Group Disability Insurance
No one plans to be disabled. But accidents and illnesses do happen, and they may confine someone to bed for weeks…or longer. When this option is added to your Group Benefit Plan, it could help replace part of the lost income of a disabled employee and thus allow him to focus on what’s most important – getting better and returning to work soon.
Employers that provide a Short-Term Disability plan may opt out of the Employment Insurance Sickness Benefit and therefore qualify for a reduced E.I. premium rate. To be eligible to opt out, the STD plan must be at least equal to or better than the E.I. plan.
• Group short term disability insurance (STD), aka Weekly Indemnity.
Elimination Period (when do the payments start)/ Benefit Period (for how long):
Typically, STD plans provide coverage on the first day following an accident or hospitalization and the 8th or 15th day of absence as a result of sickness. However, the elimination period for accident or hospitalization could be as long as 15 days. and most plans provide benefits from up to 15 or 26 weeks of disability.For employees whose work hours are reduced because of a disability, partial disability benefits can help bridge the income gap until they return to full capacity.
Benefit Schedule/ Tax implications
The benefit schedule is generally based on a percentage (67% to 75%) of the employee's pre-disability weekly gross earnings. Unless the plan member is paying the entire STD premium, the benefit will be taxable when received. The STD benefit will also be non-taxable when the employer pays the premium on behalf of an employee, but the amount of the paid premium is treated as taxable income to the employee.
• Group Long Term Disability insurance (LTD)
A serious disability takes away more than an individual’s earnings – it can take away their sense of control over their own life. We, at IN STEP INSURANCE SERVICES, believe disability insurance, either as part of a group plan or on an individual basis, should be an important element of one’s insurance program, thus providing the support and assistance necessary to help the individual return to a healthy and productive life.
Elimination Period/ Benefit Period.
The most common elimination period is 17 weeks so that the LTD benefit integrates with the Employment Insurance (EI) plan, or from 30 to 180 days of disability.
The most common benefit period is to age 65. However, benefit periods of two and five years are not uncommon. The longer the benefit period, the higher the premium.
Because of the limited space, the above is a summary description of all the parts that make up a well designed group benefit plan.
For more information, please contact us. There is no obligation on your part. Ask us for quotations and we will be happy to request them for you, from our benefit suppliers.
Please remember that our loyalty lies with you, the client, and not with any particular insurance company.
