One in eight Americans will be disabled for five years or more during their working careers, according to the Council for Disability Awareness. Yet 67% of Americans have no long term disability coverage, states the Social Security Administration.
The Group Elite Long Term Disability Plan, endorsed by the AICPA, is designed for CPA firms with 25 or more eligible lives to be covered. This Elite Plan allows benefit administrators to control cost through flexible options. You can customize your firm's disability benefits by choosing between two definitions of disability, your monthly benefit amount, waiting periods and more.
To be eligible for the Group Elite LTD Plan, the firm must meet all of the following requirements:
- The firm must be actively practicing public accounting or AICPA member(s) must retain at least 50% ownership of the firm if it is not in public accounting.
- The proprietor or at least one partner or firm member must be an AICPA member.
- The firm must have at least 25 insured individuals and the firm must have at least one employee, other than the proprietor, partner, or firm member.
- The firm's principal office must be in the United States (firms in Iowa are not eligible).
The Elite Long Term Disability Plan allows plan administrators to build their own customized disability program from their firm.
Definition of Disability – Choose between two definitions of disability:
- Regular Occupation is defined as the inability of an insured owner or employee to work at the occupation they were performing at the time of the disability.
- For a lesser premium, the firm has the option of selecting the Regular Occupation definition of disability for the first two years of disability and then a Gainful Occupation definition thereafter. Gainful Occupation is defined as the inability to work at any occupation for which the insured is reasonably fitted by education, training or experience and you are under the regular care of a doctor. *
*Gainful occupation means an occupation, including self-employment, that is or can be expected to provide you with an income within 12 months of your return to work, that exceeds:
60% of your indexed monthly earnings, if you are working
60% of your monthly earnings, if you are not working
The amount of monthly disability benefits available depends on the definition of disability selected.
When selecting the Regular Occupation definition of disability, the firm may elect a maximum monthly coverage amount between $4,000 and $15,000 in $1,000 increments. Firms electing the Regular Occupation/Gainful Occupation definition of disability may elect a maximum monthly coverage amount between $4,000 and $10,000 in $1,000 increments.
13-week or 26-week elimination period
Tax Considerations for Contributions and Benefits
Your firm administrator elects whether contributions are deducted pre-tax or after tax and whether benefits are taxable or non-taxable. The firm can select among four options:
- Pre-tax contributions and taxable benefits of 60% of pre-disability earnings (100% firm paid)
- Pre-tax contributions and taxable benefits of 66 2/3% or pre-disability earnings (100% firm paid)
- After-tax contributions and tax-free benefits of 60% of pre-disability earnings (100% employee paid)
- After-tax contributions and tax-free benefits of 60% of pre-disability earnings (100% firm paid with gross up earnings)
New Employee Waiting Period
For new hires, benefits may start immediately or after a six month waiting period.
The Group Elite LTD plan offers coverage for partial disabilities. Partial disability is defined as losing 20% or more of income due to sickness or injury. This means a plan participant could receive benefits when working part-time. Eligibility is based on the definition of disability applicable at the time of disability and when the decrease in the insured's earnings was effective.
Cash refunds paid by the AICPA Trust, which are paid out of premium refunds received by Prudential, can help lower your firm's costs. Although not guaranteed, participants under the AICPA Group Insurance Trust Life plans have received cash refunds from the Trust, every year without fail since each Plan's inception.
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