Offsets

Under the LTD Plan, certain amounts that you receive (or are considered to have received) operate to offset or reduce your LTD benefits. Cigna calls these amounts "Other Income Benefits.”

Other Income Benefits include:

  1. Any amounts received (or assumed to be received*) by the employee or his or her dependents under:
    – the Canada and Quebec Pension Plan;
    – the Railroad Retirement Act;
    – any local, state, provincial or federal government disability or retirement plan or law;
    – payable for injury or sickness provided as a result of employment with the employer;
    – any sick leave or salary continuation plan of the employer;
    – any work loss provision in mandatory "No-Fault" auto insurance.
  2. Any Social Security disability or retirement benefits the employee or any third party receives (or is assumed to receive*) on his or her own behalf or for his or her dependents; or which his or her dependents receive (or are assumed to receive*) because of his or her entitlement to such benefits.
  3. Any retirement plan benefits funded by the employer. "Retirement plan" means any defined benefit or defined contribution plan sponsored or funded by the employer. It does not include an individual deferred compensation agreement, a profit sharing or any other retirement or savings plan maintained in addition to a defined benefit or other defined contribution pension plan, or any employee savings plan including a thrift, stock option or stock bonus plan, individual retirement account or 40l(k) plan.
  4. Any proceeds payable under any franchise or group insurance or similar plan. If other insurance applies to the same claim for disability, and contains the same or similar provision for reduction because of other insurance, the insurance company will pay for its pro rata share of the total claim. "Pro rata share" means the proportion of the total benefit that the amount payable under one policy, without other insurance, bears to the total benefits under all such policies.
  5. Any amounts received (or assumed to be received*) by the employee or his or her dependents under any workers' compensation, occupational disease, unemployment compensation law or similar state or federal law payable for injury or sickness arising out of work with the employer, including all permanent and temporary disability benefits. This includes any damages, compromises or settlement paid in place of such benefits, whether or not liability is admitted.
  6. Any amounts paid because of loss of earnings or earning capacity through settlement, judgment, arbitration or otherwise, where a third party may be liable, regardless of whether liability is determined.

Dependents include any person who receives (or is assumed to receive*) benefits under any applicable law because of an employee’s entitlement to benefits.

* Includes benefits you're eligible to receive — even if you have not actually received them — unless you submit satisfactory proof to Cigna that you have applied for those benefits and that they have been denied, you sign a reimbursement agreement and you provide satisfactory proof that all appeals for disability income have been made unless Cigna determines that further appeals are not likely to succeed.

The following table shows how any lump-sum offsets you receive are applied to your LTD benefits.

From other sources paid in a lump sum that ...
Offset
Covers a specific time period.
Offsetting payments will be prorated over that time period.
Does not cover a specific time period.
Offsetting payments will be prorated over five years.
Does not specifically allocate a certain amount to disability income.
The total amount will be considered an offsetting benefit.

Once the initial reduction to your LTD benefits has been made to reflect an offsetting benefit, your benefits will not be further reduced by cost-of-living adjustments to the offsetting benefits.

 

Publication date: April 2019

 

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