Policies, Union Contracts, Handbooks > Support Staff Policies and Procedures

Long-Term Disability (LTD) Plan

(Revised 12/04)

Policy

The University provides income protection through a Long-Term Disability (LTD) Plan for eligible employees.

Eligibility: 

Regular full-time employee, other than a Graduate Assistant or Post-Doctoral Fellow, who is:  (1) A member of the tenured Faculty, Executive-Management, or Fraternal Order of Police; (2) A member of the Administrative-Professional staff or a  Nurse, and who is not on a flexible appointment, a Local 274 Stagehand, a non-tenured Faculty member, a Cooperative Extension Agent, a Resident Advisor staff member or a Supervisor, or a Clerical Technical Union employee or a Clerical Technical Confidential employee; (3) A member of Skilled Trades Local 999 or Local 547 Operating Engineers; (4) A 4-H Program Assistant, an Expanded Nutritional Aide, a Local 1585 Union Employee, or a Non-Union/Off Campus Employee; (5) A member of the Administrative-Professional staff, a Clerical Technical Union employee or a Nurse, and who is on a flexible appointment.

Effective date of coverage:

1. The following subsections will define by position when coverage will be effective if actively employed (not on a leave of absence):
   • the first day of the month coinciding with or next following the day of employment for tenured faculty and executive management, FOP and NSCL continuing appointment staff,
   • the first of the month after 12 full-time equivalent (FTE) service months for non-tenured faculty, AP confidentials, resident advisors, nurses, MSU Extension, APA, APSA, 274, 999, 547, CTU confidentials, Clerical Technical Union and off-campus CTUs, and
   • the first day of the month after 36 FTE service months for full-time 1585, non-union and off-campus employees.
2. Under certain conditions, employees who were covered by a group long-term disability program through a previous employer may enter the University's program immediately.

Summary of benefits:

1. The benefit is payable to employees who become disabled as defined in the LTD Master Contract (available at MSU Human Resources Benefits) and are unable to work due to sickness or bodily injury.   Disability or disabled is either:  (1)(a) for the first 30 months* of disability, being completely unable due to sickness, bodily injury, or pregnancy to perform the material and substantial duties of your normal occupation and not performing any other occupation; and (b) after the first 30 months, being unable due to sickness, bodily injury, or pregnancy to perform the material and substantial duties of any occupation for which you are reasonably qualified by education, training, or experience; or  (2) after you have been continuously disabled as defined in (1) above for at least 180 days, working but due to continuation of the same disability, being unable to earn more than 80% of your increasing monthly wage base.  You must be under the regular care of a physician, other than yourself or a member of your family.  *If benefits cease due to  termination of disability, a new 30-month period will not begin for a disability that:  (1) begins within 12 consecutive months of the end of the prior disability; and  (2) is due to the same sickness, bodily injury or pregnancy.
2. Benefits normally begin on the 181st day following the completion of 180 days of continuous disability. If total disability starts before age 60, benefits continue until age 65, recovery or death, whichever occurs first. If total disability starts on or after age 60 but less than 65, benefits are paid for 4 1/2 years, until recovery or death whichever occurs first. If disability occurs after age 65 but less than 68 1/2, benefits continue to age 70, recovery or death, whichever occurs first. If total disability starts at age 68 1/2 or over, benefits continue for one year, recovery or death, whichever occurs first.
3. The Extended Disability Leave benefit may be payable for 180 days from the employee's last day worked (see Policy and Procedure for Extended Disability Leave).
4. The monthly income benefit is 60% of monthly base salary up to $15,000.
   • Initial LTD benefit amount is offset by any Social Security, Workers' Compensation or other applicable wage replacement benefits. All employee groups are eligible to receive a monthly $50 minimum LTD benefit even if Workers' Compensation, Social Security and/or other applicable wage replacement benefit offsets equal the employee's monthly income benefit amount.
5. The monthly waiver benefit will pay both the employee's 5% and the University's 10% contribution to the Base Retirement Plan of the employee. This is in addition to the monthly LTD income benefit.
6. Both the monthly income benefit and the monthly waiver benefit are increased each year.  
7. In addition, the employee will receive the University contribution toward health, dental, and Employee-Paid Life benefits. The dependent option of the Employee-Paid Life Plan is continued when disability payments begin.  If the employee is not enrolled in the lowest cost health plan, he/she will be billed for the additional portion of the premium cost.
8. The plan administrator  makes the final determination of disability entitlement.

Premium contribution:

The University pays the entire cost of the benefit.

Termination date of benefit:

1. LTD coverage terminates on the employee's last day of active employment or transfer to an ineligible status.
2. This benefit continues for employees on a paid leave of absence.
3. Employees on an unpaid leave of absence continue to be covered up to 24 months if they engage in active work in the field of education or research; otherwise the coverage ceases on the last day of active work. For flex appointees, see Policy and Procedure for Flexible Appointments.

Conversion of coverage:

No conversion possible.

Retirement eligibility:

1. When an employee's LTD benefits cease, the University-contribution toward health care and dental benefits will continue if the employee accrued 25 years of service, or 15 years of service and age 62 before the end of his/her leave of absence (usually the first two years he/she is on LTD). Once an employee's leave ends, the employee does not accrue years of service toward retirement.
2. If an employee does not meet the above requirements, the employee is entitled to either COBRA benefits or cash for life benefits(the chart below clarifies which benefits an employee is eligible for, depending on years of service with the University).
3. If an employee dies while receiving LTD benefits, his/her eligible dependents are entitled to COBRA or cash for life survivor benefits. Benefit eligibility is outlined in the following chart:

*If Medicare is obtained prior to COBRA election, COBRA may be elected.

NOTE: For contribution amounts regarding health and dental benefits, see Policy and Procedure for Retirement From the University.
 

Procedure

Application for enrollment:

Filing a claim:

Employee:

1. Review The Standard Insurance Highlight Sheet.
2. Immediately contact MSU Human Resources Workers’Compensation/Long-Term Disability in the event of sickness or disability which may lead to long-term disability.
3. Contact his/her physician regarding his/her (in)ability to continue work.  The benefit cannot be paid until the employee is off work a minimum of 180 days.
4. Provide requested medical reports to MSU Human Resources Workers' Compensation/Long-Term Disability.
5. File an application with MSU Human Resources Workers’ Compensation/Long-Term Disability at a time which is approximately three months after the employee's last day on the job, or as soon as it is apparent the employee will be absent from work for 180 days.

Department:

1. Notify MSU Human Resources Workers’ Compensation/Long-Term Disability when they are aware of an employee's sickness or disability which may lead to long-term disability.
2. Direct employee to contact MSU Human ResourcesWorkers’ Compensation/Long-Term Disability.
3. Continue payment of accrued time until exhausted, then place employee on leave of absence due to sickness with the required documentation, i.e., a communication from the employee's physician. The leave of absence may be for two years from the employee's last day with pay.

Refer questions to:

MSU Human Resources Workers’ Compensation/Long-Term Disability (telephone 517-353-4434 or e-mail benefitsinfo@hr.msu.edu)