Maybe you'll convince me otherwise, but here are some thoughts...

For one, it's free to me (or pre-negotiated, however you want to think of it).

For two, as I understand them, it generally comes with better terms. [At DL, disability pays 50% of the highest 12 consecutive months in the last 36, with no offsets unless you exceed the 'original' 100% threshold (which is super unlikely/rare), and includes Profit Sharing and potential "retro" pay in the calculation. And, it continues to whatever the FAA mandated retirement is - so age 67 is already baked in (if it happens).] I had a buddy who had a huge year with the last contract's Retro pay and the following year's Profit Sharing being in the same 12 months. He actually got a pay raise on disability from what he had been making, lol. Not that it's typical, but still...

For (maybe) three, and I say this not actually knowing what other companies do... Being contractual and 'in house' at DL, we don't have an outside company* materially getting in the middle of it do deny or reduce benefits. Like how UHC makes health care a nightmare as a third party. *Harvey Watt does administer DL's disability program, but having used it twice, my experience was very simple and easy with them. They basically just validate your sickness, and send a 'thumbs up' back to the company - that's it.

For four, and I can't believe I'm saying this, but I trust DL to pay up more than I trust XYZ mutual to pay up. Or said another way, I trust XYZ less...

ALPA also has some optional disability insurances, which I do pay separately for, and came in very handy when I had a major event. But that's beyond the scope, I think?

Why do you think outside policy is better? Genuinely curious.

 

AA is similar, except best of last 5 years, and no offsets, ever. We also have a tax free option, which I opt for. I had (and plan to have) a big year every 5 years. I’d make more take-home money (probably by a large margin) if I went out “until reaching mandatory retirement age.” I dream of earning almost 0 taxable dollars but getting $30k/mo (+36%). I love giving zero f’s when I walk into an AME office.

 

AAs plan is the same as DLs in that your DC essentially doubles when out on disability, correct?

at DL we get 18% of our FAE, or 36% of our disability payment, whichever way you want to look at it.

the tax free option would be really nice here, and in theory would be a no cost item for the company. How much is the imputed income you pay for disability to be tax free?

 

Yes, correct. I mistyped. Thank you.

And, related but different, another 10k/mo tax free form APA if you pay for POD. But that only lasts for 5 years.

 

The 5 year lookback window (vice 3) is a nice feature.

How does the tax free option work/differ? Always looking for incremental improvements. Are you saying that you made $60k a month for a year? What’s the detail on “best” of last 5 years?

Agree the DC contribution basically staying at a level ‘as if you were still active’ is a massive win for both of us.

 

Tax free option is a federally mandated imputed income. It’s based on our November hourly pay rate (from the previous year, so especially beneficial to upgrading FOs), regardless of number of hours paid. So for the high earners and recent upgrades it’s a very good deal. I pay my marginal tax rate on ~$600/check for the tax free option. It’s the same every check, no matter the gross.

Detail on best of 5 previous calendar years (or previous 12 months, whichever is higher) is basically everything that earns pay. Excludes per diem (obviously). All the same things you mentioned including our second to none profit sharing, haha. Only (potential) downside is the 401k is paid as cash if you opt for the tax free option, because you have no taxable earnings to contribute to a 401k. But low tax rate brokerage cash is not the worst thing in our line of work, especially if you want to retire before 59.5.

Got ahead of myself with poor formatting. The $30k/mo would be including the 401k. I’ll edit for accuracy (nevermind, won’t let me edit).

 

In the simplest terms. The cost of the plan is a taxable benefit. If you pay that tax now your benefit is not taxable. Look to obtain making a decision on paying that tax on the benefit during open enrollment annually. It’s a no brainer to pay that tax making benefit payments non taxable.

On a separate note there’s basically two pays to determine benefit amounts. W-2 look back and pay rate times guarantee at the time you go out. Nobody is paying more than 60% of those numbers. There’s pluses and minuses to both.

As far as self insured through company I agree at a legacy self insured is the way to go. You’re eliminating third party costs making plans cheaper. At smaller carriers third party is better for the simple fact that if the carrier goes away the benefits don’t.

 

I think what make’s Delta’s LTD superior isn’t their LTD at all, but DPMA. I personally would make less money on Delta’s LTD alone versus what we have at United simply because I don’t work much and ours isn’t based on a look-back.

 

What’s DPMA?

Nevermind, just googled. Maybe Im missing something? 1 year max? 25% or $7500/mo max?

APA POD is 60 months and 40% of gross, max of $10k/mo. I pay $128/mo for that coverage.

 

look back isn’t always better. If you just upgraded, went to a higher paying seat, or were on a cola it can be a major problem vs pay rate times guarantee.