Long Term Disability

About the Program

Long term disability (LTD) insurance provides income replacement during long periods of total disability resulting from illness or injury. The plan covers both occupational and non-occupational disabilities.

The LTD benefit period begins after 90 days of total disability for regular clerical and service staff, and after 180 days of total disability for all other staff and for faculty. You may attempt to return to work for up to 30 calendar days during this elimination period without having to restart your LTD waiting period.

If you are disabled and cannot work on a full-time basis, you may qualify for partial disability benefits.

Assuming you remain disabled from a disability that began before you reached age 60, your disability benefits continue until you reach age 65 or your normal retirement age under Social Security, whichever comes later. If you remain unable to work from a disability that began at age 60 or older, your LTD benefits continue in accordance with the following table:

* Benefit continues for the amount of time listed on the table or to your normal Social Security retirement age, whichever is later.

Your LTD benefit is equal to 65 percent of your annual budgeted salary, plus 65 percent of summer session earnings if you are an academic-year employee employed during the summer. This benefit is reduced by other periodic benefits you are eligible to receive during your disability.

LTD is a core benefit. If you are a regular employee eligible for benefits, your coverage automatically begins on your first date of employment with the University. However, if you are not actively at work on this date, coverage begins when you are in an active work status. 

If you become disabled within your first year of employment, and the disability is a pre-existing condition for which you were diagnosed and/or treated during the twelve months preceding your employment with the University, no benefits will be payable during the first twelve months of your employment.  In this case, you must return to active full time employment prior to being eligible for disability benefits relating to this condition. The elimination period begins at the end of the first twelve months of employment and you must satisfy the elimination period before benefits are payable. 

Purdue pays half the cost of LTD coverage. Your after-tax premium is automatically deducted from your pay.

Your LTD coverage terminates if you go on leave without pay and waive coverage during that leave, if you cease to be an eligible employee, or if the plan is discontinued. For academic-year staff, the coverage is continued during the summer, even though you may not be actively at work.

More Detail

To be considered disabled you must be unable to perform the essential duties of your occupation. You do not have to be confined to your home, but you must be under the regular care of a doctor.

Beginning 12 months after LTD benefits start, you must be unable to engage in any gainful occupation for which you are reasonably fitted by education, training, and experience. Total disability is not considered to exist if you are gainfully employed.

If your disability qualifies you to receive income replacement from the LTD program, you also qualify for these benefits:

a. Continued life insurance coverage at no cost.

b. Continued employee medical coverage at active staff rates.

c. Continued dependent medical coverage at active staff rates.

d. Qualification as an official University retiree when your disability benefits end, if your disability continued through the maximum benefit duration (see fourth paragraph above under “About the Program”) and you had at least five years of University service at the time you became disabled.      

Under current federal income tax law, LTD benefits are normally taxed in accordance with the following guidelines:

1) That portion of your benefits attributable to your own contribution (50 percent) is tax-free income.

2) You may also be eligible for a credit from your federal income tax on the amount of benefits attributable to the employer contributions.

Questions about the taxability of LTD should be directed to your tax advisor.

Exclusions

No benefit will be payable during any period of incarceration.

Benefits are not payable for any disability
due to:

1. War, declared or undeclared, or any act of war;

2. Intentionally self-inflicted injuries, while sane or insane;

3. Active participation in a riot;

4. The committing of or attempting to commit a felony or misdemeanor;

5. Cosmetic surgery unless such surgery is in connection with an injury or sickness sustained while the individual is a covered person.