ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT LONG-TERM DISABILITY POLICY
Effective Date of Change: 1/1/96
SECTION 1 - POLICY SPECIFICATIONS
1. Description of Eligible Classes
Full-time management (non-union) employees following completion of one
year of service.
2. Amounts of Insurance
a) 60% (benefit percentage) of basic monthly earnings not to exceed the
maximum monthly benefit, less other income benefits, as described in
Section IV.
b) The maximum monthly benefit is $3,000 for benefits that commenced
prior to January 1, 1996. Effective January 1, 1996, the maximum
monthly benefit is $5,000.
3. Maximum Benefit Period
Disabled before age 62: To earlier of 65th birthday or according to
schedule:
Years of Service Duration of Benefits
at Disablement (in Years)
Less than 1 N/A
1 - 2 1
2 - 5 2
5 - 10 5
10 or more to age 65
Disabled at or after age 62:
Age at Duration of Benefits
Disablement (in Years)
62 3-1/2
63 3
64 2-1/2
65 2
66 1-3/4
67 1-1/2
68 1-1/4
69 1
4. Definition of Basic Monthly Earnings
"Basic monthly earnings" means the insured's monthly rate of earnings
from the employer in effect immediately prior to the date total
disability begins. It does not include bonuses, overtime pay and other
special compensation.
5. Minimum Requirement for Active Employment: 30 hours per week.
6. Elimination Period
Later of 180 days or after expiration of employee's sick time.
7. Waiting Period
a) Active employees with one year or more of employment as of January 1,
1984: None.
b) All other employees: Completion of one year of employment.
8. This policy shall cover all management employees of Orange and Rockland
Utilities, Inc. and its subsidiaries, Rockland Electric Company, Pike
County Power and Light, Clove Development, Inc. and Orange and Rockland
Energy Development.
9. Continuation of Employee Insurance During Absences
Type of Absence Time Limit
Temporary Layoff To the end of the policy
or Leave of Absence month following the policy
month in which the layoff
or leave of absence begins.
SECTION II - DEFINITIONS
For the purposes of this policy:
"Active employment" means the employee must be working:
1. for the employer on a permanent full-time basis and paid regular
earnings:
2. at least the minimum number of hours shown in the policy
specifications; and either
3. at the employer's usual place of business; or
4. at a location to which the employer's business requires the employee
to travel.
"Basic monthly earnings" - As defined in the policy specifications.
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"Certificate" means a written statement prepared by the Company including all
riders and supplements, if any, setting forth a summary of:
1. the insurance benefits to which an employee is entitled;
2. to whom the benefits are payable; and
3. limitations or requirements that may apply.
"Complications of pregnancy" means pregnancy complicated by concurrent disease
or abnormal conditions significantly affecting usual medical management.
"Disability benefits," when used with the term Retirement Plan, means money
which would be payable under Section 5 of the Employees' Retirement Plan of
Orange and Rockland Utilities, Inc. or under the Officers' Supplemental
Retirement Plan of Orange and Rockland Utilities, Inc.
"Company" shall mean Orange and Rockland Utilities, Inc. and its subsidiaries
as shown in Section 1.8.
"Eligibility date" means the date an employee becomes eligible for insurance
under this policy. Classes eligible are shown in the policy specifications.
"Elimination period" means a period of consecutive days of total disability
for which no benefit is payable. The elimination period is shown in the
policy specifications and begins on the first day of total disability.
NOTE: IF TOTAL DISABILITY STOPS DURING THE ELIMINATION PERIOD FOR ANY
14 (OR LESS) DAYS THAN THE TOTAL DISABILITY WILL BE TREATED AS
CONTINUOUS. BUT DAYS THAT THE INSURED IS NOT TOTALLY DISABLED
WILL NOT COUNT TOWARD THE ELIMINATION PERIOD.
"Employee" means a person in active employment with the employer.
"Evidence of insurability" means a statement or proof of an employee's medical
history upon which acceptance for insurance will be determined by the Company.
"Grace period" is the 31 days following a premium due date during which
premium payment may be made.
"Injury" means bodily injury resulting directly from an accident and
independently of all other causes. The injury must occur and total disability
must begin while the employee is insured under this policy.
"Insured" means an employee insured under this policy.
Male pronoun whenever used includes the female.
"Monthly benefits" means the amount payable by the Company to the disabled
insured.
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"Physician" means a person who is:
1. operating within the scope of his license; and either
2. licensed to practice medicine and prescribe and administer drugs or
to perform surgery; or
3. legally qualified as a medical practitioner and required to be
recognized, under this policy for insurance purposes, according to
the insurance statutes or the insurance regulations of the governing
jurisdiction.
It will not include an employee or his spouse, daughter, son, father,
mother, sister or brother.
"Policy specifications" is the document showing the eligible classes, the
amounts of insurance and other relevant information pertaining to the plan of
insurance applied for by the policyholder. This document, designated
Section 1, is attached to and is part of this policy.
"Retirement benefits," when used with the term Retirement Plan, means money
which is payable as a normal, early or disability retirement under the terms
of the Employees' Retirement Plan of Orange and Rockland Utilities, Inc. or
the Officers' Supplemental Retirement Plan of Orange and Rockland Utilities,
Inc. as defined in those plans.
"Retirement Plan" shall mean both the Employees' Retirement Plan of Orange and
Rockland Utilities, Inc. or the Officers' Supplemental Retirement Plan of
Orange and Rockland Utilities, Inc. as amended from time to time.
"Sickness" means illness or disease. It will include pregnancy unless
excluded in the General Exclusions section of this policy. The total
disability must begin while the employee is insured under this policy.
"Total disability" and "totally disabled" mean that because of injury or
sickness:
1. the insured cannot perform each of the material duties of his
regular occupation; and
2. after benefits have been paid for 24 months, the insured cannot
perform each of the material duties of any gainful occupation for
which he is reasonably fitted by training, education or experience.
"Waiting period," as shown in the policy specifications, means the continuous
length of time an employee must serve in an eligible class to reach his
eligibility date.
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SECTION III - EFFECTIVE DATES OF INSURANCE
1. Insurance will be effective at 12:01 a.m. on the employee's eligibility
date, but only if the employee's written application for insurance is:
a) made with the Company through his supervisor; and
b) on a form satisfactory to the Company.
SECTION IV - BENEFITS
TOTAL DISABILITY
When the Company receives proof that an insured is totally disabled due to
sickness or injury and requires the regular attendance of a physician, the
Company will pay the insured a monthly benefit after the end of the
elimination period. The benefit will be paid for the period of total
disability if the insured give to the Company proof of continued:
1. total disability; and
2. regular attendance of a physician
The proof must be given upon request and at the insured's expense.
The monthly benefit will not:
1. exceed the insured's amount of insurance; nor
2. be paid for longer than the maximum benefit period.
The amount of insurance and the maximum benefit period are shown in the policy
specifications.
MONTHLY BENEFIT
To figure the amount of monthly benefit:
1. Multiply the insured's basic monthly earnings by the benefit percentage
shown in the policy specifications.
2. Take the lesser of the amount:
a) determined in step (1) above; or
b) of the maximum monthly benefit shown in the policy specifications;
and
c) deduct other income benefits, shown below, from this amount.
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OTHER INCOME BENEFITS
Other income benefits means those benefits shown below.
1. The amount for which the insured is eligible under:
a) Workers' or Workmens' Compensation Law;
b) Occupational disease law; or
c) any other act of law of like intent.
2. The amount of any disability income benefits for which the insured is
eligible under any compulsory benefit act or law.
3. The amount of any disability income benefits for which the insured is
eligible under:
a) any other group insurance plan of the employer;
b) any governmental retirement systems as a result of his job with the
employer.
4. Benefits Cease at Voluntary Retirement
The amount of benefits the insured receives under the Retirement Plan as
follows:
a) any disability benefits;
b) any retirement benefits received because the retirement plan compels
their receipt, not because the insured voluntarily elects them. (The
monthly benefit ceases when the insured voluntarily elects retirement
benefits.)
5. Primary/Family
The amount of disability or retirement benefits under the United States
Social Security Act, or any similar plan or act, as follows:
a) disability or unreduced retirement benefits for which:
i. the insured is eligible; and
ii. his spouse, child or children are eligible because of his
disability; or
iii. his spouse, child or children are eligible because of his
eligibility for unreduced retirement benefits; or
b) reduced retirement benefits received by:
i. the insured; and
ii. his spouse, child or children because of his receipt of the
reduced retirement benefits.
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These other income benefits, except retirement benefits, must be payable
as a result of the same total disability for which this policy pays a
benefit.
Benefits under item 5.a above will be estimated if such benefits:
1. have not been awarded; and
2. have not been denied; or
3. have been denied and the denial is being appealed.
The monthly benefit will be reduced by the estimated amount. But these
benefits will not be estimated provided that the insured:
1. applies for benefits under item 5.a; and
2. requests and signs the Company's Agreement Concerning Benefits.
This agreement states that the insured promises to repay the Company any
overpayment caused by an award received under 5.a.
If benefits have been estimated, the monthly benefit will be adjusted
when the Company receives proof:
1. of the amount awarded; or
2. that benefits have been denied and the denial is not being appealed.
In the case of 2, above, a lump sum refund of the estimated amounts will
be made.
"Law," "plan," or "act" means the initial enactment and all amendments.
6. Benefits payable under the Executive Group Long-Term Disability Plan:
The amount an insured is eligible to receive from the Executive Group
Long-Term Disability Plan. This paragraph may result in no benefits
being paid pursuant to this policy.
COST OF LIVING FREEZE
After the first deduction for each of the other income benefits, the monthly
benefit will not be further reduced due to any cost of living increases
payable under these other income benefits.
LUMP SUM PAYMENTS
Other income benefits which are paid in a lump sum will be prorated on a
monthly basis over the time period for which the sum is given. If no time
period is stated, the sum will be prorated on a monthly basis over the
insured's expected lifetime as determined by the Company.
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TERMINATION OF THE MONTHLY BENEFIT
The monthly benefit will cease on the earliest of:
1. the date the insured ceases to be totally disabled;
2. the date the insured dies;
3. the end of the maximum benefit period;
4. the date the insured receives retirement benefits under the Retirement
Plan due to his voluntary election to receive such benefits, unless:
a) the periodic payment is less than 2.6% of the insured's gross monthly
benefit; or
b) the lump sum payment is less than three times the insured's gross
monthly benefit.
"Gross monthly benefit" means the insured's benefit amount before any
reduction for other income benefits.
RECURRENT DISABILITY
"Recurrent disability" means a disability which is related to or due to the
same cause(s) of a prior disability for which a monthly benefit was payable.
A recurrent disability will be treated as part of the prior total disability
if, after receiving total disability benefits under this policy, an insured:
1. returns to his regular occupation on a full-time basis for less than six
months; and
2. performs all the material duties of his occupation.
Benefit payments will be subject to the terms of this policy for the prior
total disability.
If an insured returns to his regular occupation on a full-time basis for six
months or more, a recurrent disability will be treated as a new period of
total disability. The insured must complete another elimination period.
If an insured becomes eligible for coverage under any other group long-term
disability policy, this recurrent disability section will cease to apply to
that insured.
REHABILITATIVE EMPLOYMENT/ALTERNATE WORK PROGRAM
"Rehabilitative employment" means work in any gainful occupation, other than
an insured's regular occupation, for which he is reasonably fitted by
training, education, or experience.
Compensation received while performing duties on a Company sponsored Alternate
Work Program will go towards reducing an employee's benefit under this policy.
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GENERAL EXCLUSIONS
This policy does not cover any total disability due to:
1. war, declared or undeclared, or any act of war;
2. intentionally self-inflicted injuries;
3. active participation in a riot.
PRE-EXISTING CONDITION EXCLUSION
This policy will not cover any total disability;
1. caused by, contributed to by, or resulting from a pre-existing condition;
and
2. which begins in the first 12 months after the insured's effective date.
A "pre-existing condition" means a sickness or injury for which the insured
had received medical treatment, consultation, care or services including
diagnostic measures, or had taken prescribed drugs or medicines in the three
months prior to the insured's effective date.
MENTAL ILLNESS LIMITATION
Benefits for total disability due to mental illness will not exceed 24 months
of monthly benefit payments unless the insured meets one of these situations:
1. The insured is in a hospital or institution at the end of the 24 month
period. The monthly benefit will be paid during the confinement.
If the insured is still totally disabled when he is discharged, the
monthly benefit will be paid for a recovery period of up to 90 days.
If the insured becomes reconfined during the recovery period for at least
14 days in a row, benefits will be paid for the confinement and another
recovery period up to 90 more days.
2. The insured continues to be totally disabled and becomes confined:
a) after the 24 month period; and
b) for at least 14 days in a row.
TIME OF PAYMENT OF CLAIMS
When the Company receives proof of claim, benefits payable under this policy
will be paid monthly during any period for which the Company is liable.
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PAYMENT OF CLAIMS
All benefits are payable to the employee. But if a benefit is payable to an
employee's estate, an employee who is a minor, or an employee who is not
competent, the Company has the right to pay up to $1,000 to any of the
employee's relatives whom the Company considers entitled. If the Company pays
benefits in good faith to a relative, the Company will not have to pay such
benefits again.
WORKERS' OR WORKMENS'S COMPENSATION
This policy is not in lieu of, and does not affect, any requirement for
coverage by workers' or workmen's compensation insurance.
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