DIPNC benefits may begin after a mandatory 60-calendar-day waiting period. The first day of the 60- day waiting period will be the later of the following:

• The day after the last day of actual service, provided the physician certifies that the employee is disabled as of the last day of actual service; or
• The day the disabling event occurred, as certified by the physician, if the disabling event occurred on a day later than the last day of actual service, provided the employee was in a pay status by the exhaustion of leave through that date (If the employee was not in a pay status on the day of the disabling event, he or she would not be considered to be in service and would not be eligible for short-term disability payments.); or
   
• The day the disabling event occurred, as certified by the physician, if the disabling event occurred on a day other than a normal workday, for example, a Saturday or Sunday, or for public school teachers, a day during the summer months; or
   
• The day following at least 365 calendar days of employment as a teacher or state employee. For example, if an employee is first employed on January 1, 2017, and is certified as disabled on December 20, 2017, the waiting period would begin on January 1, 2018.

If an employee returns to service in any capacity for any part of a given day during the waiting period for intervals of not more than five continuous workdays, the waiting period is extended by the number of days he or she returned to service. A return to service for more than five continuous workdays will cause a new waiting period to begin.

During the waiting period, an employee may elect to exhaust any accumulated sick leave, vacation leave, or other salary continuation program provided by the employer. Since human resources policies differ for state employees, public school employees, university employees, community college employees, etc., you should consult your HR manual for the exhaustion of leave policy for your agency.

The provisions governing DIPNC do not require employees to exhaust all accumulated leave before benefits begin. The exhaustion of leave does not change the onset of disability or the beginning of the waiting period. If an employee does not have sufficient leave to cover the waiting period, he or she is considered to be in a leave-without-pay status. Retirement contributions should be withheld on any salary paid during this period or for as long as leave is exhausted, or salary continuation continues.

Short-term disability benefits are payable by the employer beginning on the 61st day of disability, or the day after the extended waiting period if the 60-day waiting period has been extended by trial rehabilitation and for as long as the employee continues to meet the definition of disability, up to 365 days. It is the responsibility of the employer and the employee’s physician to determine if the employee is eligible.

An employee is eligible for short-term disability payments if he or she meets all of these requirements:

• Has at least one year of contributing membership service in TSERS earned within the 36 calendar months preceding the disability 
  (The minimum periods of membership service required before a participant becomes eligible for disability benefits include membership service in LRS or CJRS added to membership service in TSERS)
• Applies within 365 days of the start of the waiting period
• Is found to be mentally or physically disabled for the further performance of his or her usual occupation
• Has a disability that has been continuous and was incurred during the time of active employment

First determine if the disability is of a temporary nature or if the disability is expected to be a permanent long-term disability. A temporary disability should be handled as follows:

Form 701 (Requesting Short-Term Benefits Through the Disability Income Plan of North Carolina)

This form should be completed by or on behalf of the employee and submitted directly to you when a disability extends beyond  60 days. Form 701 should be submitted immediately after 90 days of disability, or upon termination of the disability if the disability ended after the 60th day but before the 90th day.

Please discuss Guides A through H on Form 701 with the disabled employee. These guides are provided to assist you and the member in understanding the processes and decisions involved in applying for short-term disability benefits.

Form 701

Form 700 (Requesting Employer Information Required for Member Disability Income Plan Benefits)

Sections A, B and C should be completed by you to provide certification of information necessary to process short-term disability benefits.

Form 700

Form 703 (Reporting Earnings for Short-Term Disability Benefits and Medical Report for Eligibility Review

This form should be submitted to you on the first day of each calendar month during the waiting period and during the short-term period.

Form 703

At this point, you are in a position to make the disability determination based upon the doctor’s statement of disability on Form 703. If you are unable to determine disability at this point, you may ask the Retirement Systems Division to make a determination of disability for short-term benefits. The employee also has the right to request that the Retirement Systems Division make the final determination if the employer has already determined that the employee does not qualify for short-term benefits. If the Retirement Systems Division is requested to make a determination of disability, Form 701 should be submitted to the Retirement Systems Division along with Form 700, Form 7A (Medical Report for Disability Eligibility Review) must be completed by a licensed physician, supporting medical documentation, a job description and any forms that have already been completed.

In making the determination of short-term disability, the DIPNC Medical Review Board will approve disability only through the date the physician signed the Form 703. If the employee continues to be disabled, additional Forms 703 should be completed by the physician and submitted to you to authorize continued payments. Short-term disability benefits should not be paid beyond the date the physician signs Form 703 for temporary disabilities. A statement by the attending physician signed on a particular date indicating that the temporary disability is expected to last for a set number of months is not sufficient authorization for payment of short-term disability benefits beyond the date the physician signed the certification. Form 703 should be submitted at 30-day intervals until the disability ends or the 365-day short-term disability period after the 60-day waiting period is exhausted.

Payments should always be issued on a retroactive basis.

If the disability is expected to be permanent, you should request a preliminary long-term determination by the Retirement Systems Division as soon as the disability appears to be permanent. 

A preliminary approval for long-term disability may be requested regardless of whether the employee actually meets the eligibility requirements for long-term benefits. If this determination is approved by the Retirement Systems Division, you may then pay short-term disability benefits prospectively for the balance of the short- term disability period without requiring further medical certification from the attending physician. 

A preliminary approval for long-term disability benefits still requires that the employee apply for long-term disability benefits and that the Retirement Systems Division make a determination of eligibility for long-term disability benefits at the conclusion of the short-term disability period.

The amount of the short-term disability benefit payable is equal to half of one month’s portion of the annual base rate of compensation last paid to the employee before the beginning of the short-term disability period, plus half of one month’s portion of the annual longevity payment to which he or she may be entitled, up to a maximum of $3,000.00 per month. The payment is reduced by any monthly payment provided by the North Carolina Worker’s Compensation Act if based on any disability incurred during the same period of state employment as the disability for which the member is receiving the disability benefit, except payments for a permanent partial disability rating. The monthly benefit is further reduced by any monthly payments from the federal Veterans Administration or any other federal agency, or payments under the provisions of General Statutes section 127A-108 to which the employee may be entitled if these payments are the result of the same disability.

Any benefits actually paid during the first six months after the date of disability are subject to FICA (Social Security) taxes. Payments made more than six months after the last calendar month in which the employee worked are not subject to FICA taxes. For example, if an employee last worked in December 2017, any short-term disability payments made before June 30, 2018, would be subject to FICA taxes. If for some reason, no payment was actually made to the employee until July 2018, no Social Security taxes should be withheld.

Short-term benefits paid to employees who had five or more years of maintained service as of August 12, 1989, are not subject to North Carolina income tax. Employees who do not have five years of maintained service as of August 12, 1989, will be required to pay state income tax on their benefits. Short-term benefits are subject to federal income tax.

The base rate of compensation is the regular monthly rate of compensation, not including pay for shift premiums, overtime, or other types of extraordinary pay. For public school employees, the base rate of compensation includes any locally paid salary supplement or any coach’s supplement. The base rate of compensation is the compensation which was last paid to the employee before the beginning of the short-term disability period.

Form 711 (Determining and Recording Short-Term Disability Benefits) should be used by you to calculate the short-term disability benefit and to record the benefit paid each month during the short-term period.
This form includes space to enter identifying information regarding the disabled employee and instructions to determine the gross monthly benefit amount.

The total compensation (base rate, longevity, and supplement, if any) upon which the short-term disability benefit is calculated may be increased by the TSERS Board of Trustees by any percentage across-the-board salary increase granted to employees of the state by the N.C. General Assembly. The Retirement Systems Division will notify each employer of the amount and the effective date of any across-the-board increase.

Public school employees sometimes receive salary increases that are different from those of state employees. In these cases, the compensation upon which the disability benefit is calculated may increase by the percentage applicable to state employees. You should not attempt to adjust an employee’s benefit until you have received notification from the Retirement Systems Division of the amount of the increase.

During the short-term disability period, employees are permitted to earn up to the amount of the short-term benefit without reduction in the benefit. Any gross earnings during this period should be reported on Form 703 under Section C.

An employee may return to service for trial rehabilitation for periods of not more than 40 continuous days of service during the 365-day short-term disability period. Trial rehabilitation is a return to service in the same capacity that existed before the disability. The period of trial rehabilitation does not extend the short-term disability period.

Under current law, an employee in receipt of short-term disability benefits who has at least five years of retirement membership service earned as a teacher or state employee is eligible for individual State Health Plan coverage under the non-contributory plan (currently 70/30 Plan or Medicare Advantage Base Plan). The State Health Plan coverage is provided to the eligible employee through the active group during the short-term disability period. The following rule should be used at the time the employee receives an extended short-term disability benefit, a long-term disability benefit or retires on a service retirement at the conclusion of the short-term disability benefit period.

 

Information about enrollment in the State Health Plan retiree group coverage will be sent to members who have applied for extended short-term disability, long-term disability or retirement benefits who have at least five years of retirement membership service earned as a TSERS employee.

Form 714 (Requesting Service Credit for the Short-Term Period) should be filed by you to grant appropriate service credits to employees who are receiving short-term disability benefits. 

Once the employee has returned to work after the short-term disability period, you may submit Form 714 requesting Service Credit for the Short-Term disability period.