Long-Term Disability Insurance
What is Long-Term Disability Insurance?
Long-Term Disability (LTD) insurance pays you a benefit if you are unable to work because of a disabling injury or illness. Benefits continue as long as you meet the plan's definition of disability or you reach the plan’s age limit. Accidents and illness can have serious financial consequences for you and your family. LTD provides financial protection to you at a reasonable cost.
Depending on your employee group, you may be eligible for one or both of the LTD plans. The “60% after 6 months” plan pays you 60% of your gross monthly income after a 6 month elimination period. The “65% after 4 months” plan pays you 65% of your gross monthly income after a 4 month elimination period. The “60% after 6 months” plan includes a benefit deposited into a flexible premium deferred annuity account established and maintained by you. If eligible for both plans, you may only elect one plan at a time. The maximum benefit is $4,000 per month.
If you are an unrepresented employee earning more than $80,000 in base pay annually, you may select a supplemental LTD plan. The maximum benefit under the supplemental plan is $20,000 per month.
You and the university share the cost of LTD insurance (unless you choose to waive coverage). You pay your share of the cost with after-tax contributions from your pay. The cost of coverage is based on your annual base pay, length of the waiting period before benefits begin, monthly benefit level and plan limitations.
If you select a supplemental LTD plan, the cost of coverage based on annual base pay above $80,000 is age-based and completely paid by you.
If you receive LTD benefits, part of your disability benefit will be taxable. You will pay income taxes on the part of your LTD benefits related to university contributions. However, you will not pay taxes on the part of your LTD benefits related to your contributions, because you paid for this coverage
You pay the full cost of your LTD insurance (unless you choose to waive your annual coverage). You pay with after-tax contributions from your pay. The cost of coverage is based on base pay, length of the waiting period before benefits begin, monthly benefit level and plan limitations.
If you receive LTD benefits, your LTD benefit will be non taxable as you paid for this coverage with after-tax dollars.
When making a decision concerning LTD coverage, your retirement program may influence your election.
Employees enrolled in the grandfathered TIAA/Fidelity/Vanguard, the OPERS/STRS Defined Contribution, and the Alternative Retirement Plan (ARP) do not have a disability retirement provision in their retirement plan. These individuals may want to consider some level of LTD coverage.
- TIAA-CREF, Fidelity or Vanguard Retirement Plans: If you are in the grandfathered TIAA-CREF, Fidelity or Vanguard Retirement Plan, you will be eligible to receive the benefit deposited into the flexible premium deferred annuity account if you do not enroll in an LTD plan.
- STRS, OPERS and City Retirement Plan: Employees participating in STRS or OPERS Defined Benefit plans or the City of Cincinnati Retirement System who have five or more years of service credit may qualify for disability retirement. You must be totally and permanently disabled to qualify for disability benefits under these plans.
- You cannot change LTD plans during the year even if you have a qualified status change.
Certain limits apply to these plans including:
- Your LTD benefit is based on your gross monthly income from UC in effect just prior to your date of disability. It includes your total income before taxes, prior to any deductions made for pre-tax contributions to a qualified deferred compensation plan, Section 125 plan or flexible spending account. It does not include income received from commissions, bonuses, overtime pay, shift differential or any other extra compensation.
- The LTD plans limit benefits for pre-existing conditions. A pre-existing condition is an injury or illness diagnosed or treated within six months prior to and 12 months after the effective date of coverage.
- The LTD plans limit disability payments for mental illness to a maximum of 24 months, unless you are hospitalized. If you are confined to a hospital or institution at the end of the 24 month period, Unum will continue to send you payments during your confinement. If you are still disabled when you are discharged, Unum will send you payments for a recovery period of up to 90 days.
- LTD benefits are paid for a specific period during which you are unable to perform the essential functions of your own job. This period is different for each LTD option and is called the Own Occupation Period. Once the Own Occupation period is over, your LTD benefit will continue only if you are unable to perform the essential duties of any job for which you are reasonable qualified.
- Your LTD benefit will be reduced by the amount received from other sources (Social Security, Worker’s Compensation, government plans, including a state retirement plan, etc.) In any case, your monthly benefit from this plan will never be less than $50.
- OPERS provides disability benefits for members enrolled in the Traditional and Combined plans. Health care may also be available. Employees must have 5 years of service to be eligible for disability benefits. Employees should contact OPERS at 1-800-222-7377 to determine eligibility for disability benefits and health care benefits. More information is also available at: https://www.opers.org/members/traditional/benefits/disability.shtml
- STRS disability benefits are dependent on the retirement plan the member has chosen. Health care may also be available. Employees must have 5 years of service to be eligible for disability benefits. Employees should contact STRS at 1-888-227-7877 to determine eligibility for disability benefits and health care benefits. More information is also available at: https://www.strsoh.org/active/1b.html