Given the following example:
*If someone last works on 4/27/12
*First day out of work due to disability is 4/28/2012
*Employer offers STD and LTD, both with the same insurance company
*STD is approved, maximum benefit of 26 weeks.
*STD is approved for 4 weeks initially, then another 7 weeks, then another 5 weeks, etc.
*The employer terminates the employee at week 13 since they terminate employees when 12 wk of FMLA is exhausted.
= As long as the person remains continuously disabled and STD is continuously approved then he is eligible for LTD. And when STD and LTD are with the same insurance company , the ins co does an internal transfer of the claim from STD staff to LTD staff.
STD and LTD plans state that eligibility ends when employment ends, BUT this means IF you are not already out of work. For example, the employee last worked 4/27/2012, is fired 4/28/2012 for stealing from the company. 3 days later he has a disabling stroke. He is not eligible for STD as his coverage ended on the day his employment ended. In this sense it's like auto insurance, you are eligible as long as you pay the premium.. If you don't pay the premium at renewal, and total your car 5 days later, you can't retroactively pay the premium and/or file a claim.
So once someone is on STD and remains CONTINUOUSLY disabled from working according to the insurance company, he/she is eligible for STD and LTD. If the LTD insurance company is different than the STD insurance company....then contact STD and ask how to apply for LTD. They always have a transition plan and contacts at the new company. Often HR/Benefits doesn't understand that you are still eligible for LTD so it's best to ask the ins co first.
My husband is on STD and it will be up on Sept 5. That is when he will be terminated, and LTD will take over. Terminated is not the same as someone who was fired and loses benefits, it just means they are hiring someone else because you are unable to do the job, so your benefits will go on as long as they are approved.
Employers vary on termination practices:
*Some terminate employment at the end of FMLA (approx 12 wk)
*Some employers terminate at the end of STD / Beginning of LTD
*Some employers have an alternate defined date, such as 1 yr out of work
When termination of employment occurs:
*some employers retain the person as a disabled retiree and offer some benefits.
*some employers sever all ties to the employee as of termination date.
If terminated fully, then the employee will receive COBRA paperwork to extend health and dental benefits. In addition, the employee may be eligible to "port" his/her Life Insurance to pay for the coverage on their own. Often HR / Benefits departments aren't clear on this so always ask.
My employer allowed me to remain on health insurance as a disability retiree (at higher rates than employees) until my Medicare began (at which time I was severed from the health insurance plan even if I chose not to take Medicare). If my husband were to loose his job, as a "disability retiree" I can add him to the employer's health insurance (at a rate higher than an employee pays but less than his COBRA would be).
Often the Employee Manual will provide some of these guidelines. Otherwise, if on STD and you see LTD coming up it's time to ask HR/Benefits what happens when STD ends from an employer benefits perspective (health ins, dental ins, etc)