Disability Insurance Plan – member booklet

Table of Contents

Introduction

What is the Disability Insurance Plan?

The Disability Insurance (DI) Plan provides a monthly income benefit for employees who are unable to work for a lengthy period of time due to a totally disabling illness or injury which is non-work related. Benefits are paid subject to a 13 week elimination period or the exhaustion of sick leave, whichever is later.

The Plan is administered by Sun Life, hereafter referred to as the Insurer.

A Board of Management for the DI Plan has been established under the National Joint Council (NJC). The Board membership includes a chairperson appointed by the NJC, four employer side, and four bargaining agent side representatives.

The Board is responsible for considering and making recommendations to the NJC on appeals or disputed claims and membership issues; matters related to the financial integrity of the Plan; eligibility rules; Plan design and premium rates.

The complete terms and conditions of the Plan are set out in a contract of insurance between the Treasury Board, represented by the President of the Treasury Board, and the Insurer. In situations where there is conflict between this booklet and the insurance contract, the terms of the contract shall prevail.

Membership

Who is covered by the plan?

The Plan covers persons for whom Treasury Board is the Employer, and who are represented in the collective bargaining process. Represented employees of a number of designated agencies and corporations also participate in the Plan.

Generally speaking, new employees hired on a full-time or part-time basis are covered automatically under this Plan. A full-time employee means a person whose assigned hours of work equal the normally scheduled hours of work for a full-time employee employed in the same occupational group. A part-time employee means a person who is assigned to work more than one third of the normally scheduled full-time hours for his or her occupational group.

Membership is compulsory if you are employed as described below:

  • for an indeterminate period, membership is compulsory from the date of appointment;
  • for a term of more than six months, membership is compulsory from the date of appointment;
  • for a term of six months or less, membership is compulsory from the date you have been continuously employed in the public service for a period of at least six months;
  • as a seasonal employee, membership is compulsory once you have completed six months of continuous active service in any one season. If you continue to be employed on a seasonal basis, coverage continues during subsequent seasons, but is not in force during off-seasons unless you are engaged in some other eligible employment in the public service.

Note:

If you are absent due to illness on the day your insurance would otherwise become effective, your insurance coverage will be postponed until you return to regular active duty.

Who is not covered by the plan?

You are not eligible to participate in the Plan if you are:

  • an employee locally-engaged outside Canada;
  • employed in a managerial or confidential position excluded from collective bargaining;
  • a part-time employee whose assigned hours are one third or less of the normally scheduled full-time hours of work for your occupational group;
  • an employee who has attained 64 years and 9 months of age (such an employee cannot qualify for benefits in the event of a disability).

Eligibility

Who is eligible to receive benefits?

You are eligible to receive benefits for up to 24 months if you become totally disabled (i.e. you are in a continuous state of incapacity due to illness or injury and are prevented from performing the duties of your regular occupation). If, at the end of this 24-month period, you are unable to perform any commensurate occupation for which you are reasonably qualified by training or experience, your benefits would be continued. For the purposes of the Plan, 'commensurate occupation' means one for which the rate of pay is at least 66 2/3 per cent of the current rate for your regular position. Thus, if your disability prevents you from doing your job, and later a commensurate one, the benefits continue for as long as you remain disabled, but not beyond your 65th birthday.

You are not eligible for benefits if your disability:

  • is related to a condition that existed when you became insured - you may contact your departmental Compensation services for information concerning the waiving of this restriction);
  • arises from commission of a felony, self-inflicted injury or attempted suicide;
  • is the result of injury or disease sustained on active duty with any armed force, or from active participation in a riot, rebellion or insurrection;
  • results from an act of declared or undeclared war (this restriction, however, does not apply to persons who become disabled as a result of such an act to which they have been exposed by the performance of duties outside Canada at the direction of the employer).

Note:

If you become disabled, you should consult your departmental Compensation services or the Public Service Pay Centre even if you are unsure whether or not you qualify for benefits.

Coverage and contributions

How much will I pay for coverage?

Each month, you will contribute a specified amount for each $1,000 of your annual insured salary. Your insured salary is your annual salary taken to next highest multiple of $250. For example, if your annual salary is $44,825 at the end of your elimination period, then your insured salary would be $45,000.

Does my employer contribute to the Plan?

Currently, DI premiums are 85% employer-paid; you pay the remaining cost.

Contributing to the plan

How do I make my contributions?

Your premium contribution is normally made by payroll deduction.

Leave of absence

Am I covered during a leave of absence?

Your coverage will continue without interruption during any period in which you are on an authorized leave of absence.

If you are on paid leave, the required premiums will be deducted from your salary in the usual way.

If you are on a leave of absence without pay, the required contributions are payable by deduction from your salary when you return to active duty following cessation of the leave. If your employment terminates following the leave, you will be required to pay the outstanding contributions in a lump sum.

Deductions will be made over a period equal to the period during which you were on leave. The amount payable on return to active duty may include both employer and employee contributions for the period of absence. You will not be required to pay the employer's share of the premium for the first three months of any period of leave without pay or if your department or agency certifies that the reason for your leave was one of the following:

  • illness;
  • related to the birth or adoption of a child and the leave occurs within 52 weeks of the birth or adoption;
  • to undergo training or instruction that would be to the advantage of your employer;
  • to serve with an organization where the service is recognized as being to the advantage of the department or to the government;
  • to serve with certain types of commissions or federal agencies;
  • to serve with the Canadian Forces; or
  • to participate under a leave with income averaging or a pre-retirement leave arrangement.

Termination of coverage

When does my coverage terminate?

Your insurance coverage will cease on the date you cease to be employed or on the date you cease to qualify as an eligible employee or on the date the group policy terminates.

What happens if the group policy terminates?

If, the group policy were to terminate for any reason after your disability commenced, any benefits for which you may be eligible will be paid and will continue to be paid as long as you remain totally disabled.

Submitting a claim

How do I submit a claim?

The Insurer, Sun Life Financial is committed to making prompt and accurate payments of benefits to which you may become entitled. If you become disabled, and you think your disability will last long enough to qualify you for benefits, you should notify your departmental Compensation services or the Public Service Pay Centre immediately. They will provide you with the three forms that are required for you to make a Claim for Disability Insurance (DI): the Employer's Statement form, the Employee's Statement form and the Attending Physician's Statement form.

You, your employer and your doctor (attending physician) must complete these forms as clearly and fully as possible. The onus is on you to provide the Insurer, through these forms, sufficient medical evidence to support your total disability.

Sun Life assesses your entitlement to benefits based on the information in these forms, including the medical evidence provided by you and your doctor. The medical information must be complete, and the findings must be substantiated to the fullest extent possible by test results and clinical findings.

Accordingly, you should ask your doctor to provide a well-documented statement that clearly details the medical evidence supporting the diagnosis and prognosis. Your doctor may wish to supplement the required information on the form with narrative reports and copies of any tests or investigations conducted. It is your responsibility to ensure that your doctor completes the medical statement and that it reaches Sun Life Financial without delay.

If more than one physician is involved in the assessment or treatment of your disabling condition (e.g. medical specialists), you should ask each medical specialist to supply the Insurer with their detailed medical report.

All three completed forms, with supporting documentation, should be with the Insurer two months prior to the end of your elimination period. The elimination period starts on your initial date of disability and ends on the later date of the expiry of your accumulated sick leave or 13 weeks.

Submission before the end of the elimination period gives the Insurer adequate time to advise you of the decision on your claim prior to the first day benefits become payable, and if the claim is approved, payment can be processed on that day. Please note that any omissions or unclear statements in the information provided to the Insurer could result in a delay in assessing your claim.

While it is advised that your claim forms be submitted before the end of your elimination period, it is very important to note that there is a time limit for submitting claims under the contract after which they will not be accepted. The Insurer must receive all three claim forms, and related supporting evidence, no later than 90 days after the end of your elimination period. If you fail to abide by this time limit, you may not be entitled to some or all benefit payments where the delay impedes the Insurer's ability to assess your claim.

If your claim is approved, the Insurer has the right to request additional medical information from your doctor, or arrange for your examination by independent medical specialists (or other service providers), as often as may be reasonably required. Independent consultations allow the Insurer to assess or monitor the course of a disability to ensure that benefits are not being paid to persons who are not eligible or who have recovered to the point where they no longer qualify for benefits.

A Step-by-Step Guide to the Disability Claim Process pamphlet will be made available to you by the Insurer following the receipt of your claim. The pamphlet clearly describes how your DI claim is processed

What if I cannot manage my own affairs?

If you become disabled to the point where you are unable to manage your own affairs, only a limited number of payments can be made without a formal court order authorizing a particular person or agency to act on your behalf. A power of attorney may not suffice for this purpose.

Disability Insurance (DI) claims payments

When do my benefit payments start?

If you become totally disabled, benefits will be paid once you have used all of your sick leave, providing a minimum elimination period of 13 weeks has been met. In most cases, the elimination period consists of a complete absence from work for a minimum period of 13 weeks. In certain circumstances, however, periods of absence due to the same condition for which you are claiming benefits, which occurred within the year immediately prior to the initial date of total disability, can be used in calculating the elimination period. These are special circumstances which must be referred to the Insurer for a decision on an individual basis.

If you are a seasonal employee, the elimination period is applied in a slightly different way because of your special terms and conditions of employment. You should, therefore, consult your departmental Compensation services or the Public Service Pay Centre for details.

What percentage of my income will be replaced if I become disabled?

If you become disabled, your gross annual benefit will be 70 per cent of your insured annual salary on the date of completion of your elimination period. The disability benefit will be 'offset' by other income that you receive for the same disability or a subsequent one.

Are my benefits affected by changes in the cost of living?

Your net benefit (i.e. the amount payable to you after offsets have been applied) will be increased in relation to the cost of living, up to a maximum of 3 per cent.

For example, if the cost of living were to rise by 2 per cent, your net monthly Disability Insurance (DI) benefit of $1,125 would be increased by 2 per cent on the January 1 following the effective commencement date of your benefits to become $1,147.50. If the cost of living were to rise by more than 3 per cent per year, your net monthly DI benefit of $1,125 would be increased by 3 per cent on the January 1 following the effective commencement date of your benefits, to become $1,158.75. See example above.

At the same time, your PSSA and CPP or QPP benefits would also be increased in relation to the rise in the cost of living. No matter what level of increase you receive under those plans, that increase would not be included in the offset against your DI benefits. You would receive the full benefit of escalation under the other plans.

On January 1 of each subsequent year, your DI benefit would be adjusted by further increases in the cost of living to a maximum of 3 per cent. Again, you would receive the full cost of living increase in your PSSA and CPP or QPP benefits without offset.

What are my obligations with respect to my claim?

While you are receiving benefits, you must be under the regular care of a licensed physician and following a course of treatment, which, in the opinion of the Insurer, is appropriate. You must also make every reasonable effort to comply with recommended treatment modalities which may facilitate your return to your employment during the first 24 months of disability or to obtain employment in a commensurate occupation at the end of the 24 months of disability.

Types of income deducted from my Disability Insurance (DI) benefits

What types of income will be deducted?

Disability benefits are designed to supplement disability income and other types of income received from sources such as the Public Service Superannuation Act and disability income under the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP). These deductions are called "offsets". You will receive 70 per cent of your salary in total from all sources for as long you remain eligible for disability benefits.

The following examples illustrate the most common types of income that would be deducted from your Disability Insurance (DI) benefits:

  • benefits you receive under the Public Service Superannuation Act (PSSA);
  • disability benefits you receive, other than benefits payable to or on behalf of your dependants, under the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP);
  • benefits you receive under the Government Employees Compensation Act, or similar benefits under a plan of the federal government or any other government;
  • disability benefits paid or available under another group insurance plan;
  • DI benefits payable under the legislation of any government, such as income replacement benefits under a no-fault automobile insurance plan;
  • amounts received under a third-party damage award.

What types of income will not be deducted?

The following are examples of income that would not be deducted from your Disability Insurance (DI) benefits:

  • increases related to the cost of living under the PSSA, CPP or QPP;
  • return of superannuation contributions where no other pension option is available;
  • benefits received under a purely private and personal insurance policy;
  • severance pay;
  • special lump sum payments associated with employer-sponsored departure incentive programs.

Public Service Superannuation Act (PSSA) offsets under the Disability Insurance Plan are illustrated on a chart included as an Appendix to this booklet.

If you cease to be employed in the public service, please consult your departmental Compensation services or the Public Service Pay Centre prior to opting for a benefit under the PSSA since your choice of PSSA benefit options will affect your monthly DI benefit.

If you receive 'other income' in the form of a lump sum payment in lieu of monthly installments, the monthly installments that you would otherwise have received will be treated as an offset.

Should you consider your medical condition to be 'severe and prolonged', you should apply for CPP or QPP disability benefits and provide Sun Life Financial with documentation concerning your application.

The DI Plan contract stipulates that if the medical evidence indicates that you might be eligible for CPP or QPP disability benefits, Sun Life Financial has the right to reduce your basic monthly DI benefit by the estimated amount of your CPP or QPP entitlement. You may defer this offset by agreeing, in writing, that you will pursue a claim for CPP or QPP benefits and reimburse the DI Plan for any CPP or QPP benefits that are ultimately approved. If you have applied for, and been denied, CPP or QPP benefits but the Insurer thinks you have grounds for a successful appeal, you would be required to continue pursuing your CPP or QPP claim until the conclusion of the appeal process.

If you do not apply for CPP or QPP benefits when requested to do so, your DI benefits can be offset by an estimated amount of your CPP or QPP benefits. This deduction can continue until all avenues of appeal under the CPP or QPP have been exhausted. Ultimately, if you are ineligible for CPP or QPP benefits, the amounts previously withheld would be repaid to you.

Do retroactive salary increases affect the calculation of my Disability Insurance benefit?

In accordance with the Disability Insurance Contract, the retroactive salary increase provision applies only to claimants whose disability commenced on or after .

Any retroactive salary increase approved after the commencement date of your Disability Insurance (DI) benefits will affect your insured salary and benefit level only when the effective date of the increase precedes the date your DI benefits began. Therefore, a retroactive salary increase approved in April, to take effect from February 10, would only be used to adjust benefits if your DI benefits commenced February 11 or later

Are my benefits subject to income tax?

If you qualify for benefits under the Plan, the amount you receive will be subject to income tax. At the end of each year, the Insurer will send you a form indicating the total amount of benefits paid to you during that particular year. Prior to , withholding income taxes from DI benefit payments was an option a Disability Insurance Plan member could select. Effective , the Canada Revenue Agency (CRA) has made it mandatory for income taxes to be withheld from all DI benefits. Therefore the ensurer, in accordance with the Canada Revenue Agency, will automatically deduct income taxes at source. The monthly premiums you pay while you are employed are not tax deductible from earnings. If you become eligible for benefits, the total amount of the premiums you have paid from the time you became a member of the Plan may be deducted for tax purposes from the amount of the disability income you received from the Plan. If the total amount of premiums you have paid under the Plan exceeds the benefits you receive during the first taxation year in which your benefits begin, you can carry over the excess amount to the following year.

Rehabilitation program

What is the Rehabilitation Program?

This is a program designed to assist disabled plan members to regain an acceptable level of employment. The Insurer has a Rehabilitation Unit, with rehabilitation case managers whose staff take an active role in contacting, counseling and assisting Plan members who may be able to re-enter the work force.

A rehabilitation program may be a program of vocational training or a period of work for the purpose of rehabilitation. In either case, it must be approved in writing by the Insurer. Depending on the circumstances, you may be able to engage in such a program for up to 24 months from the end of your elimination period without losing your qualification for benefits.

A number of alternatives can be considered such as modifying the duties of your current position to accommodate your limitations; placing you in a less demanding job suitable to your capabilities; or modifying the conditions of work (e.g. working less than full-time hours for the necessary recovery period). Put into practice, these alternatives may facilitate your return to the workplace. They must, however, be approved in writing by the Insurer as meeting the definition of 'rehabilitative employment'. If, while receiving Disability Insurance (DI) DI benefits, you feel that you are capable and would like to participate in a rehabilitation program, you should contact the Insurer.

How do earnings from rehabilitation employment affect my disability benefits?

Normally, your monthly disability benefits will be offset by earnings you receive from other sources only to the point where your total income while working, together with any benefits you are receiving under the Disability Insurance (DI) Plan, exceeds the insured salary on which your benefit was based. In other words during rehabilitative employment you can earn up to 100% of your pre-disability salary.

What are my responsibilities related to the Rehabilitation Program?

You are required to make every reasonable effort to facilitate recovery from your disability. This includes your full participation in an approved Rehabilitation Program and your acceptance of any reasonable offer of modified duties that your employer can put in place. You must also try to retrain for employment in a commensurate occupation where it is apparent that you will not be able to return to your regular occupation within the first 24 months that you receive disability benefits. The Insurer may withhold or discontinue your benefits if you do not comply with the above conditions.

What if I recover and I become totally disabled again?

If you received disability benefits, recovered from your illness, and then became totally disabled again, the elimination period would be waived if you were back at work on a regular basis for less than:

  • one month, if the two periods of disability are due to unrelated causes;
  • six months, if the two periods of disability are due to related causes;
  • twelve months, if the two periods of disability are due to the same cause.

Appeal process

Can I appeal the decision of the insurer?

If, at any stage of your claim, benefits are not approved and you do not agree with the decision, you may choose to appeal the decision by providing additional information to the Insurer. Your claim, along with any additional information provided, will be reviewed at a more senior level within the Insurer's claim department.

If you disagree with that decision, there are two further levels of appeal available, as outlined below.

Level one

You may request that your claim be reviewed by the Insurer's Group Disability Management Unit comprised of medical doctors and senior claims analysts. This group will review all information available to them and may request, for example, that your condition be evaluated by an independent medical examiner at the Insurer's expense. You will be advised of their decision. At this point, you can decide to accept the decision or proceed to the second level in the appeal process.

Level two

You may, after receiving the decision at the first level of appeal, decide to seek another opinion.. The Plan provides for a second formal level of appeal, in the form of an independent review, conducted by the Disability Insurance (DI) Plan Board of Management. If you or your representative wishes to have your claim reviewed by the Board, you should write to:

The Secretary
Disability Insurance Plan Board of Management
National Joint Council
C. D. Howe Building, West Tower
7th Floor, 240 Sparks Street
P.O. Box 1525, Station B
Ottawa, ON
K1P 5V2

You will be asked to complete an Authorization to Release Information form, which will permit your file to be reviewed by the Board.

Privacy and protection of personal information

Who can access personal information related to my claim?

Personal information, used to adjudicate your claim for Disability Insurance (DI) benefits, is held on file at Sun Life Financial Assurance Company.  Authorized employees or other persons working for or on behalf of Sun Life are allowed access to the information in the file while performing their duties, as outlined above. You have the right to access and, if necessary, correct the information on file. You must make any such request to Sun Life Financial in writing.

Contact information

Who can I call for more information?

Your departmental Compensation services or the Public Service Pay Centre can provide you with further information on conditions of membership, application procedures, commencement, continuation, termination or cancellation of coverage and claim procedures

How can I contact the insurer?

You can contact Sun Life Assurance Company by calling their toll free telephone number, 1-800-361-5875, toll free fax number 1-866-639-7849 or by writing to them at the following address:

Montreal Group Disability Management Office
Federal Government Disability Insurance Plan
Sun Life Assurance Company of Canada
P.O. Box 12500, Station CV
Montreal, Quebec H3C 5T6

To speed up the handling of your claim you should quote the group policy number (12500), your name, your employing department or agency and your certificate number.

Appendix A – Disability Insurance (DI) Plan Premium Rate Effective

Date:

To: Compensation Managers, Heads of Human Resources, Participating Employers

The purpose of this notice is to inform plan members and employers participating in the Disability Insurance (DI) Plan of a premium rate change, effective .

DI Premium Rate Increase

Each year, the DI Board of Management reviews the financial operation of the Plan.  Based on this review, the Board, through the National Joint Council (NJC) Executive, makes a recommendation to the President of the Treasury Board regarding the premium rate necessary to ensure that the plan is financially sound and continues to operate in the best interest of plan members.

Effective , the new approved premium rate is $1.93 per $1,000 of insured salary.

The cost sharing ratio is 85% employer paid and 15% employee paid.

Please ensure that all members of the Plan are provided with a copy of this bulletin.

Administrative Information

Participating employers with their own pay facilities are required to ensure that premiums remitted to Sun Life, effective are done so in accordance with the information in this notice.

Enquiries about the DI Plan

Employees with questions about their coverage under the DI Plan should contact their compensation advisor.

Should you have any questions regarding this notice, please contact Treasury Board of Canada Secretariat, Pensions and Benefits Sector at Contact the Pensions and Benefits Sector by email: pbs-spas@tbs-sct.gc.ca.

Bayla Kolk
Assistant Deputy Minister
Pensions and Benefits Sector

Appendix B – Treatment of Benefits Payable Under the Public Service Superannuation Act as Offsets from Disability Insurance Benefits

Treatment of Benefits payable under the Public Service Superannuation Act (PSSA) as Offsets from Disability Insurance (DI) Benefits
Circumstance PSSA Option Offset from DI Plan
I. Termination with less than 2 years service
  • 1. Return of contributions
  • 1. No offset
II. PSSA disability retirement approved
  • 1. Immediate annuity

    or

  • 2. Lump sum payment
  • 1. Offset immediately in full monthly amount
  • 2. Offset immediately by amount equal to monthly immediate annuity until full amount of lump sum has been offset
III. PSSA disability retirement applied for but not approved
  • 1. Deferred annuity at age 60
  • 2. Annual allowance from age 50 onwards
  • 3. Transfer value
  • 4. Return of contributions
  • 1. Offset at age 60
  • 2. Offset when payable
  • 3. & 4. Monthly offset at age 60 by amount equal to monthly deferred annuity but capped when total of transfer value or lump sum has been offset
IV. Application for PSSA disability retirement not made
  • 1. Immediate annuity
  • 2. Deferred annuity at age 60
  • 3. Annual allowance from age 50 onwards
  • 4. Actuarial transfer value
  • 5. Return of contributions
  • 1. Offset immediately by full monthly amount
  • 2., 3., 4., & 5. Offset immediately by monthly amount of equivalent immediate annuity unless claimant proves that an application for a disability retirement had been declined; capped when total of actuarial transfer value or return of contributions has been offset
  • Where such proof is provided, offsets as in III above

Appendix C – Example of a benefit calculation

Example of a benefit calculation
1. Annual salary at end of elimination period is $44,825
2. Insured salary (annual salary taken to next highest multiple of $250) would be $45,000
3. Gross annual DI benefit is 70 per cent of insured salary = (0.70 multiplied by $45,000), which is $31,500
4. Less other income you are receiving during the year
ex: PSSA $10,000
CPP disability benefit $8,000
Total other income $18,000
5. Gross annual DI benefit $31,500
Less other income $18,000
Net annual DI benefit $13,500
6. Amount of monthly DI payments ($13,500 divided by 12) would be $ 1,125
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