What is voluntary long-term disability (LTD)?
Voluntary LTD insurance can help you replace part of your income in the event of illness or disability. If you are unable to go back to work for either reason, you can file a claim directly with our voluntary LTD provider, MetLife, and they will pay you the replacement income directly. Voluntary LTD insurance can go into effect after you’ve been away from work for 180 days and can help you replace your income up until you are 65 years old, or even later, depending on your age or disability.
How does voluntary LTD differ from noncontributory LTD?
Voluntary LTD insurance is optional and paid for entirely by the employee. Premiums are deducted from the employee’s paychecks after-tax. As a result, claims are tax-free. Noncontributory LTD is a company-paid benefit that is automatically extended to all employees who are eligible for benefits. Premiums are paid for directly by the company and employees do not pay taxes on these premiums. As a result, if you file a claim, the payout from the claim will be considered taxable income.
Is voluntary LTD coverage restricted in some states?
There are no state restrictions.
Who can sign up for voluntary LTD?
All benefits-eligible employees at companies offering voluntary LTD can sign up. Benefits-eligible employees (Full-Time and Part-Time) are defined as employees working over 30 hours per week.
- Paid owners are eligible to enroll.
Unpaid owners are NOT eligible (unlike non-contributory LTD), because voluntary LTD premiums are collected from member’s vouchers, and unpaid owners do not have a salary (and therefore no vouchers) to collect the premiums from.
If you are eligible for this benefit, you will receive an enrollment opportunity in Justworks at the time of hire or at the time you become eligible for this benefit.
How does enrollment for voluntary LTD work?
Voluntary LTD offers two enrollment opportunities. At the time of hire or at the time you become eligible for benefits, you will have 30 days to enroll for voluntary LTD online in Justworks. If you’d like to sign up after that 30 day window has closed, you can contact our support team at 1-888-534-1711 or email@example.com, and request to do a paper enrollment.
Enrolling outside of the 30 day online window requires that a statement of health be completed and your application is subject to rejection by our provider, MetLife. If you enroll within the 30 day window, you will be automatically approved for coverage.
What will my company be charged when offering voluntary LTD?
No. When offering voluntary LTD through Justworks, the employee (member) pays the premiums.
How much does voluntary LTD cost?
The cost to you is based on your current income. If your income increases or decreases, so will your monthly cost. Your monthly cost is determined by taking your monthly benefit and multiplying it by the policy rate per $100 of covered payroll.
How is voluntary LTD billed?
Justworks bills for voluntary LTD semimonthly. Your monthly cost will be split across the first and second paycheck of the month. If you’re on a semi-monthly payroll schedule, you will have a deduction for every paycheck. If you are on a biweekly or weekly payroll schedule, you will have a deduction for 24 paychecks out of the year.
Please note, if there are 3 biweekly paydays in a given month, deductions will occur on the 1st paycheck of the month and on the 1st paycheck on/after the 15th of the month.
How did you calculate my monthly benefit?
Using the same example of a plan that provides 60% income replacement up to $5k monthly, your monthly benefit was calculated by taking your yearly salary and dividing it by 12 (for 12 months in one year), to arrive at your monthly salary. Your monthly salary was then multiplied by 60%, since the plan covers 60% of monthly income up to $5,000.00 per month. If your monthly salary multiplied by 60% was more than $5,000.00 per month, then your benefit was capped at $5,000.00 per month.
Who is your voluntary LTD provider?
Our voluntary LTD policy is provided by MetLife. Founded in 1868, MetLife is one of the largest insurance companies in the world and serves approximately 100 million customers.
Can I cancel my voluntary LTD policy at any time?
Yes, you can cancel your policy at the end of any month of coverage. To cancel your policy, please contact our support team at 1-888-534-1711 or firstname.lastname@example.org.
When will the voluntary LTD benefit terminate if an employee is no longer employed?
The voluntary LTD policy will terminate at the end of the employee's separation month.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.