Long-Term Disability Policy

Purpose

To provide eligible employees with partial salary replacement for a non-work-related long-term illness or injury resulting in total disability.

Eligibility

Regular employees who work a minimum scheduled number of hours annually (for example, approximately 1,000 hours/year) are generally eligible; the company may designate other employee groups as eligible as well.

How it works

Long-Term Disability (LTD) provides partial salary replacement beginning after Short-Term Disability (STD) ends, for a period of total disability. Payment is typically a monthly amount calculated from base pay, offset by other income sources such as Social Security disability benefits, other government disability/retirement benefits, workers' compensation, and pension benefits — with a combined cap so total monthly income does not exceed a defined percentage (commonly around 60%) of prior base pay.

Definition of total disability

• First 24 months: unable to perform their own job, or a similar job within the company.
• After 24 months: unable to perform any job for which the employee is reasonably qualified by training, education, or experience.

Applying and medical management

Where STD is expected to extend into LTD, HR/benefits directs the employee to the LTD claim process with the plan's disability insurer/administrator, who reviews job requirements and submitted medical documentation to approve or deny the claim. The company may require an independent medical examination to verify the disability's nature, severity, and expected duration.

Rehabilitative work

An employee on LTD may continue receiving monthly payments while engaged in company-approved rehabilitative work, subject to an earnings offset (commonly around 50% of rehabilitative earnings), in addition to other income offsets described above.

Return to work

• If released to return to work, the employee is generally reinstated to their former position if it's available and they make a timely written request (for example, within 10 days of notice that their claim is ending).
• If the former position is unavailable, the company conducts an internal search for a similar role; if a suitable role is found, the employee interviews for it (pay may be adjusted to the new role).
• If no suitable position is identified within a reasonable window (for example, 30 days) of the request, employment may end.
• Extended absence generally has an outside limit (for example, 24 months, with some additional allowance where the absence is disability-related) before employment is terminated, excluding legally protected leave (such as military leave).

Successive disabilities

Recurring disabilities from the same accident, or the same/a related illness, are generally treated as one continuous disability unless separated by an actual return to active work.

Effect on other benefits

• Health coverage: the employee may typically elect to continue medical/dental coverage (including eligible dependents) while on approved LTD.
• Pre-tax spending accounts: contributions stop and the account is frozen once LTD begins; already-incurred eligible expenses can usually still be submitted for a limited grace period before unused funds are forfeited.
• Life insurance: basic/core life coverage commonly continues at no cost while on approved LTD (until a defined age or retirement); optional and dependent coverage may be continued at the employee's election. Accidental death & dismemberment coverage typically ends when STD ends.
• If employment ends while on LTD, benefit coverage generally ends as well, unless the employee had a substantial tenure (for example, 5+ years) before the disability began, in which case some continued coverage may be available.

Grounds for terminating LTD payments

Benefits may be discontinued or denied if the employee doesn't follow the prescribed treatment plan, doesn't complete a required medical exam, doesn't submit required documentation, falsifies records, misrepresents their condition, or engages in non-rehabilitative employment while receiving benefits.

Exclusions

LTD generally does not cover disability caused or contributed to by acts of war, intentionally self-inflicted injury or attempted suicide, imprisonment for a crime, or participation in a crime.

Responsibilities

Role	Responsibility
Human Resources / Benefits	Administers the plan; monitors case activity and cost; provides consultation.
LTD Claims Administrator/Insurer	Reviews and approves or denies claims; manages ongoing case administration.
Employee	Submits required documentation; complies with treatment plan requirements; requests reinstatement in writing upon release to return to work.