Frequently Asked Questions: Employer-Sponsored Long Term Disability Coverage

1) What is long term disability (LTD) coverage?
Long term disability coverage provides wage replacement to individuals who experience wage loss due to a disability. LTD coverage lasts for at least one year.

2) How do you obtain long term disability (LTD) coverage?

Long term disability coverage can be obtained either by a group or individually. Group coverage can be offered through an employer, professional group or association. Individual coverage can be purchased directly from an insurance broker based upon medical underwriting.

Individual policies are usually available if you have not had any medical treatment during the past 10 years for a potentially disabling medical condition. Medical treatment includes prescription medications and physician consultations.

3) Who is eligible for group long term disability (LTD) coverage?
If long term disability coverage is offered from an employer, the individual must work for a specified period of time - known as a service wait - prior to becoming eligible for benefits. For professional or association-affiliated LTD coverage the individual must be a member of the group for a set period of time.

4) How soon can I be eligible to enroll in group long term disability (LTD) coverage?
If you have employer-sponsored LTD coverage, you must meet the active work requirement to be eligible to enroll in LTD coverage. For professional or association-affiliated LTD coverage you must meet their specific requirements to be eligible to enroll in coverage. See summary plan description for further details.

5) How much income replacement will I receive from long term disability (LTD) coverage?
Long term disability coverage provides a monthly income replacement that is either a percentage of gross pre-disability earnings or a specified dollar amount. Variations do exist so be sure to check the summary plan description for details.

6) Why should I enroll in group long term disability (LTD) coverage during the initial enrollment period?
The initial enrollment period is the best time to enroll if you have a pre-existing condition. During the initial enrollment period, you are not subject to medical underwriting. However, pre-existing condition exclusions may limit or delay the use of coverage.

7) What is a pre-existing condition exclusionary period in long term disability (LTD) coverage?

A pre-existing condition is any medical condition for which “medical care” was received three to six months prior to the coverage effective date. LTD plans may have a pre-existing conditions exclusionary period. During this period of time, an individual's prior medical condition(s) will not be covered by the policy. However, after the pre-existing exclusionary period expires, the condition becomes covered under LTD coverage.

8) How do I meet a pre-existing condition exclusionary period for group coverage?

To meet the pre-existing condition exclusionary period for long term disability coverage you must:

Enroll during initial enrollment;
Continue membership in the group (employer, professional group, association); and
Remain enrolled in coverage during both the service wait and pre-existing condition exclusionary period.

Once the exclusionary period has passed, you will then be covered for any pre-existing disability.

9) How long does a pre-existing condition exclusionary period last in long term disability (LTD) coverage?
In long term disability coverage, a pre-existing exclusionary period can last between 12 to 24 months.

10) Does long term disability (LTD) coverage provide health coverage too?
No. Long term disability coverage only provides wage replacement. In employer-sponsored LTD coverage, the employer may use your eligibility for long term disability to determine continued eligibility for other benefits such as health and life coverage.

11) How much does long term disability (LTD) coverage cost and who pays for it?

If you have individual LTD coverage, you will be responsible for all costs.

If you have group LTD coverage, you may be responsible for no cost, a percentage of the cost or a set premium. With employer-sponsored LTD coverage, you may be responsible for the amount that is above what the employer elects to pay. This is determined by employer agreements with their insurance companies. Your employer, Human Resources Department or personnel staff can explain these benefit details.

12) How long does long term disability (LTD) coverage last?
LTD coverage can last from one year to age of retirement – usually 65. However, consult the summary plan description to verify the number of years covered by the insurance policy.

13) How do I stay enrolled/eligible for long term disability (LTD) coverage?

Enrollment and eligibility requirements depend on the type of long term disability coverage you have- group (employer, professional group, association) or individual. For example, if you have employer-sponsored LTD coverage, you will need to meet the active work requirement, which entails working a minimum number of hours per week. If you are unable to meet the active work requirements due to a disability, and you have passed the service wait and pre-existing condition exclusionary periods, LTD coverage may be used to replace a portion of your wages. If you have LTD coverage through a professional group or association, you will need to maintain membership to continue eligibility for benefits.

14) Does what I have in the bank or what I own affect my eligibility for long term disability (LTD) coverage?
No. There are no income or assets restrictions for long term disability (LTD) coverage.

15) What is the difference between long term disability (LTD) coverage and state and federal disability programs such as Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI)?

Long term disability coverage is private insurance offered through individual or group (employer, professional group or association) plans. LTD coverage does not have income and assets restrictions. Coverage varies between insurance policies. State and federal wage replacement programs are public benefits - Supplemental Security Income (SSI) and Social Security Disability Income (SSDI). To be eligible for public income replacement, an individual does not have to belong to a group but must meet specific requirements.

16) Are there immigration rules to qualify for long term disability (LTD) insurance program?
No. Immigration rules that should be considered relate to your legal residency status and whether you are legally authorized to work in California.

17) Can I keep my group long term disability (LTD) coverage if I no longer belong to the group that provided the benefit?
Yes. Some group LTD plans are portable if you are not disabled when you leave the group. Be sure to check your summary plan description to see if the plan has a portability option. If the LTD policy does not allow portability, you must reenroll in a new group during the initial enrollment period, complete the service wait and pre-existing condition exclusionary period again.

18) What other benefit programs are available to me and how will they work with long term disability (LTD) coverage?

Many additional benefits programs may be available to you depending on your work history or what benefits an employer has provided. They may include California State Disability Insurance (SDI), privately sponsored short term disability or Social Security Disability Insurance (SSDI). You may also be eligible to continue private health coverage continuation (COBRA, OBRA, Cal-COBRA, HIPAA). In certain circumstances, you may be eligible for Medi-Cal (Medicaid) or, after waiting periods have been satisfied, for Medicare.

19) What else should I know about long term disability (LTD) coverage?

If you reduce work hours due to a disability and the appropriate provision is included in your policy, you may be eligible to receive partial benefits. Check the summary plan description for details. Also, you may want to consider consulting a benefits planner about State Disability Insurance (SDI) or Social Security disability programs such as Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).