Long Term
Disability (LTD)
Overview of coverage
1
What is LTD?
LTD is a form of income protection. Under the
plan, a disabled employee is able to receive
money from the LTD carrier if:
1.
2.
3.
Employee has been medically unable to work for
at least 90 days
Employee will receive either 50% or 60% of predisability base earnings (max benefit of
$15,000/month)
The income will (or will not) be taxable to the
employee
2
Who pays the
LTD premium?
CMH buys you coverage for
You may purchase add’l
50% base salary
10% base salary
Total amount available
60% base salary
Note: Physicians, under a separate LTD plan, are
provided 60% coverage by CMH with no
opportunity to increase by 10%.
How do taxes work on
LTD benefits?
The federal government states employees must be taxed
on either LTD premiums or LTD benefit checks
For the majority of employees, CMH “gives” the employee
the premium on each check, then takes the premium out
after tax. This action results in LTD checks being issued
tax-free.
A few employees have requested their premiums NOT be
taxed, meaning their LTD checks would be treated as
taxable income and subject to federal, state, FICA and
Medicare tax withholding.
How long could I collect LTD?
 After
the 90 day waiting period,
LTD benefits will continue until
one of the following:
 You
recover
 You reach age 65
 You pass away
What is an LTD offset?

The LTD checks would be reduced
(dollar for dollar) if you receive either of
the following:
 Social Security Disability income
 Pension payments from the CMH Plan
Note: Salary continuation (Choice Time
and/or ESB hours) are not used to offset
LTD benefit checks.