If your pastor experienced a serious disability and became unable to work, does he have a financial safety net? What about the impact to your church as you make decisions about helping your pastor and his family?
In the US, about one in seven people ages 35-65 may become disabled for five years or longer. The Council for Disability Awareness states that one in three working Americans do not have adequate disability insurance. In fact, some experts believe most Americans are financially better prepared to die than to have a disability. During your working years, the chances of a disability may be three to five times higher than the likelihood of dying during those years. *
Insurance for Your Pastor’s Paycheck:
Long-term Disability Coverage is a safety net in the event your pastor is unable to work due to a serious illness or injury. You can think of LTD coverage as insurance for your pastor’s paycheck.
Does your pastor’s health plan include Long Term Disability coverage?
Alliance Benefits offers two versions of the health plan package: Premium and Standard.
Benefits Strategy Tip:
Did you know that it may be to your employees’ advantage if the employee pays the $10 per month premium for Long Term Disability coverage, rather than the employer paying it? Many of our churches pay 100% of the health plan package for employees. This is a wonderful benefit, but it may be a good idea to ask employees to pay the $10 per month LTD premium.
If an employee files a Long-Term Disability claim, your church will be asked whether the premium was employee-paid or employer-paid. Here’s the difference to the employee:
Payroll Processing Tips:
For employee-paid portions of benefit costs, some items can be withheld pre-tax, to benefit the employee by reducing taxable income, while other items must be withheld after tax.
When to Report a Disability:
Employers or employees: if you feel that a disability is becoming evident, please contact Alliance Benefits as soon as you know there is a problem. It’s fine if the church continues paying the employee after they stop working, but you must contact Alliance Benefits if the person stops physically working. Sometimes employers inadvertently jeopardize benefits by waiting too long to notify Alliance Benefits.
We can help you review each situation and make you aware of applicable rules.
Good to know – here’s a quick refresher on basic LTD information:
It can take weeks to file a claim, so contact Alliance Benefits early to review benefits and discuss the claims process. Every situation is a little different, so it’s helpful to call and discuss specifics!
Sources for quoted statistics:
Beth joined Alliance Benefits in January 2001. In her role as Benefits Consultant, she focuses on building relationships with churches and districts, and assisting with Health Plan and 403(b) questions. She is assigned to serve the churches and districts in the Western and Southern US, and the multi-cultural districts.