How LTD Works
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What to Do in Case of a Long-Term Disability
If a participant is unable to work due to a qualified disability lasting more than 180 days, he or she may be eligible for LTD benefits.
To assist the employee in transitioning from short term to long term disability claim with CIGNA, 45 days prior to STD maximum duration:
- Sedgwick CMS will submit the claim to CIGNA via Web Intake (https://dmswebintake.group.cigna.com).
- Sedgwick CMS will copy and send by overnight mail the medical records, job description, and payment history from the disability claim file. In addition, the Examiner will complete the form "Integrated Disability Management Transition Information" and send to CIGNA.
- Sedgwick CMS will send a letter to the claimant notifying them that they referred the claim to CIGNA for evaluation of LTD Benefits.
- CIGNA will acknowledge receipt of claim by sending out a confirmation letter to the employee once the online submission is completed.
- Within 10 days a dedicated claim manager will contact the employee via telephone to introduce themselves and notify them of the process. A follow up letter will be sent following this conversation to notify the claimant of any outstanding information and all applicable policy provisions.
Definition of Disability/Disabled
A participant is disabled if, because of injury or illness:
- He or she is unable to perform all the duties of his or her regular occupation, or only because of the injury or illness he or she is unable to earn more than 80% of his or her indexed covered earnings; and
- After disability benefits have been paid for 24 months, he or she is unable to perform all the duties of any occupation for which he or she may reasonably become qualified based on education, training or experience, or only because of the injury or illness he or she is unable to earn more than 80% of his or her indexed covered earnings. Refer to the evidence of coverage for more information about indexed covered earnings.
How LTD Benefits Are Paid
If the participant is receiving benefits from the LTD plan:
- Disability benefits are paid once a month;
- Benefits can be sent through the mail, or electronically deposited;
- If not directed otherwise, the participant will receive a check mailed to his or her home or address of record from the insurance company; and
- There are no deductions other than applicable taxes and offsets (see the evidence of coverage for more details).
Overview of LTD Benefits
If a participant is unable to work after 180 days of continuous disability, he or she may become eligible to receive LTD benefits. LTD benefits are equal to 66 2/3% of a participant's annual base salary, up to $13,890 a month, minus any reductions for other income benefits (state disability, Social Security disability, etc.). The minimum monthly benefit is $100 or 10% of the participant's annual base salary, whichever is greater.
LTD is underwritten by LINA (a CIGNA company), and a participant must meet the plan's criteria for disability to qualify for income replacement under this program. Refer to the plan's evidence of coverage for more information about qualifying for income replacement.
The following maximum benefit periods apply:
| AGE WHEN PARTICIPANT'S DISABILITY BEGINS: | MAXIMUM BENEFIT PERIOD: |
|---|---|
| AGE 62 OR UNDER | The employee's 65th birthday or the date the 42nd Monthly Benefit is payable, whichever is later |
| AGE 63 | The date the 36th Monthly Benefit is payable |
| AGE 64 | The date the 30th Monthly Benefit is payable |
| AGE 65 | The date the 24th Monthly Benefit is payable |
| AGE 66 | The date the 21st Monthly Benefit is payable |
|
AGE 67 |
The date the 18th Monthly Benefit is payable |
| AGE 68 | The date the 15th Monthly Benefit is payable |
| AGE 69 OR OLDER | The date the 12th Monthly Benefit is payable |
LTD Limitations and Exclusions
LTD benefits are provided based on certain maximums and exclusions. For more information, participants can also refer to "What the LTD Plan Does Not Cover."
Pre-Existing Conditions
LTD benefits will not be paid for any disability caused by, contributed to or resulting from a pre-existing condition. A "pre-existing condition" means any injury or illness for which the participant:
- Incurred expenses;
- Received medical treatment, care or services including diagnostic measures;
- Took prescribed drugs or medicines; or
- For which a reasonable person would have consulted a physician within three months before his or her most recent effective date of insurance.
The pre-existing condition limitation will not apply to a participant covered under a prior plan who satisfied that plan's pre-existing condition limitation, if any. It will still apply to any benefit amount greater than that of the prior plan. If the participant did not completely satisfy the pre-existing condition limitation of the prior plan, he or she will receive credit for any time that was satisfied.
Time will not be credited for any day a participant is not actively at work due to his or her injury or illness. The pre-existing condition limitation will be extended by the number of days the participant is not actively at work due to his or her injury or illness.
Benefit Maximums for Certain Conditions
LTD benefits will be paid on a limited basis during a participant's lifetime for a disability caused by, or contributed to by, any of the following conditions. Once 24 monthly disability benefits have been paid, no further benefits will be paid for any of the following conditions:
- Alcoholism
- Anxiety disorders
- Delusional (paranoid) disorders
- Depressive disorders
- Drug addiction or abuse
- Eating disorders
- Mental illness
- Somatoform disorders (psychosomatic illness)
If before reaching the lifetime maximum of 24 monthly benefits, a participant is confined in a hospital for more than 14 consecutive days for the appropriate care of any of the conditions listed above, that period will not count against the lifetime limit.
For a complete list of the LTD plan's limitations and exclusions, refer to the plan's evidence of coverage.
The Plan Determines Eligibility and Certifies Disability
The plan's claims administrator, CIGNA, determines eligibility and makes a determination of disability.
CIGNA, at its expense, has the right to examine, as often as reasonably required, any participant with a pending claim. CIGNA may also require an autopsy, at its expense, unless prohibited by law.
There is a formal appeal process if the participant disagrees with the determination of the claims administrator. For more information on the appeal process, refer to the plan's evidence of coverage.
Confidentiality
All medical information that a participant and his or her physician supply to the LTD plan is kept confidential and will be protected from unauthorized use. Certain claims for non-occupational disability benefits may require the use of a special, written authorization form. If a participant receives one of these forms, he or she will need to sign and return it as soon as possible so there is no delay in processing the claim.
LTD Claims Management
The LTD plan will require that the participant cooperate in collecting the medical information necessary to review the claim and make a benefit determination. The most common reason that claim payments are delayed is the failure of the participant's health care provider to return calls, return forms or otherwise provide medical documentation. A participant can help the plan administrators make more timely decisions by:
- Explaining to the health care provider that the administrator will be contacting them;
- Following up with the health care provider's office after a request for information has been made to ensure that the information is being collected and sent to the administrator; and
- Notifying CIGNA immediately if the participant's return-to-work plans change, or if the health condition significantly changes (for example, if a surgery is needed). This will allow the plan administrator to help the employee file for an extension of benefits, if appropriate.
Continuation of Insurance
Disability insurance continues if a participant's active service ends because of a disability for which covered benefits are or may become payable. Premiums for the participant will be waived while disability benefits are payable. If the participant does not return to active service, this insurance ends when the disability ends or when benefits are no longer payable, whichever occurs first.
If a participant's active service ends due to an employer-approved unpaid leave of absence, insurance for that participant will continue for up to 24 months if the required premium is paid. If a participant's active service ends due to family medical leave of absence, insurance for that participant will continue for up to 12 weeks if the required premium is paid.
Rehabilitation During a Period of Disability
If, while a participant is disabled, the plan determines that he or she is a suitable candidate for rehabilitation, he or she may participate in a rehabilitation plan. The terms and conditions of the rehabilitation plan must be mutually agreed upon by the participant and the plan.
The plan may require a participant to participate in a rehabilitation assessment or a rehabilitation plan at its expense. The plan will work with the participant, the employer and the participant's physician and others, as appropriate, to develop a rehabilitation plan. Disability benefits will not be paid if the participant refuses to participate in the rehabilitation efforts.
The rehabilitation plan may, at the plan's discretion, allow payment of the participant's medical expense, education expense, moving expense, accommodation expense or family care expense while he or she participates in the program.
A "rehabilitation plan" is a written agreement between the participant and the plan in which the plan agrees to provide, arrange or authorize vocational or physical rehabilitation services.
Work Incentive Benefits
For the first 12 months the participant is eligible for a disability benefit, the disability benefit is determined based on the minimum and maximum disability benefit. If for any month during this period, the sum of the participant's disability benefit, current earnings and any additional other income benefits exceeds 100% of his or her indexed covered earnings, the disability benefit will be reduced by the excess amount.
After the first 12 months, the disability benefit is determined based on the minimum and maximum disability benefit, reduced by 50% of his or her current earnings received during any month he or she returns to work. If the sum of the participant's current earnings and any additional other income benefits exceeds 80% of his or her monthly indexed covered earnings, the disability benefit will be reduced by the excess amount figured above. No benefits will be paid if the plan determines the participant is able to work under a transitional work arrangement or other modified work arrangement and he or she refuses to do so.
Current earnings include any wage or salary for work performed while disability benefits are payable. If participant is working for another employer on a regular basis when disability begins, current earnings will include any increase in the amount he or she earns from this work during the period for which disability benefits are payable.
Survivor Benefit
The plan will pay a Survivor Benefit if a participant dies while monthly benefits are payable. The participant must have been continuously disabled for the survivor benefit waiting period before the first benefit is payable. These benefits will be payable for the maximum benefit period for Survivor Benefits.
Benefits will be paid to the participant's spouse or registered domestic partner. If there is no spouse or registered domestic partner, benefits will be paid in equal shares to the participant's surviving children. If there are no spouse/registered domestic partner and no children, no benefits will be paid.
"Spouse" means a participant's lawful spouse. "Registered Domestic Partner" is defined in the Eligibility section. "Children" means a participant's unmarried children under age 21 who are primarily dependent upon the participant for support and maintenance. The term includes a stepchild living with the participant at the time of his or her death.