Employee Disability Insurance
There are various forms of private long-term disability insurance policies. This type of insurance can be acquired in the form of an individual policy where the policyholder pays the premium. More commonly, private disability is group insurance offered by an employer. These policies pay a monthly benefit to employees who are disabled by an injury or illness and cannot continue to work, either in that particular occupation, or—depending on the policy—in any occupation. Many companies offer both short-term and long-term disability.
Short-term disability is usually for six months. It can be covered by the employer or by an insurance company. The employee should apply for short-term disability with their company (usually with HR.) If the company does not offer short-term disability, the employee will need to take sick leave and vacation time until they can apply for long-term disability.
The employee should apply for long-term disability (LTD) when the short-term disability or waiting period is about to run out. LTD is usually managed by an insurance company and the employee is covered by a long-term disability insurance contract that sets out rights, responsibilities, and benefits—as well as the prerogatives of the insurance company to provide, limit, or terminate those benefits. Be sure to ask for a copy of the LTD policy.
The disability standards for LTD policies often differ. Most policies do not require complete disability (meaning that the employee can’t work at all.) Normally, to be accepted under such policies, the employee will be unable to do their present job, or comparable work requiring their current level of education and skills. They might still be able to do much different and easier part-time work and still be eligible to receive long-term disability benefits.
It is important that the employee should apply for short and long-term disability benefits while they are still working. Rights to benefits are much clearer if the application is made while still an employee. If, for some reason, the employee has left the job, and needs to apply for benefits, they should contact the employer and ask to apply. An attorney may need to be consulted. It will be harder to make the claim, but the attempt should be made.
In all cases, the medical documentation provided by the employee’s physician(s) as to the diagnosis, severity, chronicity, and disabling effects of the illness is critical to achieving acceptance for short and long-term disability. The doctor must agree that an illness that prevents the employee from working under the terms of the disability contract. The LTD insurance company may insist that the employee also see one of their physicians or other health care examiners. If the company seems unreasonable, remember they in business to make a profit. But also remember, employees have a right to a fair deal with the insurance company—they paid the insurance premiums.
Health care benefits under LTD policies
In many cases, individuals receiving LTD benefits can buy Medical Insurance under the federal COBRA law. This allows purchase of the insurance at a group rate, although the cost must be borne by the individual. After a certain period of time, the COBRA allowance may expire and other health insurance options will have to be pursued. (See our section on Medical Insurance Programs for other options.)
Long-term Disability Insurance and Social Security Disability
Most LTD policies require an applicant to also apply for Social Security Disability Insurance (SSDI). Under most policies, if a person is accepted for both LTD and Social Security, the insurance company will deduct the Social Security payment from the monthly amount the company pays. Even if a policy does not require it, an SSDI application it is advisable. First, individuals approved for SSDI are eligible for Medicare after a two year waiting period. Second, an SSDI approval by the federal government can be used as an argument to the private insurance company of your continuing disability.
Resources
Disability Insurance Claims (PDF): This article by a legal specialist in long-term disability insurance answers eighteen common questions concerning filing a disability claim under a private insurance policy.
Attorney Fee Agreements for Disability Claims: What is a Fair and Legal Agreement (PDF): Advice for those signing a contract with an attorney, by MassME disability specialist Ken Casanova.
Disclaimer: The Massachusetts ME/CFS & FM Association makes no recommendation in the use of professionals whose articles are linked to our site.