Long-Term Disability

Long-term disability plans provide benefits after short-term benefits expire. Group Long Term Disability protection is either fully paid by employers or its costs are shared by employees. Group disability protection may also be offered to employees on a voluntary basis, with employees paying all or most of the cost. The income from many group long-term plans is reduced by benefits such as Social Security and workers' compensation.

While some plans provide coverage until normal retirement age, most limit benefits for up to two years and define disability as the inability of an employee to perform his/her regular job. When employees remain disabled after two years, the definition changes, and usually benefits are paid only if they cannot perform any job "for which they are suited by education, training, or experience."

Many group policies also offer partial or residual disability benefits. These benefits are designed for those able to work part-time after a disability. Some Long Term Disability policies may require a period of total disability, under the current occupation test, before a claim is paid for a partial benefit, while others may not.

Employers considering a Group Long-Term Disability Plan should analyze the methods for funding the group plan. Benefit Sources & Solutions can help evaluate the benefits of having premiums paid by the employer against the advantages of having all or some of the premiums paid by employees with post tax dollars. This assessment can dramatically impact the actual value of the benefits should a claim arise.