Aetna Group Insurance and Innovative Care Systems Join Forces to Launch New Voluntary Plan Disability Program.

Business Editors

TORRANCE, Calif.--(BUSINESS WIRE)--Nov. 14, 2000

Plans Give Employers Greater Flexibility and Value

Over Mandated State Disability Fund

Responding to employers' concerns over increases in California State Disability Income (SDI) premiums, Innovative Care Systems Inc., and Aetna Group Insurance announce that they have joined forces to offer a professionally administered self-insured alternative to state disability coverage and an opportunity to effectively coordinate this coverage with an insured long-term disability plan to add value for employees.

Known as "voluntary plans" in the industry, self-insured plans are required to provide all of the benefits of SDI, to provide a richer benefit in some way, and to cost the employee no more than the state plan. These plans allow employers to design their own short-term disability coverage and maximize the use of funds set aside for employee disability.

In the process, insurance experts say, employees are likely to receive increased value for their disability contribution fee, as individual employers often experience far less incidence of loss than the state's pool. They can use the funds to enhance disability benefits beyond what the state mandates.

Mandatory SDI contributions, paid to the state, may be in excess of the amount needed to satisfy claim obligations. Under a voluntary plan, this money could be used to pay disability premiums for a voluntary short-term plan, enhance the benefits plan by including long-term disability insurance, and even reduce the employee contribution rate.

Employers can tailor the total program to their specific needs and offer simplified claim reporting for employees by using one claim form for both short-term and long-term plans.

Traditionally, there has been little interest among all but the largest employers to self-fund disability. However, recent legislation, designed to shore up the SDI fund, has resulted in California employees being assessed record increases in their premiums -- adding up to $166 or twice as much per year for the maximum employee contribution.

"Aetna Life Insurance Company is one of the largest disability carriers in the country and we believe our new relationship with ICS will offer employers a strong disability alternative in California," said Steve Miller, Aetna's Group Insurance Regional Marketing Manager.

"Employees are often at a disadvantage participating in the state program if, as a group, they have fewer claims than the state's norm of 66 claims per 1000 employees, because this means money is being left on the table," said Deborah Kweller, President of ICS.

"Rather than paying for other companies' poor claims experience, employers can opt to take the money and create a more valuable benefits package that better rewards hard-working employees," said Kweller.

Disability coverage helps protect an individual against loss of income due to illness or injury. Since a disability of more than 90 days' duration is a far greater threat to the worker than death at any given age, disability coverage is far more valuable to the average employee.

For years self-funded disability plans have been available to employers as an alternative to SDI coverage. Now, the Aetna/ICS arrangement provides for voluntary short-term coverage administered by ICS, coordinated with supplemental short-term coverage and as well as long-term coverage underwritten and administered by Aetna.

Short-term and long-term benefits plans offered by ICS and Aetna are being sold through brokers and through Aetna's own Group Insurance representatives. Employers interested in finding out more about the program, can contact Stephen L. Miller at 415/645-8176.

About Aetna Group Insurance

For 150 years, Aetna has been providing for the insurance and financial needs of individuals and businesses and is among the top five providers of disability benefits based on in-force premium. Today some 3 million people nationwide are covered by Aetna group disability plans. All group products are underwritten or administered by Aetna Life Insurance Company.

About ICS

Innovative Care Systems Inc., is a Torrance, California-based third-party administrator specializing in providing a broad variety of insured and self-insured workers' compensation and disability claims administrative services, including Voluntary Plan administration. Innovative Care Services is located at 2355 Crenshaw Blvd. Suite 300, Torrance, Calif. 90501; 310/781-8293.