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Long Term Disability Insurance

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Updates to Long Term Disability Coverage

It has been more than 30 years since we have updated the salary levels and duration of coverage in our LTD plan. 

Please note: The limitations outlined in this coverage is for “own occupation,” disability, meaning a disability preventing someone from working in their current position. These limits do not apply if you become totally and permanently disabled. In that case, coverage lasts until Social Security age of retirement.

As of January 1, 2019, the following levels and durations now apply:

  • Employees with base salary of less than $40,000: 24 months of coverage

  • Employees with base salary of $40,000 to $69,999: 60 months of coverage

  • Employees with base salary of $70,000 or more: coverage until Social Security retirement age.

Updated explanations of our LTD coverage are available in the Lehigh Benefits portal.

 

Lehigh’s long term disability (LTD) insurance provides income replacement for 66 and 2/3 percent of an employee's LTD Base Salary for periods of disability that exceed 180 days.

LTD Base Salary is an employee’s budgeted salary prior to the date disability begins. That figure is determined by the period of the calendar year in which the benefit starts: 

  • For the period January 1 through June 30, the employee's budgeted base salary as of January 1 or the employee's initial enrollment date, whichever is later.
  • For the period of July 1 through December 31, the employee's budgeted base salary as of the employee's annual salary adjustment date (July 1 or September 1) or the employee's initial enrollment date, whichever is later.

The monthly benefit cannot exceed $15,000 per month.

Pre-Tax versus Post-Tax Premium Payments

The premium cost for LTD insurance is paid by the university. However, employees have the option of having the premiums paid on a pre-tax or post-tax basis.  The benefit is taxed differently depending on which you choose:

  • If the LTD coverage is provided on a pre-tax basis, there is no income tax paid on the premium. Any benefit received under the plan will be subject to federal income tax.
  • If the LTD coverage is provided on a post-tax basis, the employee pays income tax on the value of the premium but does not pay federal income tax on benefits received under the plan in the event of disability.

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