Long-term disability

The long-term disability (LTD) benefit may provide employees with a payment when sick leave benefits have been exhausted. LTD claims are adjudicated independently by the University’s insurer, Sun Life Financial (Contract Number 103355, effective May 1, 2022), based on the terms of the benefit contract and medical evidence provided. 
 

NOTE: The information provided on this web page is for general informational purposes only. In the event of any inconsistency or conflict, the terms and conditions of the insurance contract shall prevail.

Coverage and cost

Employees who are eligible for LTD coverage pay 100 per cent of the LTD premium through payroll deductions. As a result of this cost-sharing arrangement, any LTD benefits payable under the plan for those who are approved by Sun Life, are non-taxable. LTD premium and coverage ends six months prior to an employee reaching age 65.

If approved, LTD benefits provide 85 per cent of a prescribed pre-LTD net salary, up to the maximum insured amount. The maximum amount may be reduced by benefits and payments provided by other sources based on the terms of the contract.

The LTD benefit includes a cost-of-living adjustment – payments are increased in January of each year to reflect the average increase, if any, in the Canadian Consumer Price Index over the 12-month period ending 3 months prior to any adjustment. Any percentage increase to the benefit payment cannot exceed 5 per cent and in the event of deflation, benefit payments are not reduced. 

Application process

Approximately two months before the maximum sick leave benefit period ends, Human Resources initiates the LTD application process for insured employees. The application includes three parts:

  1. A Plan member’s statement  
  2. A Plan sponsor’s statement   
  3. An Attending Physician’s Questionnaire

Initiating the application at this stage is intended to support Sun Life’s adjudication prior to sick leave benefits being exhausted. If an employee elects not to submit an LTD application, sick leave benefits will not be reinstated until six months after their return to work.

Employees who exhaust sick leave benefits and are awaiting an LTD decision may be eligible to receive Employment Insurance (EI) Sickness Benefits. If LTD benefits are later approved retroactively, some or all EI sickness benefits may need to be repaid.

If LTD benefit payments are approved, Sun Life will commence monthly payments from the first day of eligibility.  

If LTD benefits are declined, employees have an opportunity to appeal Sun Life’s decision. The University supports employees with an unpaid leave of absence during an appeals process, allowing up to two appeals (maximum of 60 days per appeal). If the appeal is unsuccessful or an employee elects not to appeal, they are required to consider available options.

Expectations While in Receipt of LTD Benefits

While in receipt of LTD benefit payments, Sun Life expects employees to make reasonable efforts to do all of the following and if not, Sun Life may reduce, hold back, or discontinue benefits.

  • Recover from their disability, including participating in any reasonable treatment or rehabilitation program and accepting any reasonable offer of modified duties from the University
  • Return to their own occupation during the first 24 months that benefits are payable
  • Receive training to qualify for another occupation if it becomes apparent that they will not be able to return to their own occupation within the first 24 months that benefits are payable
  • Try to get work in another occupation after the first 24 months that benefits are payable
  • Obtain benefits or payments that may be available from other sources, such as Canada Pension Plan (CPP) Disability Benefits 

Should CPP Disability Benefits be awarded retroactively to a period during which an employee received sick leave benefits, the employee will be required to repay the University the amount of CPP payable during that period. More information about the CPP Disability Benefit is available on the Service Canada website.

While in receipt of LTD benefits from Sun Life, medical evidence satisfactory to the insurer must be periodically provided, as requested, in order for benefit payments to continue. If an employee does not provide this information within 90 days of the request, they may not be entitled to some or all benefit payments.

Definition of Disability

Sun Life adjudicates access to the benefit based on the terms of the contract, which includes satisfying the definition of disability. The definition of disability is as follows:

  • Unable to perform the regular duties of their own occupation during the LTD qualifying period and the subsequent two years of total disability.
  • After two years of LTD benefit payments, the definition changes and the employee must be unable to work at any occupation for which they are qualified, or may reasonably become qualified by training, education, or experience.

Interrupted Periods of Disability after Payments Begin

If an employee had a total disability for which Sun Life paid LTD benefits, and the total disability reoccurs due to the same or related causes, Sun Life will consider it a continuation of the previous disability if it occurs within six (6) months of the end of the previous disability. Sun Life will base these benefits on the employee’s coverage as it existed on the original date that the employee became totally disabled. If a recurrence occurs after a six (6) month period, a new qualifying period applies.

Rehabilitation Program

Sun Life may require employees in receipt of LTD benefit payments, to participate in a rehabilitation program that they approve in writing. This may include one or more of the following:

  • Consulting a Sun Life rehabilitation specialist
  • Part-time work
  • Working in another occupation or vocational training to support becoming capable of full-time employment

During a rehabilitation program, employees may receive LTD payments plus income, benefits, and payments from other sources. However, the LTD payments will be reduced by 50% of the income received under the rehabilitation program. If during any month the total of any income, benefits, and payments provided is more than 95% of basic earnings when disability began, indexed for inflation, the employee’s LTD payment will be reduced by the excess.

If damages are recovered from another person

Sun Life has the right to part of any money recovered through legal action or settlement from another person, organization, or company who caused an employee’s disability. If an employee decides to take legal action, they must comply with the applicable terms of the Sun Life contract concerning legal action. For LTD payments payable prior to the date of judgment or settlement, if the employee recovers money, they must pay Sun Life 75% of their net recovery or the total disability benefits paid or payable to the employee under this plan, whichever is less. For LTD payments payable after a judgment or settlement, where 75% of the net recovery exceeds the amount that Sun Life recovers for past disability benefits, Sun Life has the right to deduct that excess from ongoing disability benefits.

When payments end

LTD payments end on the earlier of the following dates:

  • The date the employee no longer meets the contract’s definition of disability
  • The last day of the month in which the employee reaches age 65
  • The last day of the month in which an employee retires with a pension or is eligible to retire with a full pension or a full pension equivalent
  • The last day of the month in which the employee passes away

Exclusions

Sun Life will not pay benefits for any period where one or more of the following is true:

  • An employee is not receiving appropriate treatment
  • An employee does any work for wage or profit except where Sun Life has approved it in advance
  • An employee is not participating in an approved rehabilitation program, if required by Sun Life
  • An employee is on a leave of absence, strike, or lay-off
  • An employee is absent from Canada longer than 30 days due to any reason
  • An employee is serving a prison sentence or is confined in a similar institution

Sun Life will not pay benefits for total disability resulting from:

  • The hostile action of any armed forces, insurrection, or participation in a riot or civil commotion
  • Intentionally self-inflicted injuries 
  • Participation in a criminal offence

Other information

Where LTD benefit payments cease due to the employee no longer meeting the contract provisions, the employee is required to consider available options depending on their circumstances.

  • Employees who are under age 65 are able to appeal the insurer’s decision. If they elect to do so, they will be placed on an unpaid leave of absence to support up to two appeals processes (maximum of 60 days per appeal). If the appeal is unsuccessful or they elect not to appeal, they are required to consider available options.
  • Employees who are age 65 are not able to appeal the insurer’s decision and they are required to consider available options. Employees in this situation typically elect to commence their pension.  

If your LTD benefits end and your position at the University is no longer available, the return to work protocol will apply.

If an employee applies for a medical leave within six (6) months following the end of LTD benefit payments, which is verified by the Employee Health & Accommodations team, they are required to provide medical documentation to Sun Life to enable adjudication of this provision. During this application process, the University will provide sick leave benefits which will need to be repaid in the event that LTD benefit payments are reinstated. Sick leave benefits are not payable during the medical leave if an employee does not undertake the application for reinstatement of LTD benefit payments to Sun Life.


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