Help understanding terms of STD and LTD plans

[mrbean9]

I attached a breakdown of my employer's STD and LTD plans. I'm currently on STD, month 3.

For STD, it appears after the first 3 months of STD I'd get a max of $2800 per week for the next 3 months. Is that right, and am I correct that the $2800 is taxable?

For LTD, is the $12k benefit max meaning you can't receive more than $12k per month? So if your weekly pay at 100% is $6K is it right that you'd get $12k per month? Is it taxable?

For LTD, what does 24 months own occupation and 3/12 preexisting exclusion? And is max duration 67 years old?

I assume the insurance company evaluates you monthly or quarterly typically to ensure you are compliant and deserving of continuation?

 

[adjusterjack]

I'm currently on STD, month 3.

Your benefits are measured in weeks, not months. For example if you became disabled on 1/1/20, your first 12 weeks (after the 7 day waiting period) would end on 3/25/20 and not at the end of March.

For STD, it appears after the first 3 months of STD I'd get a max of $2800 per week for the next 3 months. Is that right,

For the second 12 weeks you would get 66.7% of your salary subject to a maximum weekly benefit of $2800.

am I correct that the $2800 is taxable?

Yes. You should probably have withholding taken out so you don't get an unpleasant tax bill.

For LTD, is the $12k benefit max meaning you can't receive more than $12k per month? So if your weekly pay at 100% is $6K is it right that you'd get $12k per month?

That's what it looks like to me.

Is it taxable?

Yes.

For LTD, what does 24 months own occupation

For the first 24 months your disability prevents you from performing the physical duties of your own occupation. After that you only continue getting paid if you cannot perform the duties of any occupation. If you are capable of sitting at a desk answering the phone, you will no longer collect disability benefits.

Is it taxable?

Yes.

And is max duration 67 years old?

Yes, if 67 is your normal retirement age.

I assume the insurance company evaluates you monthly or quarterly typically to ensure you are compliant and deserving of continuation?

You got that right.

Oh, no clue on the pre-existing thing. Your plan booklet should have an explanation.

 

[leevena]

Yes, it appears that your benefit after the first 3 months is $2800. As for taxation, it depends on how the employer funded plan was funded. If you and your employer both share in the cost of the plan, then you are taxed on the benefit amount you received due to the employer. For example, if you paid 75% and your employer paid 25%, your tax liability is on 25% of the benefit amount.

If you have a 125 plan, and you used pre-tax dollars to fund your cost, your benefit is taxed. If you used after-tax dollars, then the benefit is not taxable.

LTD benefit is maxed at $12,000 per month, that is the most you can receive. So, if you make $24,000 per month, it is maxed at $12,000.

Own occupation means you cannot do your own occupation, and that is what defines you as disabled. After the 24 months it likely reverts to a definition of disability as any occupation you are qualified for. By way of example, a surgeon injures both hands and cannot do surgery, so is disabled. At 24 months that surgeon will more than likely lose the disability benefit if they can perform another occ closely related to surgeon, such as teaching at a medical school.

Prexisting, if occurring within 3 months of effective date will have some form of limits for the first 12 months.

 

[mrbean9]

Prexisting, if occurring within 3 months of effective date will have some form of limits for the first 12 months.

Thanks for all the help you two.

Is this effective date the effective date for LTD or STD? So if the condition that justified my STD leave was diagnosed months prior to my STD leave, and the condition got worse, resulting in the need to go on STD, does that mean I'd be in the clear for LTD?

 

[fed up]

Certainly there is a HR dept in your company. They are your best resource and if not them, the carrier itself.

 

[leevena]

Thanks for all the help you two.

Is this effective date the effective date for LTD or STD? So if the condition that justified my STD leave was diagnosed months prior to my STD leave, and the condition got worse, resulting in the need to go on STD, does that mean I'd be in the clear for LTD?

The 3 months prior refers to the 3 preceding months of the LTD effective date. By way of example, let’s assume your LTD plan became effective 1/1/20. The question is, was the illness or injury causing the disability treated and/or known, within those 3 preceding months. In this example, those months would be October, November, and December of 2019. But please, read the definition in your plan document for the exact wording. I am giving you what I usually see.