Your disabled employees want a quick and safe return to work as well. For most Americans, work is much more than a source of income. It provides a sense of identity, a structure for accomplishment, and a source of social interaction. If illness or injury suddenly makes work impossible, we face a major personal challenge – to get back to productive work, back to our careers, and back to our everyday lives. All of your employees understand the need to insure their homes and cars – but surprisingly few insure the asset that makes all the others possible… their income. Disability insurance supplies your employees with an income when injury or illness prevents them from working and earning their regular income.

Group Short-Term Disability Insurance

Why should an employer offer Short-Term Disability Insurance?

Short-Term Disability (STD), also called Weekly Indemnity (WI), coverage is designed to provide partial replacement of an insured employee’s weekly earnings, for a limited period, in the event of an injury or illness that results in disability. STD income protection typically begins when an employer’s sick-pay plan ends, or it can be used to supplement sick pay. Either way, STD insurance provides income protection for disabilities that last up to three, six or twelve months.

Additional benefits of STD

• STD may eliminate an informal, inconsistent sick leave plan.
• An employer or employee pays a set monthly premium payment for salary protection.
• Professional, empathetic, and consistent claim administration provides quality service to employees and takes difficult claim decisions off the hands of the employer.
• Immediate intervention encourages employees to return to work as soon as possible.

Features and Options

• Groups may be insured under a Group Long-Term Disability plan. Short-Term Disability is also available on a stand­alone basis.
• Non-occupational and occupational (24-hour) coverage is available.
• The employee must participate in Worker’s Compensation for occupational coverage.
• Participants must be full-time employees working at least 30 hours a week (20 hours for school employees).
• A 100% participation rate is required for non-contributory plans.
• As low as 50% percent participation rate is required for contributory plans.
• Temporary or seasonal employees are not eligible.

Elimination Periods

The elimination period is a period of consecutive days of total disability starting on the first day of disability. Disability must continue through the elimination period before payment to the insured is made.

• Elimination periods for injury are 0,7,14, and 30 days.
• Elimination periods for sickness are 3,7,14, and 30 days
• First-day hospital benefit is available.

Standard Benefit Percentages of Income Replacement

• 50 percent of pre-disability earnings
• 60 percent of pre-disability earnings
• 66 2/3 percent of pre-disability earnings
• 70 percent of pre-disability earnings

Bonus or incentive pay may be included in earnings if there is a formal, documented plan that is based on a pre­determined formula.

Benefit Duration Schedules

• up to 13,26, and 52 weeks
• The STD benefit payment duration must coincide with the Long-Term Disability elimination period to avoid an overlap on benefit payments.

Maximum Payment Amount

• The maximum benefit amount is designed to provide reasonable protection to the highest-paid workers in a group. However, top-heavy plans must be avoided and an appropriate spread of risk maintained.
• The standard maximum benefit is $1,000 a week.
• The highest amount available is $2,500, which requires underwriting pre-approval.

Ineligible Industries

The following industries are generally ineligible for STD coverage:

• Service industries, including laundries, cleaners, amusement or recreation services, beauty salons, barbershops, bowling alleys, and pest control services.
• Hotels, motels, and restaurants.
• Hazardous or seasonal industries, including mines, quarries, oil drilling and rigging, lumber yards, farms, ranches, charter and other nonscheduled airlines, aviation and pilot training schools, golf clubs, resorts, and camps.

Group Long-Term Disability Insurance

Why should an employer offer Long-Term Disability Insurance?

Without a Group Long-Term Disability (LTD) insurance plan, employees can be financially devastated if they are stricken with disability. The employer also faces many difficult challenges that begin with the decision to continue or to stop paying the disabled employee. Without a plan to manage disability and income replacement, employee morale may suffer, resulting in higher turnover and additional costs to the employer.

LTD provides reasonable income replacement for employees who become totally disabled for extended periods of time as the result of injury or sickness. Coverage can be designed from an array of diversified and competitive features. A LTD plan can provide various levels of protection, ranging from a basic plan to top-of-the-line coverage, for Employers who are truly concerned about the welfare of their employees and their families.

Additional benefits of LTD

• LTD is an integral component of a benefits package that attracts high-caliber talent.
• LTD is one way to offer income protection in a practical and cost-effective way.
• An LTD plan complements and formalizes a salary-continuation policy for the employer.
• Professional, empathetic, and consistent claims administration provides quality service to employees and takes difficult claim decisions off the hands of the employer.
• Many employers choose to offer income protection for employees who become totally disabled.

Underwriting and Rating

• Liberal range benefit and risk spread allow a group to have up to 80 percent high-risk occupational content.
• Prior insurance credit or continuity of coverage assures a transition between plans, with no loss of credit towards pre-existing waiting periods.
• Multi-year rate guarantees are available.
• The firm must have been in business for at least two years (one year for select firms).
• Based on the Standard Industrial Classification (SIC) code, prospects will fall into one of the following occupational risk categories: Target Market, Aggressive, Standard, Nonstandard, or Exception.
• Ineligible industries include hotels, motels, restaurants, and hazardous or seasonal industries, including mines, quarries, oil drilling and rigging, lumber yards, farms, ranches, charter and other nonscheduled airlines, aviation and pilot training schools, golf clubs, resorts, and camps.

Individual Employee Eligibility

Participants must be non­seasonal, full-time employees working at least 30 hours a week (20 hours for school employees).

Salary Replacement Ratios and Plan Maximums

• Standard replacement of monthly salary is 60 percent. Also available are 50 percent or 66 2/3 percent replacements.
• Standard minimum benefit is the lesser of $100 or 10 percent of gross monthly benefit.
• The standard maximum is $6,000. Higher maximums may be available.

Definition of Disability Features

• Two-year own occupation definition of disability is standard.
• Recurrent disability provision.
• Extensive own occupation, with or without residual through elimination period.
• 12-, 24-, 36-, or 60-month own occupation, with or without residual through elimination period.
• 24-month own occupational/activities of daily living (ADL), with or without residual through elimination period. ADLs including bathing, dressing, toileting, transferring, mobility, eating, and continence (only one ADL is required).

Benefit Durations

These benefit durations comply with the Age Discrimination in Employment Act (ADEA).

• Reducing Benefit Duration (RBD)
• Social Security Normal Retirement Age (SSNRA)
• 65/5/70
• 2 year with RBD
• 3 year with RBD
• 5 year with RBD

Elimination Periods

• The standard period is 180 days. Also available are 30, 60, 90, 120, 150, and 360 days.
• Accumulation of elimination period

Features and Options

• Waiver of Premium
• Full maternity
• Cost-of-living freeze. The benefit is not reduced due to any cost-of-living increase payable under other income benefits.
• Social Security assistance
• Vocational rehabilitation services

Enhanced Features

• Escalation benefit
• 3- or 6-month survivor benefit
• Workplace modification benefit
• A 401(k) and pension-contribution benefit contributes to a qualified plan when the employee is totally disabled.

Integration Methods

• Primary only
• Primary and family integration
• Primary integration or integration of 70 percent of all sources
• Integration of 60 percent of all sources (requires 50 percent benefit and family integration)
• Integration of 70 percent of all sources (requires 60 percent benefit and family integration)
• No integration with certain retirement plans

Pre-Existing Exclusion Periods

• 12/6/24 or 12/24(standard for small groups)
• 3/6/12 or 3/12
• 5 days actively at work