Disability Insurance Plan Options
To help protect your income in the event of a disability, the State provides eligible employees with Short-Term Disability (STD) Insurance and the option to purchase Optional Long-Term Disability (LTD) Insurance. Both the STD and Optional LTD plans are provided through the Unum Insurance Company.
Unum Insurance Company
The State provides most benefit-eligible employees with Short-Term Disability (STD) Insurance which pays up to 60% of your weekly pre-disability covered compensation, up to a maximum STD weekly benefit payment of $3,000 per week, for up to 150 days during any 12 month period, following the required STD elimination period which is 30 calendar days. Employees may use their sick bank or PTO during the 30 day elimination period and may continue using it to supplement their disability benefits up to 100% of weekly pre-disability compensation.* You are automatically enrolled into the Short-Term Disability Insurance plan and coverage is effective the first day of the month following your date of hire.
*Paid Leave Supplement to STD Benefit
Employees are required to use accrued paid leave during the 30-day waiting period for short-term disability benefits, including the use of accrued annual leave and/or compensatory time once accrued sick leave has been exhausted. When an employee is receiving short-term disability payments, the employee may choose to use accrued paid leave to make their salary whole in an amount that is closest to the difference between the short-term disability benefit payment and the employee’s gross base pay, excluding any pay differentials. Employees who elect to be made whole will use accrued sick leave first, then annual leave or compensatory time as available.
You are disabled when Unum determines that:
- you are limited from performing the material and substantial duties of your own job due to your sickness or injury; and
- you have a 20% or more loss in weekly earnings due to the same sickness or injury (including childbirth).
Taxation of STD Benefits
Internal Revenue Code (IRC) Section 105 indicates that STD benefits, as sick pay, are to be included in the gross income of employees if the employer pays part or all of the premium for the STD coverage. In these situations, the STD disability benefits received by the employee are subject to federal taxation. The State of Colorado pays the entire STD insurance premium which means that the STD benefits received are 100% taxable to the employee.
PERA Defined Benefit Vested Employee &, Unum Short-Term Disability (STD)
Employees with at least five years of PERA Defined Benefit (DB) Retirement Plan covered employment service may be eligible for PERA STD benefits. The Unum STD insurance coverage will always coordinate with an employee’s PERA STD coverage. The PERA STD benefits will always be the primary STD benefits and will be an offset to Unum STD benefits.
Optional Long-Term Disability
Employees who regularly work a minimum of 12 hours or more each week are eligible to enroll in the Optional Long-Term Disability (LTD) Insurance plan. The Optional Long-Term Disability Insurance plan pays up to 60% of your monthly pre-disability covered compensation, up to a maximum monthly benefit of $10,000 per month, following the required LTD elimination period of 180 calendar days. As long as you continue to meet the definition of disability, benefits are payable until age 65 or beyond, depending on your age when you become disabled.
You are disabled when Unum determines that:
- you are limited from performing the material and substantial duties of your regular occupation due to your sickness or injury; and
- you have a 20% or more loss in your indexed monthly earnings due to the same sickness or injury.
After 18 months of payments, you are disabled when Unum determines that due to the same sickness or injury, you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience.
If you are a current employee and newly elect to enroll in the Voluntary Long-Term Disability Insurance plan during Annual Enrollment, you need to provide proof of good health (medical evidence of insurability) to Unum. Unum will review your medical information and either approve or decline your benefit election. Premiums are determined by salary, age and PERA Defined Benefit (DB) Retirement Plan vesting status and are deducted from pay post-tax. If you currently have coverage and wish to continue that coverage, or if you are switching from the PERA non-vested plan to the PERA vested plan you do not need to provide proof of good health (medical evidence of insurability).
IMPORTANT - Guaranteed Acceptance for New Hires
If you elect to enroll in the Optional LTD Insurance plan as a new hire you will automatically be enrolled into the Optional LTD insurance plan without having to prove good health. Your Optional LTD insurance will become effective the first day of the month following your date of hire.
Your Unum Optional LTD plan does not cover any disabilities caused by, contributed by, or resulting from the employee's pre-existing condition. You have a pre-existing condition if:
- you received medical treatment, consultation, care or services including diagnostic measures, or took prescribed drugs or medicines in the 3 months just prior to your effective date of coverage; and
- the disability begins in the first 12 months after your effective date of coverage.
Taxation of Optional LTD Benefits
Optional LTD benefits are not subject to federal taxation because an employee pays 100% of the Optional LTD premium on a post-tax basis which means the Optional LTD benefits are not included in the gross income of the employee.
PERA Defined Benefit Vested Employee &, Unum Optional Long-Term Disability (LTD)
Employees with at least five years of PERA Defined Benefit (DB) Retirement Plan covered employment service may be eligible for PERA Disability benefits. The Unum Optional LTD insurance coverage will always coordinate with an employee PERA Disability coverage. The PERA Disability benefits will always be the primary Disability benefits and will be an offset to Unum‚ Optional LTD benefits.