How FedEx LTD Works
Understanding Long-Term Disability benefits under the CBA
How FedEx LTD Works
FedEx provides Long-Term Disability (LTD) insurance to pilots as specified in the CBA. This benefit is designed to replace a portion of your income if you become unable to work for an extended period.
The Basics
What is LTD?
LTD insurance provides monthly income if you become disabled and cannot perform your job duties as a pilot. Unlike short-term solutions like sick banks, LTD is designed for extended disabilities.
Coverage Levels (CBA Section 27.J.2)
| Duration | Benefit Level |
|---|---|
| Months 1-24 | 60% of monthly earnings |
| Months 25+ | 50% of monthly earnings |
How Benefits Are Calculated (CBA Section 27.J.6)
Your LTD benefit is based on:
"The 12 highest consecutive months out of the 36 consecutive months preceding the disability period"
Calculation steps:
- Identify your highest 12 consecutive months of earnings in the 36 months before disability
- Divide by 12 to get monthly earnings
- Multiply by 60% (months 1-24) or 50% (months 25+)
- Cap at IRS 401(a)(17) limit
Example:
- Highest 12-month period: $380,000
- Capped at 401(a)(17) limit: $350,000
- Monthly earnings: $350,000 ÷ 12 = $29,167
- Months 1-24 benefit: $29,167 × 60% = $17,500/month (capped at $17,500)
- Months 25+ benefit: $29,167 × 50% = $14,583/month
See Benefit Calculation Guide for complete details.
Definition of Disability
Own Occupation (First 24 Months)
For the first 24 months, you're considered disabled if you cannot perform the material duties of your own occupation as a pilot.
Any Occupation (After 24 Months)
After 24 months, the definition changes. You're considered disabled only if you cannot perform any occupation for which you're reasonably qualified by education, training, or experience.
When Does LTD Begin? (CBA Section 27.J.1)
Important: LTD eligibility is triggered by specific events, not just a time period:
LTD begins when ONE of these occurs:
- Exhaustion of sick banks - Both regular sick AND DSA depleted
- Disability-related seat change - Bidding down due to medical restrictions
- Move to non-pilot position - Transitioning to ground position due to disability
Offsets (CBA Sections 27.J.13, 27.J.15)
Offset Rules by Type:
| Source | Offset Amount | Notes |
|---|---|---|
| California SDI | 100% | Full amount offset |
| Social Security Disability (SSDI) | 70% only | Only 70% of pilot's SSDI (family benefits NOT offset) |
| Outside income | 50% of excess | Only if total exceeds pre-disability income |
| Workers' Compensation | Varies | Check plan documents |
| VA Disability | Usually No | Separate offset rules may apply |
Key CBA provisions:
- SSDI: Only 70% of your personal SSDI is offset (disabilities after Oct 30, 2006). Family benefits are NOT offset.
- Outside income: Only offset if your total income (LTD + outside) exceeds your pre-disability total income (FedEx + outside). Then only 50% of the excess is offset.
See Comprehensive Offset Guide for details and examples.
The California Problem
For California-based pilots, the administrator will offset your LTD by the CA SDI amount you're expected to receive—even if:
- You haven't filed for SDI yet
- You've filed but are waiting for approval
- You've been approved but haven't received payment
This creates the core problem this guide addresses: you may receive reduced LTD payments before you've actually received SDI.
Cooperation Requirements (CBA Section 27.J.4)
To maintain LTD benefits, you must:
- Fully cooperate with the claims administrator
- Coordinate with the Aeromedical Advisor
- Diligently seek restoration of your FAA medical certificate
- Respond promptly to information requests
- Attend required medical examinations
See Cooperation Requirements for complete details.
Duration Limits (CBA Sections 27.J.10, 27.J.11)
| Condition Type | Maximum Duration |
|---|---|
| General physical disabilities | Until recovery or age 65 |
| Mental health conditions | 60 months (5 years) |
| Substance abuse | 18 months (12 + 6 for recertification) |
See Duration Limits for complete details.
The Claims Process
Filing a Claim
- Determine which administrator handles claims (Aetna or Hartford)
- Contact the administrator (see Contacts)
- Complete required claim forms
- Provide medical documentation
- Administrator reviews and makes a determination
What the Administrator Needs
- Medical records supporting disability
- Proof of earnings (usually from FedEx payroll)
- Information about other benefits you may receive
- Ongoing medical updates
Communication
- Administrator will assign a claims examiner
- Keep records of all communications
- Respond promptly to requests for information
- Document everything in writing when possible
Appeal Rights
If the administrator denies your claim or you disagree with their calculation:
- Internal Appeal: File within the timeframe specified in your denial letter
- PBRB Review: Request review through ALPA's Pilot Benefit Review Board
- Legal Action: ERISA provides rights to sue in federal court
Company System Access (CBA Section 27.J.19)
While on disability, you retain access to:
- pilot.fedex.com
- PRISM
- Company email (@fedex.com)
This is a contractual right. If access is lost, contact IT and reference CBA Section 27.J.19.
See Company System Access for details.
Working with the Administrator
Tips for Success
- Document everything: Keep copies of all submissions and correspondence
- Be proactive: Don't wait for administrator to contact you
- Respond promptly: Delays in responding can delay your benefits
- Keep good records: Medical records, pay stubs, communications
- Understand your plan: Request and read your actual plan documents
- Know the CBA: Reference specific CBA sections when needed
Next Steps
- LTD Eligibility - When LTD actually begins
- Benefit Calculation - Detailed calculation method
- Offset Rules - Complete offset information
- The Offset Problem - Why CA pilots face unique challenges
- Calculator - Estimate your LTD and offset amounts