How the Plan Works

How the Plan Works

In general, the plan works as follows:

• You become disabled from an injury or sickness while covered by this plan that is expected to continue longer than 52 weeks. No benefits are payable during the elimination period. 
• You file a claim for LTD benefits with Lincoln Financial. (If you are enrolled in the short term disability (STD) plan and receiving STD benefits for a disability that is expected to continue beyond 52 weeks, Lincoln Financial will contact you to complete additional forms or provide necessary information to process your LTD claim.) 
• Lincoln Financial will determine if you are eligible for a monthly LTD benefit.
• If Lincoln Financial approves your claim, you will receive a monthly LTD benefit following the 52-week elimination period.
• You will receive the monthly LTD benefit until the earliest of the events described in When Benefits Begin and End.

The following information provides details about how and when your benefits are paid.

Elimination Period

The elimination period is the amount of time you have to wait before LTD benefits are payable. In this plan, the elimination period is 52 weeks starting from the first day of your disability. This means that no benefits are payable during that 52-week period, i.e., your first LTD benefit is not retroactive to your date of disability. If you are enrolled in the short term disability plan, STD benefits can help bridge the gap during the LTD elimination period.  

Definition of Disability

During the elimination period and the next 24 months, "disability" or "disabled" means that due to an injury or sickness, you are unable to perform the substantial and material duties of your OWN occupation. The injury or sickness must begin while you are covered by this plan.

Thereafter, "disability" or "disabled" means that due to the same injury or sickness, you are unable to perform the substantial and material duties of ANY occupation based on your age, education, training, experience, station in life, and physical and mental capacity. 

If you are able to return to work, you may be considered partially disabled. "Partially disabled" means that due to your disability, you are unable to earn 80% or more of your basic monthly while working in your own or another occupation. You may be partially disabled during the elimination period, although benefits are not payable during that time.

The loss of a professional or occupational license or certification does not, in itself, constitute disability.

Lincoln Financial may require you to receive examinations at any time to determine your disability status. If requested, Lincoln Financial will pay the expense of examinations.

These terms are important for defining disabilty under this plan:

• Material and substantial duties means duties that are normally required for the performance of your own occupation and cannot be reasonably omitted or modified.
• Own occupation means the occupation you are performing when your disability begins.
• Sickness means illness, disease, pregnancy, or complications of pregnancy. Disability must begin while you are covered under the plan.
• Injury means a bodily impairment resulting directly from an accident and not related to any other cause. Disability must begin while you are covered under the plan. An injury will be considered a sickness if:
  • A disability begins more than 60 days after an injury, or
  • An injury occurs before you are covered under the plan. 
• Indexed monthly earnings means your basic monthly earnings in effect just prior to the date of disability as adjusted on the first anniversary of benefit payments and each anniversary thereafter. Your monthly earnings will be adjusted on that date by the current annual percentage increase in the Consumer Price Index. Indexing is only used to determine your percentage of lost earnings while you are disabled and working. 
• Physician means a person who:
  • Is licensed to practice medicine and is practicing within the terms of his or her license, or 
  • Is a licensed practitioner of the healing arts in a category specifically favored under the health insurance laws of the governing jurisdiction and is practicing within the terms of his or her license.

A physician does not include you, any family member, or domestic partner. 

Amount of Benefit

Your benefit amount depends on several factors, including whether you are working or not. If you have a partial month of disability, your benefit will be prorated at the rate of 1/30th for each day of disability. 

Amount of Benefit If You Are Disabled and Not Working

If you are disabled, you may be eligible to receive monthly payments under this plan equal to 65% of your basic monthly earnings as defined below, subject to a maximum monthly benefit of $17,500. The minimum monthly benefit is $50 and in no event will you receive less than $50 per month.

1. Multiply your basic monthly earnings by 65%.
2. The maximum monthly benefit is $17,500.
3. Compare the answer in item 1 with the maximum monthly benefit. The lesser of these two amounts is your gross disability payment.
4. Subtract any deductible sources of income from your gross disability payment. This is your monthly payment.

For purposes of determining plan benefits, basic monthly earnings means:

• For Field Sales Representatives: Basic monthly earnings means gross monthly base pay (i.e., your pay before 401(k) and Section 125 payroll deductions are calculated) in effect on the day just before your disability begins. Monthly earnings also include the average monthly amount of bonuses and/or commissions received during the 12-month period preceding the disability, but does not include overtime pay and any extra compensation. If you have less than one year of service, your monthly amount of bonuses and/or commissions will be averaged over all your months of employment as a Field Sales Representative with the company.
• For all employees other than Field Sales Representatives: Basic monthly earnings means gross monthly base pay (i.e., your pay before 401(k) and Section 125 payroll deductions are calculated) in effect on the day before your disability begins. Monthly earnings include base pay and bonuses in the preceding 12 months, but does not include overtime pay and any extra compensation.
• During a Covered Layoff or Leave of Absence: If you become disabled while you are on a covered layoff or leave of absence, your monthly earnings in effect just prior to the date your absence begins will be used.

Amount of Benefit if You Are Disabled and Are Working

A partial disability benefit may be payable if you are able to work in your own or another occupation and due to injury or sickness are earning less than 80% of your basic monthly earnings. Your partial disability benefit will be calculated as shown below.

First 12 months 

During the first 12 months of payments, while working, your monthly payment will not be reduced as long as disability earnings plus the gross monthly benefit does not exceed 100% of your basic monthly earnings. If the combined total is more, your monthly payment will be reduced by the amount over 100%.

After 12 months

After 12 months of payments, while working, you will receive payments based on the percentage of income you are losing due to your disability:

1. Subtract the monthly earnings you receive while partially disabled from your basic monthly earnings. This is your amount of lost earnings.
2. Divide the answer in item 1 by your basic monthly earnings. 
3. Add the amount of your regular monthly benefit (before any reductions) to the monthly earnings you receive while partially disabled, then multiply that figure by the answer in item 2. This is the amount you will receive each month. 

On the first anniversary of benefit payments and each anniversary thereafter, your basic monthly earnings will be increased by the current annual percentage increase in the Consumer Price Index. Your basic monthly earnings will then be referred to as "indexed basic monthly earnings".

If your earnings from partial disability are expected to fluctuate widely from month to month, the plan administrator may average your disability earnings over the most recent 3 months to determine if your claim should continue subject to all other terms and conditions in the plan.

Salary continuance paid to supplement your disability earnings will not be considered payment for work performed.

When Benefits Begin and End

Benefits will begin after you have been continuously disabled for 52 weeks. This 52-week period is called the elimination period.

If your disability stops for 30 calendar days or less during the elimination period, and then you become disabled again due to the same or related condition, the disability will be considered continuous. The elimination period will be extended by the number of days you were not disabled. If your disability stops for 31 calendar days or more, you must satisfy a new elimination period even if the two disabilities are related.

Benefit payments will continue until the earliest of the following circumstances:

• The date you unreasonably refuse to be examined or evaluated at reasonable intervals.
• The date your current partial disability earnings exceed 80% of your basic monthly earnings. 
• The date you are no longer disabled under the terms of this plan. 
• The end of the maximum benefit period as described below .
• The date you die.

Maximum Benefit Period 

The maximum benefit period is the longest period of time the plan will make payments to you for any one period of disability. The length of this period depends on your age on the date of your disability.

*Your normal retirement age is your retirement age under the Social Security Act where retirement age depends on your year of birth.

Mental Illness and/or Substance Abuse

Mental illness means a psychiatric or psychological condition regardless of cause. Mental illness includes but is not limited to schizophrenia, depression, manic depressive or bipolar illness, anxiety, somatization, substance related disorders and/or adjustment disorders or other conditions.

The LTD benefit for disabilities which are due to mental illness and/or substance abuse is limited to 24 months, unless you meet one or both of these conditions:

1. If you are confined to a hospital or institution at the end of the 24-month period, you will continue receive payments during your confinement. 
2. If you are not confined in a hospital or institution at the end of the 24-month period for which you have received payments, but you are fully participating in an extended treatment plan approved by your physician for the condition that caused your disability, you will receive payments for an additional 12 months, for a combined period of 36 months.

You will not receive payments beyond the limited pay period as indicated above, or the maximum period of payment, whichever occurs first.

Successive Periods of Disability

Successive periods of disability means a disability which is related or due to the same cause as a prior disability for which you received an LTD benefit. 

A successive period of disability will be treated as part of your prior claim (and you will not have to complete another elimination period) if, after receiving LTD benefits under this plan, you return to your own occupation for less than six continuous months and perform all the substantial and material duties of your own occupation.  

To qualify, you must experience more than a 20% loss of basic monthly earnings. Benefit payments will be subject to the terms of this plan for the prior disability.

Any disability which occurs after six months from the date your prior claim ended will be treated as a new claim, with a new elimination period. The new claim will be subject to all of the plan provisions.

If you become covered under any other group long term disability plan, this successive periods of disability provision will not apply.

Deductible Sources of Income

Your disability payments will be reduced by other deductible sources of income related to your disability and other sources of income that begin while you are disabled. The minimum monthly payment is $50.00. So if subtracting deductible sources of income results in a zero benefit, your payment will still be $50.00.

The following deductible sources of income will be deducted from your gross disability payment:

• The amount that you receive as loss of time benefits under a workers’ compensation law, an occupational disease law, Title 46 (The Jones Act), any governmental compulsory benefit act or law, or any other act or law of like intent.
• The amount of disability retirement benefits that you receive in compensation for the same disability and loss of income covered under this plan.
• The amount that you, your spouse and children receive as loss of income disability payments because of your disability under the United States Social Security Act, the Railroad Retirement Act, the Canada Pension Plan, the Quebec Pension Plan, or any similar plan or act.
• The amount you receive from or on behalf of a third party for loss of time benefits as a result of injury caused or contributed to by the third party. 
• The amount you receive from any sick leave or salary continuation plan.
• The amount of earnings from any form of employment you receive after your disability began.

Once the plan administrator has subtracted any deductible source of income from your gross disability payment, your payment will not be further reduced due to a cost of living increase from that source or by the amount of any increase in your Social Security income.

If the plan administrator determines that you may be eligible for benefits under state disability statutes or Social Security or other act, your payments will be reduced by an estimated benefit amount based on state disability statutes or Social Security tables. However, the plan administrator will not estimate such benefits if you apply for those benefits and sign a reimbursement agreement that states you promise to pay back any overpayment caused by a retroactive award. If your payment has been reduced by an estimated amount, your payment will be adjusted when the administrator receives proof of the amount awarded or that benefits have been denied and all appeals the administrator feels are necessary have been completed. In this case, a lump sum refund of the estimated amount will be made to you.

If you receive a lump sum payment from any deductible source of income, the lump sum will be pro-rated on a monthly basis over the time period for which the sum was given.

Overpayment of Claim

The plan administrator has the right to recover any overpayments due to fraud, any error the plan administrator makes in processing a claim, and your receipt of deductible sources of income. You must reimburse the plan administrator in full. The plan administrator will determine the method by which the repayment is to be made. The plan administrator will not recover more money than the amount paid you.