2012 Benefit Enrollment Guide - Education Management Corporation

Long-Term Disability
Long-term disability (LTD) coverage can be an important
benefit for you to choose. Many people think that Social
Security benefits will cover their needs if they become disabled.
The reality is that Social Security pays only a portion of your
income, and the rules for qualifying are strict. Consider what
would happen financially if you became disabled and could no
longer work due to a non-occupational injury or illness. It’s likely
that it would be a financial challenge to replace enough income
to meet your monthly expenses.
Only full-time employees may elect long-term disability insurance.
You must be absent from work for 60 calendar days before
you are eligible to receive benefits under the LTD plan. This is
called an “elimination period.” You may elect one of the
following options:
Option 1…. 50% of Annual Salary
Option 2…. 66 2 ⁄3% of Annual Salary
Option 3…. Waive Coverage
LTD: What you need to know
• The maximum monthly benefit is $10,000. For purposes of
calculating your LTD benefit amount, annual salary is defined
as current base salary plus any bonus paid the previous
calendar year.
• You pay the entire premium for LTD coverage. Your premiums
will be deducted from your paycheck on an after-tax basis.
• New employees who elect LTD insurance are guaranteed
coverage at either the 50% or 66 2 ⁄3% level.
• Employees who move from a non-full-time status to a
full-time status will be treated as a new employee for
guaranteed coverage.
• Existing full-time employees may request to enroll in or
increase their existing level of coverage during Open
Enrollment or as the result of a qualifying change of status
event (if the request is consistent with the event). However,
in either case, an Evidence of Insurability form must be
completed and your request will be subject to the carrier’s
approval. Your current level of coverage will be maintained
while your request is processed.
See “Evidence of Insurability: How does it work?” on
page 22 for information about completing the Evidence
of Insurability form.
• Benefits decrease if your income from other sources
increases — LTD benefit payments will be decreased by the
amount of income you receive from other sources, such as
Social Security and Workers’ Compensation. The LTD benefit
payments you receive will not be considered taxable income
since you pay the entire premium with after-tax dollars.
• Pre-existing condition exclusion — If you have received
medical treatment (including consulting with a doctor, taking
medicine or having diagnostic work done) at any time during
the three months before the date you become covered under
this plan, you have a pre-existing condition as defined under
the terms of the LTD policy. If you suffer a disability in the
first 12 months of coverage and the disability is caused
by a pre-existing condition, no benefits will be payable for
that disability.
• When coverage ends — If you terminate employment or
cease to be a full-time employee, you will no longer be
eligible to participate in the LTD plan. Your coverage will
end as of the date you are no longer eligible to participate.
Portability options are not available under the LTD plan.
26 Questions? Contact HR One Connect at 1.888.471.3362 (1.888.HR1.EDMC).