Long term Disabilty

I have a plan that has 2 participants an owner and employee. The employee was on long term disability for the prior plan year and subsequently fired for refusing to come back to work. He received a w-2 for the month he was still "employed" reflecting his long term disability payment. The software is including him in the profit sharing allocation. Are LTD payments included in 415 compensation? the plans compensation is defined as 415 excluding post severence payments.