ Union.
SCHEDULE OF INSURANCE
Individuals eligible for insurance / All Members of Power Workers’ Union at work on a full-time basis and with full salary for a minimum of 24 hours per week.The basic portion of the plan provides term insurance protection while employed or while on Long Term Disability (LTD).
Individuals excluded from insurance / All contractual, seasonal or temporary employees
Eligibility waiting period / The first of the month coinciding with or following 3 months of probationary status or appointment as a regular employee
LIFE INSURANCE BENEFIT OPTIONS
Option1: Basic Life Coverage (2x)
Amount of insurance / 200% of base annual salary, rounded to the next $500Basic Life Coverage is a condition of employment and is therefore mandatory. It is calculated as the value of employee’s annual salary, rounded-up to the next $500. The premiums are paid by ESA and the value of these premiums is a taxable benefit.
Option 2: Basic Life Insurance (1x) plus Additional Term (1x)
Amount of insurance / 100% of base annual salary, rounded to the next $1,000The premiums under Option 1 are paid by The Company. For employees who elect Option 2, the premium cost for this additional coverage is paid by the employee with premiums deducted monthly on the 4th payroll deposit.
An employee who becomes a member of the Plan will be deemed to have elected Option 2. Employees may elect to be covered under Option 1, within 90 days of becoming members in the plan, if they so wish.
A member will be required to submit medical evidence of insurability to re-elect Option 2.
Employees may elect to change their option during the year. Any re-election shall become effective on the first of the month following the re-election or on the date of approval by the insurer of any required medical evidence of insurability which may be necessary in cases of increased coverage, whichever is later.
When an employee changes his/her option, it cannot be changed again until 12 months have passed since the last change.
Changes in the employee's base earnings have the effect of increasing (or decreasing) coverage, the increase (or decrease) will be effective on the first day of the month coincident with or immediately following the increase, or decrease, in base earnings. The amount of coverage will be confirmed annually by means of the "Employee Benefits Information Report" which is sent to all employees.
Employees returning from LTD and/or on rehabilitation programs will not have their coverage decreased.
LIFE INSURANCE AT RETIREMENT
Additional term insurance under Option 2 will terminate completely at age 65, or at normal or early retirement if earlier.
Basic term insurance will be reduced to the following amounts:
Final base annual earnings rounded upward to the next $1,000 and divided by two forthe first ten years of retirement; and final base annual earnings rounded upward to the next $1,000 and divided by four after the first ten years from retirement.
Pensioners are eligible for the conversion option which is explained in the following section.
LIFE INSURANCE AT TERMINATION
Life Insurance coverage ceases 31 days after the end of the month in which employment is terminated. During the 31 days the individual is eligible for the conversion option set out below.
CONVERSION OPTION
Within 31 days after the month in which the employee terminates employment, or reaches age 65, or retires on an early or normal retirement date, he/she is eligible for the conversion option.
Pensioners who have been retired for 10 years are also eligible for this option if they apply within 31 days after the month in which their insurance is reduced.
The completed application form must be received by the insurer within the 31-day eligibility period.
The conversion option gives individuals the right to purchase from the insurer without medical examination, an individual policy in a form customarily issued at that time by the insurer, for an amount up to the amount of the reduction in insurance coverage.
If the covered individual should die during the 31-day period in which he/she is eligible to make application for conversion, the amount of the Group Life Insurance available for this purpose will be payable to the designated beneficiary or estate, regardless of whether or not you the member applied for conversion.
LIFE INSURANCE AT LEAVE OF ABSENCE
For employees granted a Leave of Absence With Pay, their Group Life Insurance will be continued and the premium for additional term insurance, will be deducted from their earnings.
For employees granted a Medical Leave of Absence Without Pay, (such as while awaiting LTD Benefits or on Pregnancy, Adoption, or Parental Leave), coverage will continue at the level immediately prior to leaving, and the employee must make arrangements for payment of premiums for any additional insurance (in Option II) during their absence from work.
Employees on an approved Leave of Absence Without Pay for any reason other than those mentioned above, will continue to be insured under the The Company Plan, but arrangements must be made for payment of premiums for any additional insurance (in Option 2) during their absence from work.
LIFE INSURANCE AT LONG TERM DISABILITY (LTD)
Effective on the first day of the month coincident with or immediately following the day benefits are first payable under the LTD Plan, the employee will be insured for an amount equivalent to the total amount of life insurance prior to the start of the disability income benefits. Employees on LTD will not be required to make premiums while in receipt of LTD Benefits.
BENEFICIARY
A member of the Group Life Insurance Plan may name anyone he/she wishes to be their beneficiary and they may changetheir designated beneficiary at any time subject to legislation governing such changes. If your beneficiary is under the age of majority, a trustee must be appointed. Employees may contact Human Resources for specific details.
In the event of a member's death, the named/designated beneficiary will receive the amount of insurance in force at that time. If the designated beneficiary has predeceased the member, the insurance will be paid to the member's estate. Payment is made in a lump sum and which is not taxable (at the present time).
LIVING BENEFIT
This benefit permits employees who are terminally ill to receive a portion of their group life insurance while they are still alive.
Eligible employees may apply for up to $50,000, or 50% of their total group life insurance (basic + additional) amount, whichever is less. The attending physician must state that death is anticipated to occur within 24 months.
The employee must apply to the insurer stating their intent to apply and the amount he/she wishes to have advanced. A declaration from the employee's attending physician must accompany the application to the insurer stating that the employee is competent and able to understand a transaction of this nature, the specific nature of the patient's illness and the anticipated date of death.
The funds are advanced to the employee in the form of a loan with interest payable at the current rate of interest upon the employee's death. The amount of the advance, along with the accrued interest, is deducted from the amount payable to thebeneficiary following death.
SPOUSAL AND CHILD LIFE INSURANCE
Spousal and Child Life Insurance is available to all active employees who are members of The Company’s Group Life Insurance Plan. Participation is optional.
An eligible spouse is the person to whom you are legally married, or with whom you have been living in a common-law relationship for at least 12 months and whom you publicly represent as your spouse. This includes same sex spouses.
The beneficiary of the spousal and child life insurance policy is the employee who is paying the premium.
Spousal Optional Life Insurance
The cost for spousal life insurance depends on the age and smoking status of your spouse.
Premium rates will change as the spouse's age increases. In addition, premium rates may be adjusted from time to time to reflect experience with the plan and the number of employees whose spouses are enrolled. The higher the participation, the more stable the rates are likely to remain over time. Rates are not expected to change more than once every two years.
To be eligible for non-smoker rates, your spouse must have ceased smoking for at least 12 months immediately prior to the application and must sign the declaration as to his/her status on the enrollment form. Misrepresentation may result in denial of the claim.
No benefit will be paid if the spouse was confined in hospital on the day of becoming eligible for insurance and has been continuously so confined until his/her death.
Dependent Child Optional Life Insurance
To enroll for Spousal/Child Life Insurance, you should request an application form from Human Resources. This form also includes health questions as well as a smoker declaration. The insurer will review the application and notify you whether or not it has been accepted. If you later decide that you require more spousal insurance, complete the same process.
Initial eligibility of a spouse (e.g. up to 31days after becoming a member of The Company’s Group Life Insurance Plan) and birth or adoption of first child are considered change of life events for these purposes. If you apply to enroll or to increase the number of units of spousal coverage within 31 days after the occurrence of any of these events, coverage will be automatic. In other words, your spouse will not need to supply evidence of insurability.
Spousal/child life insurance coverage expires at the end of the month in which employment is terminated, or the employee retires. Within 31 days following termination, or retirement, the individual is eligible for conversion options.
SPOUSAL AND CHILD LIFE CONVERSION OPTION
Within 31 days after the month in which the employee terminates employment, or retires, he/she is eligible for the Conversion Option.
The completed Application Form must be received by the insurer within the 31-day eligibility period.
The conversion option gives individuals the right to purchase from the insurer without medical examination, an individual policy in a form customarily issued at the time by the insurer, for an amount equivalent to the insurance coverage.
If you have any further questions, please contact Human Resources.
DEFINITIONS
Base Annual Earnings
The employee's base annual earnings are base weekly earnings multiplied by 52.1786, or base monthly earnings multiplied by 12. In the case of hourly-rated employees, base weekly earnings are derived from the base hourly rate multiplied by normal scheduled hours of work up to a maximum of 40 hours. Base earnings do not include any premiums or allowances, such as overtime or isolation pay.
Basic Term Insurance
Base term insurance is equal to two times base annual earnings for all members except for executives. It is mandatory for all members of the The Company’s Group Life Insurance Plan. The premiums are paid by The Company.
Additional Term Insurance
Additional term insurance is the optional term insurance equal to one times base annual earnings which a member may elect to purchase in addition to the basic term insurance coverage. The premium for this Additional Term insurance is paid by the employee through payroll deduction.
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