Disability Insurance Questions & Answers

What are the benefits to choosing pre-tax or post-tax long-term disability (LTD)?

If you select pre-tax Long-Term Disability (LTD) your coverage will be entirely paid for by eFunds. However, this also means that if you ever receive benefits under the plan, they will be taxed, as your normal salary would be. If you select post-tax LTD, you will pay taxes on the cost of coverage eFunds reimburses you for the plan fees, you pay the taxes on that amount. If you ever receive benefits under the plan, those benefits will not be taxed.

What does actively at work mean?

"Actively at work" means that you are expending time and energy for eFunds at your usual place of business on a full-time basis. If you are working on the day your disability coverage would take effect, you are considered to be actively at work.

What are the rules regarding disabilities due to pre-existing condition?

A pre-existing condition is one for which you have been treated by a healthcare provider or taken medication in the three months preceding the date you become insured. Benefits will not be paid for any pre-existing condition until the earlier of:

• Three consecutive months, during which you have not seen a healthcare provider or taken medication for the condition, concluding on or after the date your coverage began.
• Twelve consecutive months during which you are continuously insured under this plan.

What are my "covered earnings"?

Your covered earnings consist of your annualized base pay (including commissions) excluding overtime, incentives, or bonuses.

What is the Social Security Normal Retirement Age?

This simply means the age at which unreduced Social Security benefits are payable. The Social Security retirement age for individuals born 1938 through 1942 is age 65 or a few months past; for those born 1943 through 1959, it is age 66 or a few months past; and for those born 1960 and after, the age is 70.

When am I eligible for disability benefits?

If you are unable to perform at least one of the material duties of your regular or a comparable occupation because an injury, sickness or pregnancy requires you to be under the regular care and attendance of a doctor, or if you are prevented from earning more than 80% of your monthly pay due to an injury, sickness or pregnancy, you may be considered disabled and eligible for plan benefits.

Will short-term disability (STD) cover pregnancy?

Yes, in case of a disabling pregnancy, eFunds will grant you five working days of Parental Leave of absence. This paid leave will be used during your elimination period. Contact the Benefits Department for more information.

Will disability insurance benefits be considered taxable income?

Short-term disability benefits will be taxable wages. If you select pre-tax long-term disability, any benefit you receive will be fully taxable when paid. If you elect post-tax LTD, you will be taxed only on the value of the premium when you enroll but the benefit payable will not be taxable. The premium in 2003 will be $.20/$100 of monthly base earnings.

How might government plans offset my disability benefits?

If you work in California, Hawaii, New Jersey, New York or Rhode Island, you may be eligible for disability coverage through the state. Contact the Benefits Department for more information.

Who do I call if I have questions about my disability benefits?

First, call the Benefits Department for assistance. However, you may also call CIGNA with general questions about disability claims (both LTD and STD) at 1-800-642-8241.