Core Benefit Options
Core benefits are offered to employees at the beginning of employment. There is no annual “open enrollment” for these benefits and changes. If allowable, they are handled individually as needed. Employees are encouraged to make decisions carefully for these programs when enrolling, especially those related to life insurance, because making changes is more involved and may require showing proof of insurability to make changes at a later date. Available core benefits include term life insurance, long-term disability and the retirement plans.
Term Life Insurance
All employees hired into benefit-eligible positions are provided coverage under the group term life insurance program. Term life insurance provides basic life insurance protection while an employee is actively working for the University.
Employees are automatically provided basic term life coverage at one and one-half times their budgeted annual salary (including summer salary if applicable). The University pays the cost of this coverage. Eligible employees may choose to purchase additional term life insurance to cover themselves, their eligible spouse and/or eligible dependents.
Imputed Income: IRS regulations require that the imputed value of one and one-half times salary of term life insurance in excess of $50,000 that is provided by Purdue be reported on the employee’s W-2 form as taxable income. Imputed value is determined by an IRS table based on age.
Long-term disability (LTD) becomes effective for employees in benefit-eligible positions upon hire; however, there is a pre-existing condition exclusion during the first year of employment. Employees pay half of the cost of this coverage, and Purdue pays the other half. LTD provides a monthly income for those who are totally disabled for an extended period as a result of illness or injury and require the ongoing care of a physician. LTD covers both occupational and non-occupational disabilities and provides 65 percent of the employee’s budgeted annual salary at the time of disability.
When an employee is unable to work, there is a waiting period before the long-term disability benefit is payable. During the waiting period, employees generally use accumulated sick leave and may also use vacation benefits.
For clerical and service staff members, the waiting period is three months of disability. Those who have enrolled in short-term disability may be eligible to receive these benefits prior to the start of long-term disability. Employees generally use accrued sick leave and vacation during this time.
For faculty, administrative/professional staff and operations/technical staff, the waiting period is six months of disability. Sick leave and/or vacation is generally used during the waiting period.