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Long Term Disability

About the Program

Long term disability premium cost

This plan is administered by Cigna.

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

The LTD benefit period begins after a 90 calendar-day elimination period for regular clerical and service staff, and after a 180 calendar-day elimination period for all other staff and for faculty.

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 your normal retirement age under Social Security. 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:

Age at Disability Benefit Duration *
60 60 months
61 48 months
62 42 months
63 36 months
64 30 months
65 24 months
66 21 months
67 18 months
68 15 months
69 & beyond 12 months

* 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 the most recent summer session earnings if you are an academic-year employee employed during the summer. This benefit is reduced by other benefits you are eligible to receive during your disability.

If you are a regular employee eligible for benefits, your LTD 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.

For academic-year staff, the coverage is continued during the summer, even though you may not be actively at work.

Cost

Purdue pays half the cost of LTD coverage. Your after-tax premium is automatically deducted from your pay. Your benefit is based on your current pay, so your premium for the coverage changes as your budgeted salary changes. The annual premium is established by taking your annual basic budgeted salary times .0029. So for example, if your annual salary is $30,000, your annual cost for LTD would be $87 ($30,000 x .0029). This amount, divided by the number of pay periods, gives you the amount per paycheck that would be deducted for LTD coverage.

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 would be considered disabled if you are 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 may also qualify for these benefits:

  • Continued employee and dependent medical coverage at employee premiums until you become eligible for Medicare or for a maximum of three years after you become disabled whichever comes first.
  • You have the option to continue your term life insurance by making arrangements directly with Minnesota Life.
  • 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 in a benefits-eligible position at the time you became disabled.

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

  • That portion of your benefits attributable to your own contribution (50 percent) is tax-free income.
  • 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 benefits are payable for any period of disability during which the employee is incarcerated in a penal or corrections institution.

Benefits are not payable for any disability that results, directly or indirectly, from:

  • Suicide, attempted suicide, or self-inflicted injury while sane or insane;
  • War or any act of war, whether or not declared;
  • Active participation in a riot;
  • Commission of a felony;
  • Any cosmetic surgery or surgical procedure that is not medically necessary. Medically necessary means the surgical procedure is
    • prescribed by a physician as required treatment of the injury or sickness; and
    • appropriate according to conventional medical practice for the injury or sickness in the locality in which the surgery is performed. (Benefits will be payable if the disability is caused by the employee donating an organ in a non-experimental organ transplant procedure.)
  • The revocation, restriction, or non-renewal of your license, permit, or certification necessary to perform the duties of your occupation unless due solely to injury or sickness otherwise covered by the plan.

Need more help?

  • Call Human Resources at 765-494-1691.
  • Contact CIGNA directly at 800-362-4462 to start a claim.