Disability Plans

Self-insurance is a very popular funding tool used by many companies to control the cost of employee benefits. It is particularly attractive for short-term disability programs because, in most circumstances, the losses are easily forecast and are paid out over time.

We prepare a comprehensive analysis for companies who are interested in exploring self-insurance. This analysis, or "Feasibility Study," shows the savings that can be realized from self-insurance as compared to traditional insured products. The Study also discusses the other important aspects of self-insuring, including the risk, plan design, plan funding, implementation, employee communication, ERISA compliance, claims administration, consulting and reporting.

Typically, the Study is prepared at no cost to the company. All that is needed is a current employee census.

Some companies have a clear idea of their employee benefits design objectives. Others tend to base decisions on what other companies are doing. Some have no master plan in mind and tend to roll out plans without considering how they impact or are impacted by other plans or what the cost to the company might be.

We work with clients to help them gain an understanding of what their objectives are and what their needs are. Many factors go into this. The product of such analysis is a well designed disability plan that provides appropriate income protection to employees at a reasonable cost.

How should a short-term disability plan be funded? Should it be an employer cost? Should it be paid for by the participants? A shared cost? There is no "right" answer. Furthermore, such a discussion must also include consideration of the tax implications of the funding method, the compliance requirements, whether to use a trust (even a VEBA trust) or to fund only current expenses out of assets ("pay as you go"). There are many considerations. The Larkin Company has the depth of experience to help clients find their way through this maze of technical, tax, administrative and legal issues.

The Larkin Company prepares a draft of the plan's legal text, trust agreement and the summary plan description for self-insured plans along with sample employee communication and plan marketing materials. These are all prepared based on the individual client's needs.

Some plans require an actual employee enrollment. We work with clients to develop a marketing and communication strategy. We will design and/or edit communication, training, enrollment and employee orientation materials. We will also conduct employee meetings and training.

The Larkin Company administers self-insured short-term and long-term disability plans. We also administer or provide advice-to-pay for non-ERISA paid time off plans (sick-leave, salary continuation).

In California, we administer claims for self-insured clients who have opted out of State Disability Insurance (SDI).

We set and meet the highest standards for employee service and client support.

We prepare or assist clients in preparing ERISA required reports as well as the various State reports. We provide guidance in plan design, funding and documentation to ensure the plan meets ERISA and statutory requirements.

The principals of The Larkin Company have been designing and administering self-insured State Disability Insurance Plans (known as "voluntary plans") for more than 20 years. They have implemented over 100 such plans and are recognized as experts in this field.

Plans are designed and administered to meet individual client needs. The Larkin Company provides interested companies with a comprehensive Feasibility Study to determine if self-insurance is a good alternative. In addition, The Larkin Company assists in plan design, employee communication and enrollment, plan documentation, legal compliance and provides on-going claims administration, consulting and support.

Some companies administer their own paid time off program. However, they often do not have the expertise to evaluate the necessity of or the expected duration for a disabling condition. The Larkin Company can help by providing timely, consistent and objective examination of claims and advice to the client as to whether such a claim should be paid and, if so, for what duration. The Larkin Company can also provide recommendations for early return-to-work and strategies for reducing the incidence of claims.

Paid Family Leave (PFL) became part of California's State Disability Insurance (SDI) program in 2004. Benefits are payable to employees who wish to bond with a newborn child (or child placed through adoption or foster care) and to employees who must take time off to care for a seriously ill family member. Benefits are paid for up to six weeks. The Larkin Company administers PFL benefits as part of the administration of self-insured voluntary plans for its clients.