Page 128 - Group Insurance and Retirement Benefit IC 83 E- Book

Some STD plans provide two different percentages of earnings, depending on the income

level. For example, a higher percentage, perhaps 70%, might apply to weekly earnings up
to $999 and a lower

Figure 6-1

STD Application percentage, 50% perhaps, to weekly earnings of $1,000 and over. Then,

a maximum weekly benefit is likely to apply to all levels, such as $1,000 per week
regardless of actual income. Here's an example:

Weekly STD Weekly
Earning Benefit

$3,000 50% $1,000
$1,200 50% $ 600

$ 500 70% $ 350

In the first example, notice that although a 50% benefit would equal $1,500, the $1,000

weekly maximum applies. Usually, the policy also stipulates a minimum weekly benefit
of perhaps $100.

Still another method for paying STD benefits is to pay 100% of weekly earnings for a

certain period-four to six weeks are common-followed by 70% or some other percentage

for the duration of the STD benefit period. Here's a comparison of the total STD benefits
paid under this arrangement versus two other, lower percentages paid uniformly for the