Long-Term Disability Insurance - Chapter 3-4

• Financial Administration Act;
• Public Service Management Insurance Directives made by TB 81500 of November 1, 1990, as amended from time to time (Appendix A to Chapter 1-1, Insurance and Related Benefits Volume of the TBM).

The administration of the LTD is the same as for the PSMIP (See Chapter 1-1, paragraph 2.2 of this volume).

The eligibility requirements for LTD and the exceptions are the same as for the other portions of the PSMIP. (See Paragraph 4.1 of Chapter 1-1 of this Volume.) However, the following persons who are eligible for the other portions of the plan are not eligible to carry LTD insurance:

• judges under the Judges Act; and
• employees who have attained the age of 64 years, 9 months.

4.2.1 Optional

LTD membership is optional for persons who were eligible to join the PSMIP or the Disability Insurance (DI) Plan before the applicable effective date (September 1, 1982 for part-time employees and November 1, 1970 for all other employees) and have remained continuously employed since that date. Persons who did not join LTD or the DI Plan within two months of becoming eligible to apply must submit a Statement of Health acceptable to the Insurer in order to have coverage.

4.2.2 Compulsory

LTD insurance is compulsory for all persons eligible to join the PSMIP who entered the Public Service on or after the applicable effective dates specified in paragraph 4.2.1 above.

4.2.3 Other employers

Employees of any board, commission, corporation or other portion of the Public Service of Canada specified in Parts I and II of the Public Service Management Insurance Directives are eligible to join LTD insurance on the dates specified in the Directives.

4.3.1 Eligible employees with an option

In cases where an acceptable Statement of Health is required, coverage and premiums begin on the first day of the month following the month in which application is received by Personnel, provided that the Statement of Health is accepted by the Insurer.

4.3.2 Eligible employees with compulsory insurance

Coverage for compulsory LTD members commences on the date of eligibility under the PSMIP. Premiums will only be payable from the first day of the month following the date coverage commences.

LTD insurance may only be cancelled by those persons who were members before November 1, 1970; for all others, cancellation is not permitted.

A member insured for LTD who ceases to be eligible because he or she is appointed to duties which are not managerial or confidential may retain his or her membership in LTD. If a member in this situation should decide to switch his or her membership to the DI Plan, he or she must simultaneously cancel all optional insurance under the PSMIP.

Coverage continues until age 65, but contributions cease at age 64 years, 9 months.

4.3.3 Level of insurance and cost of coverage

Contributions and benefits for LTD insurance are based on the member's current salary, the definition of which is the same as that used under the Supplementary Death Benefit Plan. If that salary is a multiple of $250, contributions and benefits are based on that salary; if it is not a multiple of $250, they are based on the next highest multiple of $250. This is known as the "adjusted salary".

4.3.3.1 Part-time employees

For a part-time employee, as defined in paragraph 3.2 of Chapter 1-1 of this volume, the "adjusted salary" is determined by reducing the full-time salary for his or her occupational group and level in proportion to the relationship his or her assigned hours of work bear to the normally-scheduled full-time hours of work for that group.

e.g., Insured Salary =

Assigned Hours Multiplied By Full-Time Salary

Full-Time Hours

If this amount is not a multiple of $250, it is rounded to the next highest multiple of $250.

4.3.3.2 Premium Rate

The current premium rate is $0.83 per month for each $1,000 of the adjusted annual salary of which the member pays $0.124 and the government, as employer, pays the remainder.

4.3.3.3 Retroactive salary increases

Effective March 1, 1993, "insured salary" includes retroactive increases in salary when they are authorized after the date on which disability benefits became payable, provided the effective date of the increase is prior to the date of entitlement to benefits.

4.3.4 Leave without pay

A member's coverage continues during all periods of leave without pay and premiums are collected from salary on return to duty. Only the employee's share of the LTD premium is required where the leave without pay is due to:

1. illness;
2. maternity reasons;
3. paternal responsibilities for the purpose of caring for the member's child;
4. parental responsibilities for the purpose of caring for a child for which the member accepts custody for adoption;
5. personal needs for a period not exceeding three months when the leave was approved by the appropriate authority as leave for personal needs;
6. service in the Armed Forces;
7. educational leave in respect of which the member would pay single contributions under the PSSA; or
8. service with a federal Royal Commission, board or agency that is an agent of Her Majesty in Right of Canada.

Subsections .2, .3 and .4 above only apply to those members who are entitled to leave without pay for family responsibilities related to paternity, adoption and other personal needs. (Chapter 1-5, Compensation Volume 8, TBM).

In all other leave-without-pay situations, the member must pay both the employee's and the employer's share of premiums. However, all premiums are waived in cases of leave without pay during any period where a member is or becomes eligible for LTD benefits. In any case where an employee is paid for part of a month, whether or not the employee is on leave without pay for the remainder of the month, only the employee's share is payable for that month, regardless of the reasons for leave.

4.3.5 Administrative errors affecting premium deductions

Where it is discovered that, as a result of administrative error, premium deductions are not being made from an employee's salary, the proper deductions should be commenced immediately. The paying office should also be instructed to pick up retroactive deductions back to January 1 of the year in which the error is discovered, or the date on which deductions should have commenced, whichever date is more recent. The retroactive deductions should be made over a period equal to the period for which collection is being made, that is by "doubling up" for as long as necessary.

Effective September 1, 1979, the level of benefit is 70% of adjusted salary with total offset of other disability benefits paid in respect of the same disability, such as those payable under the Canada or Quebec Pension Plans, the PSSA, or benefits under the Government Employees Compensation Act or similar provincial or federal legislation.

Benefits to all employees who became disabled prior to September 1, 1979, are subject to annual increases to a maximum of 2%. Benefits to employees who became disabled on or after September 1, 1979, are subject to annual increases to a maximum of 3%.

Benefits are payable for up to 24 months in respect of any medically-determinable physical or mental impairment which a) results in the withdrawal of any mandatory licence required by the employee to carry out his or her occupation or employment, or b) renders the employee completely incapable of performing substantially all of the essential duties of his or her occupation or employment.

Benefits will continue to be paid, after the 24-month period referred to above, as long as the totally disabling condition prevents the employee from earning more than 66 2/3% of the current annual rate of remuneration for the occupation of the employee or the position held by the employee immediately prior to the date he or she became totally disabled. However, an employee who engages in an occupation or business, except as provided in the Rehabilitation provision of the Long-term Disability Benefit, will be deemed not to be totally disabled. In no case are benefits payable beyond age 65.

It is important for personnel officers to remember, and to remind potential claimants, that in order to be eligible for benefits under LTD, a claimant must satisfy the Insurer's medical consultants, on the basis of concrete medical evidence, that he or she is totally disabled within the exact meaning set out in the plan.

If, for example, an employee's retirement on grounds of disability has been approved by Health Canada, or if the employee has been ruled eligible for benefits under the Canada or Quebec Pension Plan, this may provide useful additional information to the Insurer, but does not alter the fact that the employee's condition must still be shown to be one of total disability as defined in the plan. Similarly, where an employee is involuntarily released for cause under paragraph 11(2)(f) of the Financial Administration Act (FAA) as amended by the Public Service Reform Act, the employee should be made to understand clearly that this does not mean he or she will automatically be eligible for LTD benefits. "Incapacity" for the purposes of the PSEA can be quite different from "total disability" for the purposes of LTD, and personnel officers and claimants should govern their expectations accordingly.

LTD benefits become payable after 13 weeks of disability, or after the member's paid sick leave is exhausted, whichever is later.

While in receipt of benefits, an employee may engage in a Rehabilitation Program, which means a program of vocational training or a period of work for the purpose of rehabilitation, either of which is approved in writing by the Insurer. Depending on the circumstances, the employee may be able to engage in such a program for up to 24 months without losing his/her qualification for benefits. Monthly benefits will not be reduced by any earnings received from the program, with one exception. The employee's total income while working together with any benefits received under this Plan, must not exceed 100 per cent of the current salary for the occupation of the employee or the position held by the employee immediately prior to the date he or she became totally disabled. Please note that benefits would be offset by 100 per cent of any earnings from employment not approved by the Insurer as rehabilitative.

The Insurer may pay the expenses incurred by an employee, other than usual employment expenses, which are associated with an approved rehabilitation program, provided the expenses have been approved, in writing, by the Insurer prior to being incurred.

Under the provisions of LTD, no benefits are payable in respect of a disability resulting from any illness or condition which existed at the commencement of an employee's insurance.

This limitation is waived once an employee has completed a period of 13 continuous weeks of active employment while insured, with no absence due to illness, during which the employee did not receive any medically required services for the disabling condition. This limitation is waived after the employee has been a member of the plan for 24 months, provided that the disability does not commence during that time.

4.9.1 Claims procedure

The Insurer wishes to make prompt and proper payment of any benefits to which an employee is entitled. If the employee is totally disabled and thinks the disability will last long enough to qualify for benefits, the employee should notify his or her personnel office as soon as possible. The personnel office will provide a claim form and a form for the doctor to complete (Attending Physician's Statement of Disability). It will be the employee's responsibility to complete Part I of the claim form and to arrange for the completion of the Attending Physician's Statement. It is important for both the employee and the doctor to complete these statements as clearly and completely as possible. If the employee or the doctor wish to add extra information to help explain the case, this is perfectly acceptable.

Claims for benefits are adjudicated by Industrial Alliance on the basis of all, and only, the objective medical evidence provided on the claimant's condition. To substantiate a claim, the medical information provided must be sufficiently complete, and supported to the fullest extent possible by objective test results and clinical findings, so that an independent physician, possessed of the appropriate medical qualifications, would, on the basis of that information, be able to arrive at a diagnosis of total disability for the claimant's own job.

Accordingly, the employee should ask the doctor to provide a full, well-documented report that clearly shows the objective medical evidence supporting his or her diagnosis and prognosis. If more than one doctor is involved in the assessment or treatment of the employee's disabling condition, all doctors should supply the Insurer with full medical reports. The onus is ultimately on the claimant to provide the Insurer with sufficient medical proof of total disability. It is important to note that any omissions or unclear statements could result in a delay in settling a claim.

The completed forms should be returned to the personnel office, which is responsible for completing Part 2 of the claim form and passing the claim on for processing. (If the employee wishes, however, the Attending Physician's Statement can be detached and mailed directly to Industrial Alliance. It is the employee's responsibility to follow-up with his or her physician to ensure that the medical report is completed by the doctor in a timely manner and reaches Industrial Alliance without delay.) All of this should be done within 90 calendar days of the date the employee becomes totally disabled.

The Insurer has the right to request additional medical information from the claimant's doctors as often as may be reasonably required. In addition to these supplementary reports, the Insurer frequently uses independent medical consultants to provide the necessary additional objective medical evidence. This is often the only objective way the Insurer has to assess, or monitor the course of, a disability, to ensure that benefits are not paid to persons who are not eligible or who have recovered to the point where they no longer qualify.

4.9.2 Review procedure

If a claimant does not agree with the decision given by the Insurer in connection with a claim for benefits, his or her case may be put forward for a review by the Board of Trustees. The Board has power only to make recommendations to the Insurer and cannot overrule decisions the Insurer has made. However, the Insurer supports the principle of such a review procedure and has given its full cooperation in all respects. If a claimant wishes to have his or her case reviewed by the Board of Trustees, the claimant should give all of the details of the case to the personnel office, or write directly to:

The Secretary
Board of Trustees
Public Service Management Insurance Plan
Treasury Board Secretariat
5th Floor, West Tower
L'Esplanade Laurier
Ottawa, Ontario
K1A OR5