LTD Administrator's Instructions
LTD Benefits

General

Employees who apply for and are accepted for LTD benefits are entitled to receive benefits until the first of the following events:

• the date the employee is no longer disabled as defined in the Plan

• the end of the month in which employment ends

• on the date of commencement of paid absence prior to retirement

• the end of the month in which an employee attains age 65 or age 60 for maximum retirement age 60 employees

• the end of the month in which an employee dies

• two years maximum duration for Constituency Assistance to members of Legislative Assembly of BC

Note:  A benefit will not be paid while an employee is serving a prison sentence.

Definition of Total Disability

Total disability means the complete inability, because of an accident or illness, of a covered employee to perform all the duties of his/her own occupation for the first two years of disability except where accommodation has been made which enables an employee to work:

• in his/her own occupation, or
• in a job other than his/her occupation

Where accommodation has been made which enables an employee to return to work, he/she will not be considered totally disabled and the rate of pay shall be the rate for the job.

If the rate of pay for this job is less than the rate of pay of the employee at the date of disability, the employee’s salary will be protected in accordance with the relevant provision of the employees’ collective agreement, or terms and conditions of employment, at the employee’s basic rate at the date of disability.

After the first 25 months (2 years BCFC) of total disability, where accommodation has been made that enables an employee to return to a job other than his/her own occupation, the employee will not be considered totally disabled and their basic rate shall be the basic rate for the job or 75% of the basic rate of his/her own occupation, whichever is greater.

After the first 25 months (2 years BCFC) of total disability, employees able by reason of education, training or experience to perform the duties of a gainful occupation for which the rate of pay is not less than 75% of the current rate of pay of their regular occupation at the date of disability will not be considered totally disabled and will therefore not be eligible for benefits under this Long Term Disability Plan.

The effective date for determining the commencement of the first 25 months (2 years BCFC) of disability shall be:

• for an employee entitled to STIIP benefits, the day following the last payment of a benefit under the STIIP program;
• for an employee not entitled to STIIP benefits, the date on which the employee has been totally disabled for six months (six months for employees of the BC Ferry Corporation).

Total disability resulting from mental or nervous disorders are covered by the LTD Plan in the same manner as total disability resulting from accident or other sickness, except that an employee who is totally disabled as a result of a mental or nervous disorder and who has received 25 months of LTD Plan benefit payments must be confined to a hospital or mental institution or where the employee is at home the employee must be under the direct care and supervision of a medical doctor, in order to continue to be eligible for benefit payments.

During a period of total disability an employee must be under the regular and personal care of a legally qualified doctor of medicine.

Commencement of Benefits

LTD Plan Benefits commence after an employee has been totally disabled for six months (six months for employees of the BC. Ferry Corporation).  Pre 1978 sick bank credits must be exhausted prior to receiving LTD benefits.  Therefore, sick bank credits will be utilized on a day for day basis including statutory holidays based on a five day work week at the end of STIIP.

Requalification for Benefits 
(Successive Disabilities)

Employees who are considered to have fully returned to work following a period where LTD benefits have been paid are covered under the Successive Disabilities provision of the LTD Plan for six months. This six month period restarts if a subsequent absence is approved as a successive absence. Therefore, any absences following a return to work from a period where LTD benefits have been paid must be closely managed. All benefit claims for absences within the successive disabilities period must be reviewed by GWL for determination of the absence to be paid as a successive disabilities absence under LTD. If GWL determines that the absence is not a successive absence, STIIP benefits may be payable for the absence in question.

Employee has a full return to work and is off again due to a health related absence:

Within one month or less:

After working more than a month and up to six months:

After working more than six months:

As it is the carrier (GWL) who makes the determination if the absence is related to the previous absences in the successive disabilities period, ministries may not pay STIIP benefits until the determination has been made. Ministries will be advised by the Disability Management Programs Branch once GWL has made their determination.

In order to manage this process, ministries are requested to advise DMP of all absences due to illness or injury for employees covered under successive disabilities. Employees will be required to submit medical documentation to GWL to support their claim for benefits. A sample letter to be given to employees covered under successive disabilities may be downloaded for ministry use.

If GWL makes the determination that LTD benefits apply for the absence, the six month successive disabilities period starts over again. Disability Management Programs will advise ministries of the new six month successive period start date.

The Successive Disabilities provision is also applied in circumstances where:

• LTD is not payable (i.e. not eligible, declined, did not apply), however, the absence went beyond the STIIP period and fully returns to work in the LTD period.
• An employee returns to work part time during the six month STIIP period and continues to work part time beyond the STIIP period and fully returns to work in the LTD period.

Note: Vacation or any time off counts towards the qualifying periods, therefore, granting of leaves, especially during the first month after fully returning to work, should be closely managed.

Administrative Procedures:

• Benefit Administration Procedure

• Advise Disability Management Programs of all absences due to illness or injury in the successive period.

• Forward Medical documentation to Disability Management Programs for submission to Plan Carrier (to determine entitlement for LTD benefit).

• Disability Management Programs will advise of the Plan Carrier decision with further direction regarding eligibility for STIIP benefits.

• Sample Letter

Amount of Benefits

Where an employee’s illness or injury extends beyond the STIIP period, the provisions of the LTD Plan will apply. Therefore, any other portion of their collective agreement or terms and conditions of employment do not apply. For example, there is no entitlement for vacation leave; work hours and scheduling are considered seven hours per day, five days per week, except for regular part-time.

LTD benefits are paid by direct deposit at the end of the month by the Plan Carrier for the month of benefit, unless an employee is working on a trial basis. Where an employee is working on a return to work trial, the rehab earnings are reported by the ministry Pay Office at the end of each month to the Disability Management Programs. Disability Management Programs will calculate the percentage of residual LTD benefits to be paid by the Plan Carrier. Any outstanding LTD benefit is paid within five working days of when the rehab earnings are reported.

LTD benefits are based on the basic salary in effect for the last month of STIIP, taking into consideration any adjustments retroactive to the last day of STIIP and is referred to as "basic monthly earnings". Adds to pay such as salary protection, IT temporary market adjustment and classification adjustment are considered monthly earnings.

The amount of the LTD benefit may change over time through negotiated increases. Refer to the specific collective agreements and terms and conditions of employment. The current benefit level can be confirmed by calling Disability Management Programs.

The monthly LTD benefit payable by Plan Type as described in Schedule A LTD Plan Regulation 409/97, is as follows:

Management/Excluded employees (except BC Ferry Corporation) are covered by LTD Plan A with a benefit formula of:

• 70% of the first $2,600 of basic monthly earnings; and
• 50% of basic monthly earnings above $2,600

Example:

Management/Excluded of BC Ferry Corporation are covered by LTD Plan D with a benefit formula of:

• 68.3% for the first $2,400 of basic monthly earnings
• 50% of basic monthly earnings over $2,400.

Union employees B are covered by LTD Plan Type B with a benefit formula of:

• 70% of the first $2,300 of basic monthly earnings; and

• 50% of monthly earnings above $2,300.

BC Ferries Corporation union employees are covered by LTD Plan E with a benefit formula of:

• 68.3% of the first $2,200 of basic monthly earnings; and
• 50% of monthly earnings above

Constituency Assistants are covered by LTD Plan H with a benefit formula of:

• 68.3% of the first $2,500
• 50% of monthly earnings above $2,500

JJP are covered by LTD Plan I with a benefit formula of:

• 68.3% of the first $2,500
• 50% of monthly earnings above $2,500

Judges are covered by LTD Plan J with a benefit formula of:

• 70% of gross earnings

Integration with other Disability Income Plans

LTD Plan benefits are reduced by 100% of other disability income payable to a disabled employee.

Advise Disability Management Programs Branch (DMP) of any payments received from personal insurance coverage (or any other monies) in relation to the present disability.

Definition of Disability Income

Types of disability income that are integrated with LTD benefits shall include, but not limited, to the following:

• Any amount payable under any Workers' Compensation Act or Law or any other legislation of similar purpose; and

• Any amount payable from any group insurance or wage continuation plan of the Employer that provides disability or retirement income; and

• Any amount of disability income provided by any compulsory act or law; and

• Any periodic primary benefit payment from the Canada or Quebec Pension Plans or other similar social security plan of any country to which the disabled employee is entitled or to which they would be entitled if their application for such benefit were approved; and

• Any amount of disability income payable by any group or association disability plan to which the disabled employee might belong or subscribe

Note: LTD benefits are not integrated with a war disability pension paid under an Act of the Government of Canada or other Commonwealth country (World War II: September 2, 1939 to June 30, 1947; Korean Conflict: August 7, 1950 to July 27, 1953).

Any increases in such other disability income resulting from increases in the Canadian Consumer Price Index, or similar indexing arrangements, will not further reduce Plan benefits.

Personal Insurance Disability Income Benefits 
(Personal Insurance Coverage):

Personal insurance disability income is integrated with LTD benefits when the combination of Plan benefits and personal insurance disability income benefits exceed 100% of basic monthly salary.

Association Income Replacement Plans 

The following Association Income Replacement Plans are treated as "personal insurance coverage"

• The B.C. Nurses' Union Income Replacement Plan.

• The Union of Psychiatric Nurses' Income Replacement Plan.

• The Canadian Physiotherapy Association's Income Replacement Plan.

• The Association Income Replacement Plan for members of the Canada Bar Association.

• The Insurance Corporation of British Columbia (ICBC) Income Replacement.  Income replacement paid by ICBC is treated as "personal insurance coverage".

BC Benefits (Income Assistance) Act

• LTD benefits are reduced by the amount of BC benefits received for the same period. LTD benefits will not be reduced if the income support received for that period are repaid to BC Benefits. If an employee’s STIIP benefits have ceased and the ministry is aware that the employee has applied for or is receiving income support, advise the Disability Management Programs.

Deductions from LTD Plan Benefits

Income Tax

The monthly LTD benefit is taxable for income tax purposes.  Other deductions include the premium for optional spouse and dependent coverage, if elected, as well as CPP and other disability income, if received.

Other Employee Benefits while on LTD Benefits

An employee utilizing sick bank credits (on a day for a day basis), during their LTD claim, will be covered for group benefits by their Employer until sick bank credits are exhausted.

An employee accepted for benefits under the LTD Plan (after sick bank credits have been exhausted, if any) will be covered for the following :

Public Service Pension Plan

Pensionable service will continue to be credited under the Public Service Pension Plan as long as the employee is accepted under the LTD Plan, up to maximum retirement age. Employee contributions are not required.

Group Benefit Plans

Coverage will continue under the following benefits and premiums will be paid by the LTD Plan:

• Basic Medical Plan (premiums paid are a taxable benefit)

• Extended Health Care and Dental Plans

• Group Life Insurance Plan (premiums paid will be a taxable benefit)

• Exception - The premium for the Optional Spouse and Dependent coverage under the Group Life Insurance Plan will be deducted from the LTD Plan payment.

Administrative Procedures:

Disability Management Programs Branch will process the transfer of group numbers to the LTD Plan after the employee has been accepted by the LTD Plan carrier.

Note: Employees accepted for LTD Plan benefits do not accrue seniority or earn vacation credits. However, seniority accrued up to the last day of STIIP will be retained if the employee returns to work within six months following termination of LTD benefits.

Workers' Compensation Board Claims

Regular Employees on claims recognized by the Workers’ Compensation Board and covered under the LTD Plan may be eligible to apply for LTD Benefits. Refer to STIIP WCB Benefits of this manual for additional WCB information. The same procedures are followed for applying for LTD as employees on non-WCB claims.

Integration of WCB/LTD

The amount of the WCB benefit is deducted from the LTD benefit. Usually the WCB benefit is greater than the LTD benefit and no benefit would be payable by the Plan Carrier. However, after the employee is accepted under the LTD Plan, the LTD Plan will continue the coverage for Dental and Extended Health Care Plans, Group Life Insurance, Basic Medical Plan and pensionable service.

Employees not accepted for LTD benefits may be processed as leave of absence to continue other benefits. In this case, employees are required to pay the full cost of employee and employer premiums in order to continue the Extended Health Care and Dental Plans, Group Life Insurance Plan and the Basic Medical Plan. As well, employees must pay the cost of Public Service Pension Plan contributions to continue pensionable service.

Integration of WCB/LTD/Sick Bank

Employees with sick bank credits remaining at the end of the 26-week WCB period, and accepted under the LTD Plan will utilize sick bank credits on a day for day basis in the same manner as employees absent on non-WCB claims. During use of the sick bank credits, WCB continues to pay the employer and the employee continues to receive 100% pay. When the sick bank is exhausted the pay office must advise WCB to pay the employee directly.