Support Staff Policies & Procedures

Long Term Disability Policy & Procedure

(Revised 12/04)

Policy

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

Eligibility: 

The following classes as stated below are eligible:

Class 1: All active, Full-time employees in the following classifications: Executive Management, Tenured Faculty, Fraternal Order of Police, or FRIB/NSCL Continuing Appointment staff.

Class 2: All active, Full-time employees in the following classifications: Non-tenured Faculty, AP/APS/CT Confidential, Resident Advisors, Nurses, MSU Extension, APA, APSA, CTU, Local 274, Local 999, Local 324, and off-campus employees (excluding off-campus 1585 employees).

Class 3: All active, Full-time employees in the following classifications: Local 1585, off-campus 1585 employees.

Effective date of coverage:

The following classes are effective as stated below:

*Employees do not become ineligible for insurance by reason of a reduction in work schedule to half-time or more if they have 25 years of service or are 62 with 15 years of service.

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) 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 69, benefits continue to age 70, recovery or death, whichever occurs first. If total disability starts at age 69 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:
Years of service Employee: benefits after LTD terminates Survivor: benefits of an LTD recipient Survivor: benefits if active employee is deceased
Less than 5 years COBRA for 29 months* COBRA for 36 months COBRA for 36 months*
Five years but less than 15 years COBRA for 29 months* COBRA for 36 months One-year University contribution, then COBRA for 24 months
Fifteen years but less than 25 years (not vested) Eligible for University plan with cash payment for life Eligible for University plan with cash payment for life One-year University contribution, then may keep University plan for life by paying required monthly premium
Fifteen years and age 62 or 25 years of service (vested) Eligible for University health and dental contribution for life based on FTEs at end of leave Spouse eligible for lifetime contribution Spouse eligible for lifetime contribution

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

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

Procedure

Application for enrollment:

Filing a claim:
Employee:

  1. Immediately contact MSU Human Resources Workers' Compensation/Long-Term Disability in the event of sickness or disability which may lead to long-term disability.
  2. Contact your physician regarding your (in)ability to continue work. The benefit cannot be paid until you are off work a minimum of 180 days.
  3. If you believe you will be off work for a minimum of 180 days, you may contact CIGNA Group Insurance to begin the claim process. This can be done by calling CIGNA at 1.800.362.4462 or online at http://www.cigna.com/.

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 (telephone 517-353-4434 or e-mail solutionscenter@hr.msu.edu)

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