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FCMM Adds Long Term Disability Insurance

Date: April 24, 2013

Affordable group long term disability (LTD) insurance is available for churches to provide this coverage to their staff members through FCMM.

As a first step in fulfilling its expanded mission as the benefits provider for EFCA churches, FCMM has acquired the Long Term Disability Insurance program previously administered by EFCA Pastoral Care Ministries since 2000. For churches currently enrolled in the program, there will be no changes other than the sponsorship and billing name.

LTD insurance is intended to ensure continuation of a portion of a staff member’s salary should a disability occur. The participating local church can be assured of providing best-practice coverage to meet such a life-crisis need.

Why is the FCMM plan a good benefit for churches?

  • The program has been put together recognizing the unique circumstances of church compensation. For example, unless a church specifically negotiates LTD coverage to include the clergy housing allowance as part of the salary total, most carriers will not consider housing allowance in the salary base. The result would be a sizable reduction in the amount of the disability benefit payable.
  • In addition, the FCMM plan is structured to cover “own occupation” disability for up to three years, rather than the more restrictive “any occupation” definition.

Difference between an Employee Benefit and Payroll Deduction: The church providing the LTD benefit must choose whether to offer the coverage as an employee benefit (premiums paid out of the church budget) or a payroll deduction (employee pays the premium by having the amount deducted from paycheck and sent by the church for the group).

If structured as a benefit, should a covered person become disabled, benefits are paid as taxable income. If LTD premiums are structured as payroll deduction, should a covered person become disabled, benefits are paid as non-taxable income.