Delta pilots due have the option to purchase additional disability insurance through the union that is untaxed. Disability insurance tax status is based on how much the individual contributes to the cost. In the case of Delta it's 100% company funded so the IRS taxes it. The UAL plan is partially funded by the UAL pilots at a level that meets the IRS requirement for no taxes. Theory being you paid for the benefit with taxed income so should not be taxed again.

 

Our (Atlas) plan has the option to either impute the contribution which makes the benefit tax free, or have it 100% company paid and the benefit is taxed. Does Delta have that option?

 

I see what you mean now. So in essence, its only a different way of calculating the benefit, the FAE to be more accurate, for those within the first 365 days of employment. So before they got this new calculation, that first year pilot would only get 50% of whatever they may have made when going on disability. Whereas now, they get to pretend they made 1,000 time their pay rate when calculating their FAE.

If I understand, your company provided LTD benefit has a 6 month waiting period which can be covered by your sick time and STD. Then go on their LoL until month 24, then on their LTD until age 65? How is the benefit amount calculated? Is there a cap on the benefit amount? Are there any offsets? What percentage of premiums of the company provided benfit do you pay? Do you get any pension credit or contributions while on LTD?

This is a good point as well. APA is lifetime for mental illness and 60 months for substance abuse. And they have an imputed income option on their LTD benefit as well.