Key Changes to Long-term Disability Benefits – Effective Jan. 1, 2024

TSEA October 2, 2023 Comments Off on Key Changes to Long-term Disability Benefits – Effective Jan. 1, 2024
Key Changes to Long-term Disability Benefits – Effective Jan. 1, 2024

Benefits Administration recently provided TSEA with the information below about your long-term disability benefit options for next year:

Reminder annual enrollment is underway:
Annual Enrollment for state employees is Oct. 1 – Oct. 13, 2023
Annual Enrollment for retirees is Oct. 1 – Oct. 27, 2023

From Benefits Administration:

The state will fully fund long-term disability insurance option 3 for eligible central state government and state higher education employees, effective Jan. 1, 2024.

All eligible employees will be defaulted into LTD Option 3 in Edison. This means employees will not have to take action to enroll themselves in LTD Option 3.

Will employees still be able to select LTD options 1, 2 or 4? Yes. However, during the Edison enrollment process, employees will see that LTD options 1, 2 and 4 have costs greater than $0.00. Further, if employees still select LTD option 1, 2 or 4, Benefits Administration will follow up with those who made this type of selection and confirm that was their intention.

This coverage is guaranteed issue, meaning employees will not have to answer medical questions to demonstrate their evidence of insurability.

Because coverage is fully paid for by the state, this coverage cannot be waived by central state government or state higher education employees.

What about those currently out of work on an LTD claim? For both central state government and state higher education employees that are currently on an LTD claim, those members will continue on that claim and will not be enrolled in LTD Option 3. Should an eligible employee recover from their disability and return to actively at work status, they will then be automatically enrolled in the LTD Option 3 plan.

For both central state government and state higher education employees, time spent in the LTD benefit that they may be currently enrolled in will count toward the state’s LTD Option 3 pre-existing condition exclusion.

What is the pre-existing condition exclusion? Those enrolled will not receive benefit payments if a disability results from a pre-existing condition if the employee has been actively at work for less than 12 consecutive months. Pre-existing condition is defined as a sickness or injury where a member received medical treatment, consultation, care or services; or took prescribed medication or had medications prescribed.

Because the premiums will be fully paid by the state, LTD Option 3 payments will be taxable and subject to withholding of federal taxes. The employer and employee are both responsible for their share of federal taxes.

What does this mean? Benefits received on LTD Option 3 will be taxable income to employees on a new claim starting after Jan. 1, 2024. All applicable employee withholdings will be deducted from the benefit payments. Benefits received will be included as taxable income on the W2s created by MetLife after the end of 2024.

What does LTD Option 3 cover?

63% of Pre-disability Gross Annual Base Salary

Maximum Monthly Benefit: Up to $10,000 per month (covers annual salary of $190,476.24)

Own Occupation: 36 months

Max Benefit Period: If disabled prior to age 65, then benefit lasts until Social Security normal retirement age; age 65, 24 months; age 66, 21 months; age 67, 18 months; age 68, 15 months; age 69+, 12 months

Additional details should be reviewed in the member handbook or at