Supplemental Disability Insurance

  1. Supplemental Disability Insurance Overview
  2. Short-Term Disability Insurance
  3. Long-Term Disability Insurance
  4. Pre-Exiting Conditions
  5. Limitations and Exclusions
  6. Other Income Reductions
  7. Payments Are Taxable
  8. Filing a Claim

Supplemental Disability Insurance Overview

The Short-Term Disability plan and the Long-Term Disability plan are designed to replace a portion of your income if you become disabled and are unable to work due to illness or injury. You may enroll for the short-term plan separately or one of the long-term plans or a combination of the short-term plan with one long-term plan.

Disability insurance protects your most valuable financial asset—your ability to work and earn an income. It insures that if you are not able to work due to an injury or illness, you will still have an income source. It protects you, your family and your future from suffering financial disaster if an unexpected illness or injury occurs.

  • Today’s 20-year-old has a 3 in 10 chance of becoming disabled before retirement age.
  • Nearly 1 in 7 working age people will be disabled for 5 years or more prior to age 65—that number increases to nearly 1 in 5 for ages 35 to 65.
  • Over 36 million Americans are classified as disabled and 50% of them are in their working years.

Disability insurance pays benefits if you are totally disabled. During years one and two of Long-Term Disability you must be unable to perform the duties of your current job. After 2 years you must be unable to perform any job.

By replacing a portion of your income while you’re disabled, you’re protected against the losses that can occur when your paycheck stops. It is comprehensive—covering you both on and off the job.

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Short-Term Disability Insurance

Short-term disability (STD) protects you in the event of a brief absence from work. It can also fill in the waiting (elimination) period before long-term disability benefits begin.

STD benefits can begin after you’ve been disabled and off work for 30 days. If you are still in pay status from accrued or donated leave at that time, benefits begin after you exhaust all paid leave. STD pays $577 per week, less other income (see below). Benefits continue as long are you are disabled, for up to 180 days from the date of disability.

  • Benefit Amount

    Your weekly benefit will be $577, minus any other disability or retirement benefits you receive as described below.

  • Premiums

    Short-Term Disability (STD) covers 60% of your monthly base pay, up to a maximum of $577 per week. The cost for this benefit is $2.04 per month.

    2017 Short-Term Disability Rates
    Who is Covered Plan Monthly Cost
    Employee Plan A (60%) $2.04
    Effective: Jan. 1 - Dec. 31, 2017
  • Coverage Begins

    If you become disabled while enrolled in the Short-Term Disability plan, benefits will begin the 31st day of a disability absence or when all paid leave has been exhausted, whichever is later. A “disability absence” is any absence from work caused by an injury or a disease. To receive benefits, you must first submit medical certification of your disability from your physician.

  • Duration of Payments

    Benefits may be paid for a period of disability of up to 180 days which begin on the date you are first disabled or until Long-Term Disability benefits commence, regardless of whether full benefits have been realized.

  • Recurring Periods

    One “period of disability” may include more than one disability absence. Disability absences due to the same or related causes and separated by less than two consecutive weeks of full-time work will be considered to be the same period of disability. A new disability absence due to a cause different from that of any prior disability must be separated from the prior disability by at least one day of full-time active work for you to become eligible for a new maximum period of payment.

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Long-Term Disability Insurance

Long-term disability (LTD) protects you in the event of an extended disability. Benefits begin after you’ve been disabled and off work for at least 180 days. Benefits continue for as long as you remain disabled—up to age 65 if you are disabled before age 60 or for up to 4-½ years if you are disabled after age 60. You may elect a plan that covers either 50% or 70% of your salary, less other income.

Your premium is based on your monthly base wage. Your wage is updated as of October 1 for the benefit year that begins January 1. If you are disabled, benefits are calculated at 50% or 70% of your base wage, depending on the plan you select. The maximum monthly benefit is $8,000. Some other types of income (see below) are deducted from this amount before your benefits are paid. If other income reduces your benefit to less than $100, the plan will pay the minimum $100 monthly benefit.

  • Benefit Amount

    Depending upon which LTD plan you are enrolled in at the time of your disability, your monthly benefit will equal either 50% or 70% of your monthly base pay, reduced by any “other income.” “Monthly base pay” is your pay of record on OCtober 1 for the benefit year beginning on the first day of the following January. It excludes bonuses, overtime, and other compensation. Adjustments may be made for part-time, seasonal or newly-hired employees.

    For both options, the maximum monthly benefit payable is $8,000, and the minimum benefit is $100 per month. Appropriate adjustments will be made for partial months.

  • Premiums

    Long-Term Disability (LTD) is available in 2 levels. You can elect to have either 50% or 70% of your monthly base pay covered.

    2017 Long-Term Disability Rates
    Age Rate Per $100 of covered payroll
    Plan B (50%) Plan C (70%)
    under 25 $0.28 $0.63
    25-29 $0.29 $0.64
    30-34 $0.29 $0.65
    35-39 $0.30 $0.66
    40-44 $0.31 $0.70
    45-49 $0.34 $0.75
    50-54 $0.37 $0.82
    55-59 $0.41 $0.89
    60-64 $0.42 $0.91
    65-69 $0.44 $0.94
    70+ $0.54 $1.13
    Effective: Jan. 1 - Dec. 31, 2017
  • Coverage Begins

    Initially to receive benefits from this plan, you must be disabled from performing the duties of your current job. After 2 years you must demonstrate an inability to perform any job. You must be under the care of a licensed physician, and must be certified as disabled.

    Benefits will begin after you have completed a six-month waiting period of total disability. This waiting period begins on the day you are both totally disabled and under the care of a physician. You will be considered disabled no earlier than 31 days before the date you are first seen and treated by a qualified physician for the cause of your disability.

  • Duration of Payments

    If you are disabled at age 60 or younger, benefits may be paid to you until you reach age 65. If you are disabled at age 61 or over, the following table shows how long payments may be made.

    2017 Long-Term Disability Benefit Period
    Age at Disability Duration of Benefit Payments
    Under 60 To age 65
    61 48 months
    62 42 months
    63 36 months
    64 30 months
    65 24 months
    66 24 months
    67 18 months
    68 18 months
    69 18 months
    70 & over 12 months
    Effective: Jan. 1 - Dec. 31, 2017

  • Recurring Periods

    Once a period of total disability has ended, any new period of disability will be treated separately. Two or more separate periods of total disability that occur while you are covered under this plan and resulting from the same or related causes will be considered as one period if they are separated by less than three months.

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Pre-Exiting Conditions

Pre-existing Condition means a sickness or injury for which, in the 3 months before a Covered Person becomes insured under this Certificate, or before any benefit Increase with respect to such Covered Person:

  • medical advice, treatment or care was sought by such Covered Person, or, recommended by, prescribed by or received from a Physician or other Practitioner of the Healing Arts; or
  • symptoms, or any medical or physical conditions existed that would cause an ordinarily prudent person to seek diagnosis, care or treatment.

Illnesses that occur in the first 12 months of coverage due to the preexisting condition are excluded.

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Limitations and Exclusions

The disability plans don’t pay benefits for a disability that results from

  • War, declared or undeclared, or any act of war
  • Active participation in a riot
  • Intentionally self-inflicted injuries
  • Loss of professional license, occupational licenses or certification
  • Commission of a crime for which you have been convicted under state or federal law
  • Any period of disability during which you are incarcerated

No more than 24 months of benefits will be paid if a total disability is caused by one of the following:

  • mental or nervous conditions other than Schizophrenia, Bipolar I Disorder or Neurocognitive Disorders.
  • conditions caused by or contributed to by chemical dependency, or hallucinogenic substances.
  • Neuromuscular, musculoskeletal and soft tissue disorders.
  • Chronic fatigue or Fibromyalgia.
  • Self-reported conditions.
  • Pregnancy Coverage

    Benefits for a totally disabling pregnancy-related condition are paid to female employees on the same basis as for any other condition. As with any disability, a physician must certify that the employee is totally disabled, and additional evidence may be required before a determination is made whether benefits will be paid.

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    Other Income Reductions

    The disability plans pay benefits after deducting other income benefits as shown below:

    • Federal Social Security (Old Age & Disability) – Primary
    • Federal Social Security (Old Age & Family) – Family
    • Railroad Retirement Act
    • Any state or public retirement or disability plan: State Teacher Retirement System, Public Employee Retirement System, Federal Employee Retirement System
    • Pension or disability plan from a political subdivision
    • Disability or retirement income received under the Employer’s Retirement System (Employer Contributions only)
    • Pension benefits
    • Any income received for disability under a group insurance policy with employer contributions for lost time from work due to disability or installment payments for permanent total disabililty
    • No-fault auto loss of income
    • Government compulsory benefit plans or programs for lost time (state mandated programs)
    • Self-funded plan, or other arrangement, if employer contributes or payroll deducts
    • Any sick pay, vacation pay, or other salary continuation
    • Workers’ Compensation or a similar law which provides for periodic benefits
    • Laws providing for maritime maintenance and cure
    • Occupational disease laws
    • Unemployment insurance law or program
    • Income received while working as part of a rehabilitation incentive
    • Third party recoveries

    If you receive “other income” in a single lump sum, that payment will be subtracted from your disability benefit over 60 months. The disability carrier will have the right to make retroactive adjustments for any lump sum payments received from a retroactive award.

    Other income that is not deducted from the disability benefit includes:

    • SBS Annuity payments
    • Deferred Compensation
    • Reasonable attorney fees for awards and/or settlements
    • Mortgage disability insurance
    • Non-voluntary early retirement
    • Veteran’s beenfits
    • Accelerated death benefit payments
    • Amounts rolled over ot a tax- qualified plan and not taken while benefits are being paid.

    When you consider whether to purchase disability insurance, you must first consider the benefit you would receive. If you have other income, you should review and ask yourself, could you live on your retirement, savings, or other assets alone?

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    Payments are Taxable

    Since these disability plans are part of the Voluntary Benefits program, you have the advantage of paying for coverage with earnings deducted from your salary before federal income taxes are withheld. That reduces the cost of your coverage. Due to these tax advantages, however, disability benefit payments you receive from the plans are subject to federal income tax.

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    Filing a Claim

    You must apply for disability benefits under these plans within one year after the date you become totally disabled.

    The carrier, at its own expense, has the right to examine you if you have filed a claim. Examinations may be made as often as they are reasonably required during the period for which you claim benefits.

    The carrier also has the right to recover any overpayment of disability benefits either directly from you or by deduction from your future monthly benefit payments.

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