Practicing physicians who are enrolled in maximum Expanded Long-Term Disability (LTD) coverage or capped Expanded LTD coverage automatically have disability insurance protection in the event of a partial disability. A practicing physician is a person licensed to practice medicine in the State of Michigan who provides patient care services at a university medical facility or affiliated hospital, and does so immediately prior to the disability as part of any job requirement with the university. The following information is about Expanded LTD coverage under the U-M plan. For those practicing physicians who are House Officers, you have coverage under the House Officer's LTD Plan, which is a separate plan administered by an outside vendor.
In order to qualify for partial Expanded LTD benefits, you must be partially and permanently disabled from your own occupation. Partial means you are unable to practice within the terms of your university appointment; permanent means your disability or impairment must last, or be expected to last, for at least 12 months.
If your claim is approved by the Claims Administrator, your partial Expanded LTD benefits will begin after you have exhausted all paid time benefits, including short-term sick time pay and extended sick time pay, or after the waiting period if applicable.
Partial LTD Income Replacement Benefits
If you are a practicing physician and meet the definitions of partial disability, you will be entitled to your earnings from work plus 65 percent of your covered lost earnings.
Example 1, Maximum Expanded LTD Coverage
You are a physician enrolled in maximum Expanded LTD coverage and your full pre-disability base salary is $150,000 per year. Due to your disability, you are no longer able to perform patient care activities, but you can continue to perform other responsibilities earning $50,000 per year, meaning your covered lost earnings are $100,000 per year.
Your maximum Expanded LTD income benefit would be 65 percent of your lost earnings, and 65 percent of $100,000 is $65,000. Adding your $50,000 earned income to the $65,000 LTD income replacement benefit, your gross university income in this example would be $115,000 per year.
Example 2, Capped Expanded LTD Coverage
You are a practicing physician enrolled in the capped Expanded LTD coverage and your full pre-disability base salary is $150,000 per year. Due to your disability, you are no longer able to perform patient care activities, but you can continue to perform other responsibilities earning $50,000 per year.
In this example, your enrollment in capped Expanded LTD coverage reduces your covered lost earnings to $59,000 per year. Based on this, your partial LTD income replacement benefits would be 65 percent of $59,000, or $38,350. Your gross university income in this example would be your $50,000 earned income plus $38,350 in capped LTD income replacement benefits, or $97,350 per year.
Retirement Savings Plan Contributions
If you are enrolled in the Basic Retirement Savings Plan, the Expanded LTD plan will provide a monthly LTD retirement savings contribution on your behalf to TIAA and/or Fidelity Investments. You will receive a percentage of your covered lost earnings as defined by the Basic Retirement Savings Plan. The LTD Retirement Savings Plans contributions are subject to the annual IRS limits. Contributions will not be made to your 403(b) Supplemental Retirement Account, 457(b) Deferred Compensation plan, or the Roth 403(b) or Roth 457(b).
Earned Income Offset
Income from another position will be considered for offset or coordination, and your partial LTD benefit will be adjusted accordingly. This includes any income you earn from employment with the university or outside the university, including self employment. It is your responsibility to report earned income to the Benefits Office for timely reconciliation.