Disability Flashcards
1
Q
LTD
Disability Definition
A
- First 24 months = Own Occupation
- Month 25+ = Any Occupation
2
Q
LTD
Elimination Period
A
Aligns with STD + Sick leave to avoid coverage overlaps
3
Q
LTD
Benefit Period
A
- Set # of years
- “To Age 65”
4
Q
LTD
Taxes
A
- ER-paid premiums = taxable benefit
- EE-paid premiums non-taxable
5
Q
LTD
Benefit Offsets (Goal and List)
A
Goal = Offset other income sources to ensure total doesn’t exceed pre-disability earnings
- Social Security benefit offsets
- Reduced LTD benefits by disabled EE earnings
6
Q
LTD
Purpose of Limits and Exclusions
A
- Manage antiselection
- Avoid administration of subjective claims
7
Q
LTD
Limits and Exclusions
A
- Special conditions limitation clause
- Preexisting condition exclusions
- Other
- War
- Intentional Injury
- Felony
8
Q
LTD
Optional Benefits
A
- COLA
- Survivor benefit
- Childcare reimbursement
- Pension benefit
- Portability
- Conversion Option
- Spousal Benefits
- Catastrophic benefits
9
Q
LTD
Method to Reduce LTD Benefits by Disabled EEs Earnings (List and Define)
A
-
Proportionate Loss Formula
- % of lost work earnings is applied to benefits
-
50% Offset
- Benefit reduces by $1 for every $2 earned
-
Work Incentive Benefit
- Ignores earnings during initial period as long as earnings + benefit < pre-disability
- After period benefit is reduced by one of the other methods
10
Q
LTD
Why is Voluntary LTD increasing in popularity?
A
- Rising medical costs
- Greater recognition of need of disability plans
- More access through cafeteria plans
11
Q
STD
Differences between STD and LTD
A
- STD benefits are paid out weekly vs. monthly
- Smaller STD benefit amounts
- STD benefit period is shorter
- Higher STD claim frequency, but lower claim duration
12
Q
STD
Disability Definition
A
Own Occupation
13
Q
STD
Elimination Period
A
Very short (Common = 8 days)
14
Q
STD
Why is the STD benefit amount smaller than LTD?
A
- EEs have other sources of funds to meet short-term needs
- ER sick leave program supplements STD plan
- Not integrated with SS benefits
- Not as many exclusions
15
Q
STD
Optional Benefits
A
- 24-hour Coverage
- First Day Hospital Coverage = EP is waived if confined to hospital
- Survivor benefit
