Long Term Total Disability Program

Purpose

The University provides Long Term Disability (LTD) benefits for eligible 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.

In addition, an employee also may elect to purchase Supplemental Long Term Disability insurance coverage as offered by the University of Kentucky through payroll deduction if offered as an employer-sponsored benefit. Supplemental Long Term Disability coverage may be administered by an insurance company or similar entity.

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 at a prior employer 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 and certificate of coverage within the first 30 days of eligible employment.

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 twelve 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. Failure to follow requests to submit to such examinations may result in a denial or termination of benefits.

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 of Kentucky Initial Salary Continuation Long Term Disability Plan, formerly referred to as the University of Kentucky Supplemental Long Term Disability Plan, 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, benefits are paid in accordance with the formula described in this policy.
5. The University of Kentucky Supplemental Long Term Disability Plan is renamed, effective October 1, 2006, the “University of Kentucky Initial Salary Continuation Long Term Disability Plan” or “Salary Continuation Plan”.

7) LTD payments cease at the following occurrences:

1. At the time LTD ceases as defined in this policy;
2. At the beginning of the month in which the participant reaches age 65, if the onset of the LTD condition occurred prior to age 64;
3. For long term disabilities arising during age 64 or later, the duration of LTD payments is limited to 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 and after       60% of 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.
6. Any government payment, including those from foreign governments.

10)  The supplemental Benefit policies and payments, administered by an insurance company or similar entity,  may differ in structure from the University of Kentucky Long Term Disability Plan and Salary Continuation Plan.  Therefore, the terms and conditions of the University of Kentucky Long Term Disability Plan and any insured product may differ.

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; 
2. An intentionally self-inflicted disability; or
3. Active participation in a riot; or
4. Commission of a crime for which you have been convicted.

13) Benefits are not payable for any period of incarceration as a result of a conviction.

14) Benefits are limited to a maximum of 24 months during the lifetime of an individual for conditions involving:

1. Substance abuse of any type; and
2. Self-Reported illnesses including, but not limited to, fibromyalgia, chronic fatigue, and related conditions.

Process

Administration of the LTD program is a function of the Employee Benefits Office. 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.  An employee shall be separated from employment if the Long Term Disability claim is denied.  If the employee is eligible to retire, the employee must initiate the retirement process within 30 days of LTD claim denial or the individual may forfeit retirement eligibility.  The effective separation or retirement date shall be the date of initial LTD claim denial.

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. Payments for month 7 and after are charged to a University miscellaneous fringe benefit account established for that purpose and administered by Employee Benefits.

4) By submitting an application for LTD benefits, the applicant will be required to assert that they are totally disabled pursuant to the Plan Document with or without reasonable accommodation.  The department is not required to hold positions open during the LTD application process and the applicant is not guaranteed continued employment if the Long Term Disability claim is denied.

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 for a maximum of 29 months or until eligible for Medicare Part A and B.
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.