Understanding group life and disability insurance

Your company’s annual “open enrollment” period is your opportunity to enroll in or make changes to your group life insurance, disability insurance and other workforce benefits. You may typically choose one of the following options:

• Elect new coverage
• Increase existing coverage
• Waive existing coverage
• Maintain current level of coverage

Open enrollment is a good time to evaluate your benefits and decide what coverage is needed. In many cases, you won’t need to make any changes if you’re content with your current choices. But if your situation has changed, make sure your workforce benefits are appropriate to protect you and your loved ones.

After open enrollment ends, you may be allowed to make changes to your benefits after a “qualifying life event” (sometimes called a “change in family status”). Examples include the birth of a child, marriage, divorce, and change to full-time employment status. Contact your employer or review your certificate of coverage to determine if and what changes can be made after a qualifying life event.

No. Group short-term disability (STD) and long-term disability (LTD) insurance provide coverage for employees only. STD and LTD provide partial income replacement if you become disabled and unable to work for a period of time. As such, it is only available for employees and not for employee spouses or other dependents.

No. STD and LTD benefit payments can be used for anything you need, such as mortgage payments, credit cards, daily expenses—or even vacations. There are no restrictions on how you spend payments.

Yes. STD and LTD insurance do not take the place of or affect any requirements for workers’ compensation coverage.

LTD benefits are payable for covered disabilities whether or not you are disabled from an occupational sickness or injury and are eligible for workers’ compensation benefits. However, any LTD benefit payable would be offset with (i.e., reduced by) any workers’ compensation benefit payable for the disability.

STD coverage is typically not payable if your disability is caused or contributed to by an injury or sickness for which you are entitled to benefits under workers’ compensation. However, some STD policies do not contain this exclusion, in which case any STD benefits payable would be offset with (i.e., reduced by) any workers’ compensation benefit payable for the disability.

These differences highlight the need for you to fully understand the terms and conditions of your coverage, including any exclusions, limitations, reductions and termination provisions.

Yes. STD insurance includes coverage for disabilities resulting from complications of pregnancy and recovery after childbirth that prevent you from working and result in a loss of earnings. STD plans typically provide disability benefits for six to eight weeks, depending on the type of childbirth.

LTD benefits may be utilized after STD benefits expire if you require a longer recovery period and are unable to work. Each group STD and LTD plan is different, so refer to your employer’s policies or ask your HR department for details. Coverage may be subject to limitations, reductions, termination provisions and exclusions, including a preexisting condition exclusion.

Even if your state offers Paid Family and Medical Leave (PFML) Benefits, enrolling in STD and LTD insurance through your employer may be a smart idea. PFML provides income replacement for a set number of weeks in a benefit year. If you exhaust PFML benefits but remain disabled, STD and LTD can provide the financial protection you may still need. STD can also supplement PFML benefits and provide partial income replacement before LTD benefits begin.

Talk to your HR department about the benefits that are available to you. Ask about Family Medical Leave Act (FMLA) job protection and determine if you are eligible. When possible, talk to your health care provider about your anticipated leave duration so you can inform your employer.

That depends on you and your family and financial situation. Life insurance is a key element of financial planning that helps you protect your loved ones from the financial impact of your premature death. Supplemental life insurance allows you to increase your individual protection, generally at no additional cost to your employer.

Group life insurance coverage can typically be continued through conversion or portability.

• Conversion allows you to continue coverage for yourself, your spouse and any covered dependents by converting your group policy to an individual policy. You can typically maintain your current level of coverage without additional health questions or medical exams.
• Portability allows you to continue your coverage for yourself, your spouse and any covered dependents when you leave your employer if you have not yet reached a certain age (typically Social Security Normal Retirement Age), are not entering active military service, and are not eligible for coverage under any other group life insurance policy. You can typically continue up to a certain level of coverage without additional health questions or medical exams. This temporary coverage offers a lower-cost option than converting to a permanent policy.

Disability coverage can be continued through conversion. If included in the group long-term disability (LTD) policy, LTD conversion allows you to convert your coverage to an individual LTD policy if you are under age 70, have been covered under the policy for 12 or more months, and your coverage terminates for reasons other than retirement or disability (such as due to your resignation, termination for cause, layoff or leave of absence).

Portability and conversion must be applied for within a specified timeframe (typically 31 days following termination of coverage) and may be subject to exclusions, limitations, reductions, and termination provisions.