Long Term Total Disability Program

Purpose

The University provides Long Term Disability (LTD) insurance for regular full-time employees. This coverage is provided on the first day of the month after the employee completes one full year of service. To be covered, an employee must be actively at work on this date. The LTD program is intended to make monetary benefits available to an employee in the event of long term total disability and is not a job protection program.

Policy

1) With approval from the Human Resources Office of Employee Benefits (Employee Benefits), a new employee who has been covered by a comparable employer-sponsored LTD plan within six months prior to employment at the University may be covered as of the first date of employment. Application for immediate coverage should be made in writing to Employee Benefits and include a comparable coverage plan document.

2) Total disability is defined as the inability of the employee, due to sickness or bodily injury, to engage in any occupation for which the employee is fitted by education, training or experience for more than six calendar months.

3) The University may decide to outsource certain administrative functions of the LTD program to a third party plan administrator.

4) The University and the plan administrator have the right to require medical and/or vocational examinations. The participant may be required to undergo rehabilitative training which would consider the nature and limitations of the disability.

5) LTD eligibility terminates as follows:

1. Upon termination of employment,
2. On the first day of the seventh month of an approved leave without pay,
3. Upon discontinuation of the program by the University, or
4. Upon retirement.

6) LTD payments are provided under two separate income benefit components.

1. Initial payments are made by the University and are a continuation of basic regular salary. These payments begin upon approval of the claim, as of the date of the onset of the disability and continue until the month following six calendar months.
2. For Faculty, the six months of pay is a faculty member’s six months of sick leave.
3. For staff, the employing department is responsible for making the initial six months of pay.
4. After the initial six months, primary and supplemental benefits are paid in accordance with the formula described in this policy.

7) LTD payments cease at the following occurrences:

1. At the time LTD ceases as defined in this policy;
2. In the age 65 birth month if the onset of the LTD condition occurred prior to age 60;
3. For long term disabilities arising after age 60, the duration of LTD payments are as follows

Age

60 up to 61:        60 months

61 up to 62:        48 months

62 up to 65:        36 months

65 up to 68:        24 months

68 up to 70:        18 months

70 up to 72:        15 months

72 & after:  12 months

4. Death; or
5. Failure of the employee to comply with the plan.

8) The benefit formula for LTD payments is as follows:

For months

1-6                  100% of employee’s base salary, less offsets

7-18                90% of employee’s base salary, less offsets

19-30              80% of the employee’s base salary, less offsets

31-42              70% of the employee’s base salary, less offsets

43 and after     60% of the employee’s base salary, less offsets

 

9) For primary benefits, the University’s LTD trust pays 60% of the basic regular monthly salary, less offsets. Trust payments are made at the end of the month. Offsets include, but are not limited to, the following:

1. Social security disability payments to which the participant or any dependent of the participant is or would be entitled upon application;
2. Worker’s compensation payments, awards and/or settlements;
3. Payments, awards and/or settlements of other disability plans covering the participant;
4. Damages or settlements recovered in third party actions; and
5. Any other recovery through subrogation.

10) Supplemental benefit payments are paid in conjunction with the primary plan formula, by an amount that produces benefits, from all sources, equal to the benefit formula as specified for the first 42 month period. These payments are made at the end of the month.

11) The University reserves subrogation rights should the disability arise as a result of third party negligence. Failure to protect the University’s rights may result in denial of all benefits under this program.

12) This program does not cover long term disability conditions that arise from or in conjunction with the following:

1. War, or any act of war, declared or undeclared; or
2. An intentionally self-inflicted disability.

Process

Administration of the LTD program is a function of Employee Benefits. The appropriate administrator in this office shall have approval authority for LTD payments.

1) To apply for benefits under this program, an employee shall contact Employee Benefits and complete the required application.

1. Any employee applying for benefits shall also make application for social security disability benefits. If the initial application is denied, the employee shall make three application attempts.
2. An employee applying for benefits under this program must be off of work before the application will be processed.
3. If an employee is also making application for benefits under worker’s compensation, the University reserves the right to hold the LTD application until the worker’s compensation claim has been settled.

2) An employee may appeal if a claim is denied. The appeal shall be made within 60 days of the denial. This appeal shall be sent to the Associate Vice President of Human Resources.

3) University payments made to employees during the first six months are charged to the department where the employee’s salary was budgeted as of the date of the onset of the disability. Supplemental payments for 7 through 42 months are charged to a University miscellaneous fringe benefit account established for that purpose and administered by Employee Benefits.

4) For an employee applying for LTD, the employee’s position shall be held open, until a final decision of the employee’s eligibility for LTD is determined.

5) Health Care Coverage

1. A person approved for LTD may continue to participate in the University health care plan.
2. A person who was eligible to receive the health plan credit at the onset of the disability shall continue to receive the credit while receiving LTD payments.
3. The dependents and family members of an eligible person may be enrolled in the University health plan, provided the employee was enrolled at the onset of the disability.
4. If a person receiving LTD payments drops University health care coverage, or if dependents or family members are dropped, the person, dependents or family members may not enroll in the University plan again. (see Human Resources Policy & Procedure 94.0 Health Care Plan Credit)
5. When a person receiving LTD payments retires, that person and the dependents and family members shall participate in the University health care plan according to the regulations that cover the retiree’s plan.
6. When a person is no longer eligible to receive LTD, that person, dependents and family members may elect to be covered under the University’s heath plan through COBRA.
7. If a person qualifies for Medicare health insurance, the person shall enroll in Medicare parts A and B as soon as eligible. Medicare will be the primary payer as long as the person is not actively at work and continues to qualify for Medicare.

6) Other benefits

1. Dental coverage for a LTD eligible person, dependents and family members shall continue as long as the required payments to the plan are made.
2. Coverage for basic life insurance, optional life and AD&D continue as long as the person makes the required payments for the plans.
3. Coverage for other voluntary benefits continues as long as the required payments are made.
4. The time a person receives benefits under the LTD plan counts toward years of service relating to retirement matters.