Group Long Term Disability Benefits

1. Group Long Term Disability Benefits Some employers offer “Long-Term Disability” insurance plans or “LTD” designed to provide benefits to participating employees who become too disabled to work. Some companies pay the cost of these LTD Plans as a fringe benefit. Other companies offer LTD as an option requiring payroll deductions from an employee’s salary. “Group LTD” benefits paid through a company benefits plan are governed by a federal law known as the Employee Retirement Income Security Act of 1974 (“ERISA”). An employee is a “participant.” Typically, the employer is the “plan administrator.” Unless the employer is “self-insured,” LTD claims are more often administered by insurance companies which act claims administrators and make determinations on claims for LTD benefits. Even self-insured companies may delegate the handling of such claims to a “Third-Party Claims Administrator,” to carry out this function and handle all matters relating to such claims.

2. LTD benefits are commonly subject to offsets for government disability benefits, such as Workers’ Compensation benefits (paid for on-the-job injuries or work-related illnesses) and Social Security disability (paid to the employee as well eligible dependents). If the total of Workers’ Compensation and Social Security Disability Insurance Benefits payments end-up completely offsetting the LTD benefit, LTD plans may pay minimum benefit, such as $100 or 10% of the gross LTD benefit). The maximum benefit period for LTD typically ends at age 65 or at one’s full retirement age for Social Security purposes. LTD benefits, once awarded, are subject to periodic reviews to determine whether the disability continues. Such reviews may be purely medical in nature or may include vocational re-evaluation or video surveillance. ----------------------------------------------------------------