Disability insurance provides benefits to people who are no longer able to work because of illness, injury, or pregnancy. Disability insurance provided by an employer may cover short-term disability, long-term disability, or both. Individuals generally have to file a claim for disability benefits. Payments are usually paid out as a percentage of the worker's average salary and may be capped at an upper limit. The specific benefits available, the process for filing a claim, and the process for seeking a review depend on the individual disability insurance plan.
Benefits of Disability Insurance
The likelihood of becoming disabled before retirement is higher than most people realize. According to some statistics, a quarter of all 20-year-olds in the U.S. will become disabled before they reach the age of 67. The average long-term disability claim lasts almost 3 years. Despite this, only about 30% of private sector workers have long-term disability insurance.
Disability insurance is a valuable form of compensation offered by some employers. Without insurance, disability can be financially disastrous for many families, especially those with one primary wage-earner. Disability insurance enables sick or injured workers to earn a living while they are unable to return to their job. Health insurance may cover medical bills, but it does not pay for a family's bills. Disability payments can cover rent, house payments, buy groceries, utility bills, or help meet other financial needs.
Standard Disability Benefit Plans
Individuals may receive disability benefits through their employer, or purchased individually. ERISA is a federal law which protects individuals who receive private, employer-provided health, pension, and disability plans. This may not apply to government workers, individuals who purchase their own disability insurance, or individuals in states where disability insurance is mandatory.
The specifics of an employer's group disability plan should be detailed in the information provided by the employer. Under ERISA, employers may be required to provide information about the plan, including a description of the benefits, process for filing the claim, and how an individual can appeal if their claim is denied. This may be detailed in the Summary Plan Description (SPD) or Summary of Benefits and Coverage (SBC). If you are unsure if you have disability insurance or need a copy of your plan's benefits, talk to your human resources department.
Disability benefits are generally categorized as short-term or long-term. Some employers offer only short-term disability benefits, while others offer both short- and long-term coverage.
Short-term disability benefits are intended to provide payments for individuals who are temporarily ill or injured. Short-term policies generally provide coverage for up to 3 to 6 months. These policies may require a waiting period before coverage kicks in, typically about 14 days. Once short-term disability coverage begins, the injured individual may receive payments for the time they are unable to work, up to the maximum time specified in their policy.
Short-term disability policies can also be used to provide payments to pregnant employees. Pregnancy-related leave and complications due to pregnancy make up a significant percentage of short-term disability claims. Other common causes of short-term disability include recovery from surgery, slip and fall injuries, car accident injuries, digestive disorders, and back injuries.
Plans may exclude certain causes of disability, detailed in the plan description. This may include disability caused by cosmetic surgery, liposuction, or corrective eye surgery. Plans may also exclude injuries caused by war, participation in a riot, self-inflicted injury, or injury sustained in the commission of a felony.
Other terms of a short-term disability plan may include incentives to return to work or require participation in a Return to Work Program if the individual is deemed capable. This may include identifying training and therapy to help an individual return to work, either to their former occupation or a new occupation.
Long-term disability generally does not apply to maternity, temporary injuries, or minor illnesses. It generally applies to long-term injuries and debilitating illnesses that keep the individual from returning to work for months or years. Long-term disability may cover the individual until they reach the age of retirement, or until they are able to return to work. The waiting period for a long-term claim may take up to 90 days to process.
Common causes of long-term disability include lung cancer or other forms of cancer, back injuries, mental health issues, heart disease, or diabetes.
Filing for Disability Claims
The process for submitting a claim should be detailed in the plan description. This generally requires reporting a claim to the claim administrator within a certain amount of time. The claimant may also have to submit proof of their disability to the claim administrator within a period of time after the elimination period. The claim administrator may then contact the individual, their employer, and their physician to discuss the injury or illness and how it may impact their ability to work.
When submitting a claim, the claimant may have to include the date the disability started, the cause of the disability, the prognosis of the illness or injury, and continuity of the disability. The claimant may also have to submit medical information, including x-rays, medical records, treatment records, and contact information for treating physicians, medical facilities, and pharmacies.
After submitting a claim, the plan administrator must make a determination within a reasonable period of time, no later than 45 days after the claim has been received. In some cases, the plan administrator may request an additional 30-day extension.
If a disability claim is denied, the plan provider must send the employee a detailed explanation of why the claim was denied, and provide a description of the appeals process and reasonable opportunity for employees to receive a full review of the decision to deny their claim.
If you were denied short-term or long-term disability benefits, contact an experienced ERISA disability attorney to make sure you receive the benefits you have earned.
ERISA and Disability Benefits Attorney
Greg Paul has 18 years of experience fighting for long-term disability benefits against the insurance companies. We represent individuals and families who have been denied benefits by their insurance company or plan administrator. You have a limited time to appeal your disability denial, so do not delay. If you have been denied short-term or long-term disability benefits, contact our office for a free consultation.