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Short-Term
Disability Insurance If you were to become sick or disabled tomorrow and were unable to work for two or three months, would you have enough savings to cover your living expenses during that time? If you don't, short-term disability insurance (STD) would be an invaluable resource as you recover. According to the American Council of Life Insurers, nearly one-third of all Americans will suffer a serious disability between the ages of 35 and 65. Statistics like that should make short-term disability insurance a vital piece of your overall financial plan. What is STD? Short term disability (STD) pays a percentage of your salary if you become temporarily disabled, meaning that you are not able to work for a short period of time due to sickness or injury (excluding on-the-job injuries, which are covered by workers compensation insurance). A typical STD policy provides you with a portion of your weekly salary for a specified number of weeks. You receive a maximum benefit amount per month. During this initial annual enrollment offering, the short-term disability policy is "guaranteed issue," meaning you do not have to take a medical exam to prove insurability. Regardless of your health, you are guaranteed coverage. However, pre-existing conditions will not be covered for a 12-month period from the effective date of coverage. You must be actively at work on August 1, 2003 and continuously covered for that 12-month period. For example, if you are now pregnant and you become disabled on or after August 1, 2003 due to that pregnancy, this would be considered a pre-existing condition. However, if you become pregnant after August 1, 2003, and you meet the disability definition, benefits would be payable. Causes of STD claims
Pregnancy (normal):
Pregnancy (complications):
Injuries (excluding back):
Back injuries:
Digestive/Intestinal: Source: UnumProvident If you apply for disability coverage during future annual enrollment periods, you must provide medical proof to the insurance company that you are insurable. In other words, the insurance company will review your health history and decide if they will issue a policy. If you currently have a pre-existing condition, we encourage you to explore the short-term disability coverage at this time when coverage is guaranteed without looking at your medical history. There are two plans offered. One plan begins payment on the 8th day of disability. The second plan begins payment on the 15th day of disability. Benefits are payable for up to 180 days for accidental injury or sickness. Costs for the short-term disability plans are payable by the employee. Who should buy short-term disability? All eligible employees are currently covered (after a one-year waiting period) under the Prudential Long-Term Disability program (LTD). However, you must be disabled for a six-month period before benefits are payable under the LTD. Do you have enough vacation, sick time or savings to cover the six-month period you will not be drawing a salary? If you have enough in savings to last until you return to work again, you probably don't need to buy STD. However, if you do not have much in savings or any other income to fall back on if you were to become disabled, an individual STD policy may not be a bad option. The American Fidelity Assurance Company STD brochure you received includes a table, which lists the monthly disability benefit amount you are eligible to purchase, based on your monthly salary. This is the maximum amount you can purchase. However, you can buy a lesser amount of coverage if this is more affordable. For instance, if your monthly salary is $1500.00, the table reflects that you can purchase a $1000 monthly disability benefit. You can purchase less than the $1000 monthly disability benefit. Ask the benefit enroller at BBI for the amounts you are eligible to purchase below the maximums stated in your brochure. We encourage you to consider enrolling in this new benefit offering. Contact Better Benefits, Inc. at 800-933-5024 to further discuss benefit options and the associated costs. You do not need to complete an application for coverage. The Better Benefits enrollers will take your application over the telephone and advise us of the coverages you have elected and the cost. We will then contact your bookkeeper with this information to arrange for payroll deduction to begin in August. The following are terms that can be found in most short term disability (STD) policies. While many of these terms apply only to group insurance, some are also applicable to individual disability insurance policies. Active, Full-time Employee. An individual must work for the employer on a regular basis in the usual course of the employer's business to be considered an active, full-time employee and eligible for coverage. Usually, a minimum number of hours of regular work is specified. As this applies to the Diocese of Palm Beach, you must be a W-2 employee (taxes and social security deducted) and work 30 or more hours per week to be eligible for coverage. Benefit Percentage. The benefit payable amount was selected by you when you applied for your policy. Definition of Total Disability. Probably the most important provision in a disability contract is the definition of disability that will be used to determine an employee's eligibility for benefits. The definition of disability under the American Fidelity Assurance Company policy offered to Diocesan employees is: “Disability or Disabled means you are unable to perform the material and substantial duties of your Regular Occupation.” Under this definition, an insured will be considered disabled only if he or she is unable to perform the duties of his or her occupation. To assist you in comparing the American Fidelity policy and other policies, please be aware that some short-term disability policies follow a stricter disability definition. An example of said definition is:
Elimination Period. This is the period of time between the date the disability commences and the beginning of the benefit payment period. It is the period during which an employee must be disabled before payment of benefits begins. There are two plans offered to Diocesan employees. One plan begins payment on the 8th day of disability. The second plan begins payment on the 15th day of disability. Evidence of Insurability. Group disability coverage is generally sold as "guaranteed issue" which means that evidence of insurability is not required. After this initial enrollment period, if you apply for disability coverage during future annual enrollment periods, you must provide medical proof to the insurance company that you are insurable. In other words, the insurance company will review your health history and decide if they will issue a policy. If you currently have a pre-existing condition, we encourage you to explore the short-term disability coverage at this time when coverage is guaranteed without looking at your medical history. Exclusions. There are specific provisions included in group disability plans which exclude coverage in certain situations. Typically, a plan will not pay benefits for disabilities arising from war, participation in a riot, commission of a felony, or self-inflicted injury. Contact Better Benefits at (800)933-5024 for specific exclusions information on the American Fidelity policy. Limitations. There may be specific provisions included in group disability plans that limit coverage in certain situations. Often only limited benefits are payable for specific conditions or under specific circumstances. For example, the American Fidelity policy offered to you limits benefits if you are disabled due to alcoholism and drug addiction. Always check your policy’s list of exclusions and limitations. Maximum Benefit Period (Benefit Duration). This is the maximum length of time for which benefits are payable under the plan as long as the employee remains continuously disabled. The American Fidelity policy offered to you will pay benefits for up to 180 days as long as you are continuously disabled. Maximum Monthly Benefit. This is the highest dollar amount a disabled employee can receive on a monthly basis under the STD plan. Mental Illness and Substance Abuse Limitations. When a disability is caused by a psychological/behavioral/emotional disorder, or by alcoholism or the non-medical use of narcotics, sedatives, and so on, benefits are usually limited. Pre-Existing Condition Limitations. When an insured has a physical or mental condition that existed prior to the effective date of his or her insurance coverage, it is considered a pre-existing condition. Your American Fidelity policy states as follows: “Pre-Existing Condition means a disease, accidental injury, sickness, physical condition, or mental illness for which you have experienced any of the following: (a) treatment; (b) incurred expense; (c) took medication; (d) received care or services including diagnostic testing or related measures; or (e) received a diagnosis or advice from a Physician, during the 12-month period immediately before your effective date of coverage. The term Pre-Existing Condition will also include conditions which are related to such disease, accidental injury, sickness, physical condition or mental illness.” Waiver of Premium. When an individual becomes disabled and eligible for benefits, no further disability premium payments are required as long as benefits are being paid out. Waiver of Premium will begin the first of the month following your satisfaction of the Elimination Period, provided premium has been paid from the beginning of Disability to the date Waiver of Premium begins. This will continue until the end of your disability, the end of the maximum benefit period, the date you are no longer eligible to receive disability payment, the date your policy terminates, or the date your employment with the Diocese of Palm Beach ends, whichever first occurs. The insurance company will require proof that you remain disabled during that period. |
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Donise Jacques |
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