Noncontributory Long-term Disability Insurance

What is Noncontributory Long-term Disability (LTD)?

Noncontributory Long-term Disability insurance is an employer-sponsored benefit that covers a portion of your income if you need to miss work due to injury or sickness.

What will my company be charged when offering Noncontributory Long-term Disability (LTD)?

When offering Noncontributory Long-term Disability (LTD) through Justworks, the employer will only pay the monthly premiums. There are no other fees associated.

The employer will be charged premiums on the second semi-monthly payroll.

How do I enroll in Noncontributory Long-term Disability?

All benefit-eligible employees are automatically enrolled in the Noncontributory short-term disability benefit. You can reference your enrollment and plan document anytime through your Justworks account. Select the Benefits > Ancillary Benefits section of your Justworks account, then scroll to the “Long-term Disability (LTD)” Insurance icon.

Who in my company would be eligible to enroll?

Eligible members would be:

• Full-Time Employees
• Part-Time Employees (must be working 30+ hours and benefits-eligible)
• Both Paid and Unpaid* Owners
  • Unpaid Owners:
    • Premiums: Employers are automatically charged the maximum premium amount for an unpaid owner's policy
    • Claim Payout: Unpaid owners will be given the maximum available payout in cases of a claim

Is Noncontributory Long-term Disability (LTD) coverage restricted in some states?

Currently, there are no state restrictions.

What income covered by LTD?

Only Basic earnings and commissions are included in the calculation of the benefit payment. The benefit payment does not include, but is not limited to:

• Grants, award, conversion, and/or exercise of shares of stock
• Employer 401k match
• Any other compensation from your employer

How much income is covered by LTD?

Depending on your employer’s policy, the long-term disability insurance will cover a different percentage and maximum of your monthly earnings. Please check your plan by going to Benefits > Ancillary Benefits > “View plan” in the LTD insurance icon.

How long is the elimination period?

The long-term disability insurance policy has a 180-day elimination period. This means that you must have been disabled and unable to work for a minimum of 180 days, or have finished the maximum allowed duration of your short-term disability benefits before MetLife will issue any long-term disability benefit payment on an approved claim.

Benefit Duration

If you are under the age of 60, the maximum LTD benefit duration it up to age 65. If you are over the age of 60, your maximum LTD benefit duration will follow the below table:

*Please note: the duration listed above does not guarantee a claim will be approved for the listed duration.

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.

Policy termination

If your employment ends or your employer ceases to offer the benefit, your noncontributory long-term disability coverage will end on the last day of that month.

Disclaimer

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.