Page 130 - Group Insurance and Retirement Benefit IC 83 E- Book

STD and Major Medical Plans

Today, some employers are including STD benefits as a standard part of employee health

plans, right along with major medical expense coverage‘s. Other employers offer STD
coverage separately as an option the employee may choose or not. In whatever form,

many employers offer STD benefits at every income and occupational level within their
companies. As you will see in the next section, long-term disability benefits may be

offered differently.

Long-Term Disability (LTD) Plans

After the short-term disability benefit period ends, many group plans provide long-term
disability benefits when the employee is still disabled. However, LTD benefits, unlike

STD, are sometimes made available only to higher-income, usually salaried, personnel
rather than to both salaried and hourly employees. For example, the LTD plan might be

available only for employees earning $30,000 or more annually. There are two reasons
for this. First, lower-income earners are often covered adequately by social insurance

programs. Second, because insurance company experience shows that lower-income and

hourly employees as a group incur greater claim costs, the risk is less desirable from the
insurer's point of view.

Probationary Period

Different LTD and STD plans might have probationary periods as short as three months

before the employee is eligible to enroll. On the other hand, some LTD group policies

require an employee to be continuously employed for as long as one year before
becoming eligible.

Some LTD plans also require the employee to be actively at work for a specified period-
30 days, typically-without illness or injury in order to enroll. For example, suppose the

three-month required probationary period has passed for a certain employee, but the
employee has been ill for the final four days of the last month of the probationary period.