Short-Term Disability Policy
March 09, 2008
The purpose of the Short-Term Disability policy is to clearly define the eligibility requirements, benefits, administration of, case management of, disputes, reductions, confidentiality/privacy issues as they relate to the release of medical information, termination, as well as other important topics related to this disability benefit.
Subject: Short-Term Disability
Example of: Standard Policy
Regular full-time employees who have been employed for the last 12 months are eligible for short-term disability pay. The following paragraphs will describe your benefits and the procedures to be followed in the event you are entitled to short-term disability benefits.
Maximum wage benefits are $ ____ per week and $ ______ lifetime.
Maximum number of weeks of wage benefits are ___ weeks.
You are expected to follow fully and completely the professional advice provided to you by health-care or rehabilitation providers and to keep all scheduled appointments.
You will be eligible to receive income replacement benefits for the average wages you would have earned from the Company for each workday you are disabled up to the maximum. Average weekly earnings shall be ___ % of the total wages earned from working for the Company, for the wage history period, excluding overtime, bonuses, or other income. If you have not been employed by the Company for 10 consecutive weeks prior to your disability, your average weekly earnings shall be computed by adding your total wages from the Company for the number of weeks you were employed by the Company and dividing said gross earnings by the actual number of weeks or fractions thereof that you were employed by the Company.
You will receive these income replacement benefits until a healthcare provider has released you to return to work, including restricted or light duty activities, or for the maximum weeks or the maximum benefit, after the date of your disability, if you are not released to return to work during that period. When you have been released by a healthcare provider to return to work (including restricted or light duty), you must immediately report to your supervisor.
A subsequent period of disability will be deemed to be the continuation of the initial period of disability and not subject to a new benefit period unless:
• You resumed your job for a continuous period of 6 months or longer; or
• The injury is a new injury for which the Company has not paid benefits under the short-term disability benefit.
Reduction in/and coordination of benefits. Benefits payable shall be reduced dollar for dollar, by (a) amounts received by you as wages, salary, overtime, and bonuses during the eligible period and (b) by all workers’ compensation pay benefits, Social Security benefits, Railroad Retirement Act benefits, and all other payments and benefits received pursuant to an insurance policy, other benefit, statute, or other law as a result of your disability. In the coordination of benefits, one of the benefits is primary and the others are secondary.
The primary pays its full benefits first, then other plan(s) coordinate payments so that the total from all plans will not be more than such lost wages. This benefit is secondary to all other plan(s) and benefits.
As a condition of obtaining benefits, you are required to cooperate fully with all case management.
Notice of other coverage.
Any employee claiming benefits is obligated to notify the Company of the existence of coverage through other plans or any payments that would result in a reduction of benefits.
Loss of benefits.
Benefits may be forfeited, discontinued, or suspended if you fail to follow the provisions of this benefit, including, but not limited to, any of the following:
• You do not keep your scheduled appointment with or do not follow fully and completely the instructions of the healthcare or rehabilitation provider.
• You do not report to your supervisor immediately after the healthcare or rehabilitation provider releases you to return to work.
• The disability is determined to have occurred when you were intoxicated or under the influence of unauthorized drugs.
• The disability results from horseplay, fighting, failure to follow the Company’s safety rules, and/or practices, regulations, or procedures, or other inappropriate behavior.
• The disability was self-inflicted, the result of attempted suicide, or caused by your willful intention to unlawfully injure another person.
• The disability arose out of war or any act of war, whether war is declared or not.
• The disability arose out of service in one of the armed forces of any country or international authority.
• The disability arose out of your felonious act or attempt of such an act.
• The disability is feigned.
• There is an attempt to defraud the Company.
• You fail to cooperate in the investigation of the disability or the circumstances surrounding its occurrence or alleged occurrence.
• You make a false statement to the Company or to a healthcare provider.
• You refuse to submit to a medical examination required by the Company, which may include drug or alcohol testing, as soon as practical after any accident occurs.
• You fail to report for work on being released to return to work (including released for light or restricted duty) by the treating physician.
• You refuse to execute a subrogation of a claim against any third party in favor of the Company.
• You fail to participate in or complete a rehabilitation program. Additionally, your benefits may be reduced by any amounts you receive from any other Company benefits or any other sources for the disability.
The Company and you have the right to enter into a resolution of all potential claims for benefits whenever there exists a disagreement between the Company and you. If a dispute shall arise as to any amount or sum of money to be paid, the Company shall have the right to make payment “under protest,” without waiver or prejudice, to the right to recover from the employee such payment. If it shall later be determined (by agreement, mediation, arbitration, or otherwise) that an employee has been paid an amount that should not have been paid, the Company shall be entitled to recover the amount paid, plus interest at the highest lawful rate, from the date on which such payment was made until the date on which reimbursement is received. This payment “under protest” does not limit the right of the Company to recover excess payments under any other provision.
Benefits may not be assigned.
Recovery of excess payments.
Whenever payments have been made in excess of the amount necessary to satisfy this benefit, the Company has the right to recover these excess payments from any individual or entity to whom the excess payments were made. The employee has an obligation to reimburse the Company for excess benefits, and excess payments to the employee will be treated as an advance against wages, which may be deducted from wages or any amounts owed by the Company to the employee. Further, whenever payments have been made based on false information provided by you, the Company has the right to withhold payment on future benefits, wages, or other amounts owed by the Company to you, until the overpayment is recovered.
Right to receive and release necessary information.
The Company may, without the consent of or notice to any employee, release to or obtain from any individual or entity, including any healthcare provider, information needed to implement benefit. When you request benefits, you must furnish all the information required.
Confidentiality of medical information.
Medical information will be maintained in confidence and will be disclosed to individuals on a need-to-know basis. Neither the benefit nor this policy are a contract of employment. Neither the benefit nor this policy are a contract of employment between any employee and the Company, and grant no rights of continued employment to you or any other participant. Nothing contained in this policy shall be deemed to give any employee the right to be retained in the service of the Company, or to restrict the right of the Company to discipline or discharge any employee at any time, with or without notice or with or without cause. Nor shall they be deemed to give the Company the right to require any employee to remain in its employ or to restrict the employee’s right to quit at any time, with or without notice or with or without cause.
No vested right to benefits. While the Company currently provides the benefit to eligible employees, you have no vested right to such benefits. The Company may withdraw or modify them at any time in its sole discretion or terminate the benefit at any time.
The Company has the right and opportunity to examine you as often as it may reasonably require during the payment of benefits or the pendency of a claim. These examinations may include, but are not limited to, blood and urine tests for alcohol and other intoxicants.
Compliance with applicable law and severability.
It is the intent of the Company to comply with all applicable laws, including but not limited to the Internal Revenue Code of 1986, the Americans with Disabilities Act, and the Family and Medical Leave Act. If any provision of the policy shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof and the benefit document shall be construed and enforced as if such provision had not been included. Furthermore, in lieu of such provision, there shall be added automatically a provision as similar in terms as such invalid or unenforceable provision as may be possible and be valid and enforceable.
Headings and titles are for convenience, and the text will control in all matters.
Benefits not guaranteed.
The Company does not guarantee the payment of benefits.
Amendment and/or termination.
The benefit policy may be amended or terminated at any time and from time to time by the Company through the written action of its chief executive officer or his or her designee.
If any controversy arises or any claim is made on or after the effective date of this benefit policy arising out of or relating to the benefits or otherwise relating to them or a disability and if the dispute cannot be settled through direct discussion, the Company and the employee agree to endeavor to settle the dispute in an amicable manner by mediation, under the applicable provisions of section 154.001 et seq., Texas Civil Practices and Remedies Code, as supplemented by the rules of the American Arbitration Association (AAA). The mediation will take place at a neutral location within __________ County. The parties shall agree on the mediator. If the parties are not able to agree on a mediator, the AAA shall appoint one from the members of the mediation panel of the AAA. The Company and the employee shall equally bear the cost of the mediation.
Any controversy or claim made on or after the effective date of this benefit policy arising out of or relating to a claim for benefits or otherwise relating to the policy or a disability shall be settled by arbitration in accordance with the then-current Employee Benefit Claims Arbitration Rules of the AAA (or any successor rules), which are hereby incorporated into this policy by this reference. The Company may not be required to submit any such claim or controversy to arbitration until the employee has first exhausted the Company’s internal appeals procedures, although the Company may voluntarily do so at any point in processing any dispute. The Company will bear all costs of an arbitration, except that the arbitrator shall have the power to apportion among the parties expenses such as pre-hearing discovery, travel, experts’ fees, accountants’ fees, and attorney’s fees and except as otherwise provided herein. The decision of the arbitrator shall be final and binding on all parties, and judgment on the arbitrator’s award may be entered in any court of competent jurisdiction.
Any arbitration will be conducted in accordance with the following provisions, not withstanding the rules of the AAA. The arbitration will take place at a neutral location within _______ County. The arbitrator will be selected from the members of the Commercial Panel of the AAA who reside in the metropolitan area associated with the county in which the arbitration is to take place.
In any such arbitration, each party shall be entitled to discovery of any other party as provided by the Texas Rules of Civil Procedure then in effect. The arbitrator may make orders and issue subpoenas as necessary. The Federal Arbitration Act applies to the interpretation of this arbitration provision. To the extent that Texas law is not pre-empted by federal law, Texas law applies. Any party has the right to arrange for a stenographic record to be made of the proceedings, which stenographic record shall be the official record. Either party may make an offer of judgment at any time in accordance with the procedures of Rule 68 (or its successor) of the Federal Rules of Civil Procedure. The existence of such an offer is not admissible in any proceeding. If the monetary award of the arbitrator to a party is less than any monetary offer to that party plus 20 percent of such offer, that party receiving such award shall pay the other party his reasonable attorney’s fees, experts’ fees, accountants’ fees, and other costs incurred with respect to the arbitration following the date of the offer of judgment. Such amount is to be deducted from the award prior to payment. Arbitration is the exclusive remedy for any dispute between the parties.