Is Your Employer Providing the LTD Benefits You Think You Have?
When you enroll for Group Benefits at your workplace, if you are being provided with LTD Benefits (Long Term Disability Benefits), you should make sure that you check that you have the amount of coverage you think you have.
LTD Benefits Could Be Limited
By way of an example, take the following situation.
Jane works as an administrative assistant in a professional office. When she started working, she was given forms to fill out to enroll in the Group Benefits, including LTD benefits. Jane’s salary is $45,000.00 and she understands that her LTD benefits are supposed to be based on 60% of her salary, or $2,250.00 per month.
What she doesn’t know or understand is that her LTD benefits are subject to a “Non-Evidence Limit” of $1,250.00 per month. This means that unless Jane completed some additional forms, which includes some medical questions, her LTD coverage would be limited to $1,250 per month, even though 60% of her salary is $2,250.00 per month.
Apply For Coverage Using Necessary Forms
Often employers aren’t made aware of this requirement either, or they may forget to provide the necessary forms to allow people to obtain the higher coverage. Assuming Jane had no prior health problems, it is very likely that she would have been able to obtain the extra coverage. If the failure to apply for this coverage was because she ignored the form (or didn’t bother with it) even though she was provided with this option, then the problem is Janes.
If, however, her employer failed to provide her with this information, the employer may be liable for the difference between the non-evidence limit and the coverage up to the 60% mark.
Now if Jane simply didn’t want to apply for this coverage, or forgot to, it creates a situation that may result in her LTD benefits being worth almost nothing. Depending on Jane’s contributions into the Canada Pension Plan, if she becomes disabled, the policy would require her to claim for CPP-D benefits, which could be as high as approximately $1,300. As most policies provide for a direct offset for CPP-D, if Jane was entitled to receive $1,300 from CPP-D, she would be entitled to receive nothing from her LTD insurance policy.
Check The Fine Print
To sum up, if you are an employee with LTD benefits, check the fine print to make sure you have the coverage you think you have. If you are an employer or a broker, make sure you are properly administering the plan for your employees so that you don’t end up having to make up the difference.
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