Premium Waiver while on LTD

[Guest NPWA]

I think I've gathered the answer to this question from previous posts, but would very much appreciate the group's wisdom on the following scenario:

An employee on LTD applies for and receives a premium waiver under the group-term life insurance policy. While the employee is still on LTD, the employer switches group-term life insurance carriers.

It's my understanding the the carrier which granted the premium waiver ("old carrier") remains responsible for this employee's coverage. Is that correct?

I'm in the process of getting a copy of the contract with the old carrier to confirm, but can anyone confirm that this is generally how it works?

Many, many thanks and happy holidays,

Julie

[KIP KRAUS]

You are correct. The carrier that granted the waiver is on the hook. Typically when a group policy has a disability waiver of premium the rates are loaded for this possible libility.

[mroberts]

Agreed.

[Mary C]

You will need to read the contract. We have a self-insured waiver of premium, whereby the company continues to pay the premium due as long as the participant meets the carrier's definition of disabled. All insurance forms, approval letters, etc. refer to it as "waiver of premium." To the employee the continuation is identical to a fully insured waiver of premium, but it really isn't. The advantage to us is that by self-insuring the disability continuation, we have lowered our premium overall. The advantage to the carrier is that if we should switch carriers, our disableds go with us to the new carrier.

[401 Chaos]

I have a similar but not exact situation and am hoping someone with general experience with this could be of assistance.

Employer has GTLI plan / policy that they've had for many years. Long-time employee covered under the plan has serious (likely terminal) medical issues and has been out of work on short-term disability for the last few weeks. The employer is considering switching insurers effective for 2013 but is concerned about coverage for the individual out on disability. She is unlikely to return to work at all but particularly unlikely to return by the January 1 effective date of the new policy. The old GTLI policy has a waiver of premium provision but it does not appear to kick in until an individual has been totally disabled (under the terms of the plan for at least 6 months). Based on the current prognosis, the employee is likely headed for just that sort of situation but has not been disabled for 6 months (and will not have met the 6-month threshold by January 1st. The new insurer has asked for a census of all employees out on disability, etc. and indicated the employee would not be considered actively at work and so not covered under the new policy.

What is the status of this employee. Could she possibly come within the waiver of premium classification even though she has not yet hit the 6-month threshold?