Voluntary Disability Insurance
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Your team may have questions about disability insurance. Here’s a primer to give you the information they need.
Unlike group disability coverage where an employer covers part of the premium cost for all eligible employees, the cost of voluntary short-term disability insurance (STD) is paid for entirely by the employees. This gives them the peace of mind that should they get sick, their living expenses will be covered while they’re unable to work.
Because health insurance doesn’t cover living expenses like rent and utilities, STD can help bridge the gap created by a serious injury or disability that affects your ability to work.
In many cases, STD benefits go into effect as soon as one week after you’ve left work and can help cover income for up to six months or longer.
Designed to ease the challenges faced by people who are unable to work for an extended period, voluntary long-term disability (LTD) can help replace part of an employee’s income in the aftermath of a disabling injury or sickness.
Voluntary LTD insurance picks up where STD leaves off, going into effect after employees have been out of work for 90 days, 180 days or more and helping replace income until they reach the age of 65 or Social Security Normal Retirement Age (SSNRA).
To be eligible for short-term disability benefit payments after suffering an injury or sickness, an employee needs to have current coverage in force, meet the exclusion limit for pre-existing health conditions, meet time-off work requirements and satisfy the short-term disability definition outlined in the policy documents.
The employee should then be eligible for benefit payments to help cover expenses throughout recovery.
In many cases, conditions like debilitating stress and work-induced anxiety are also eligible for coverage.
However, coverage for most, if not all symptoms and ailments require a specific diagnosis from a doctor confirming that the condition prevents the employee from working.
Some qualifying conditions typically eligible for short-term disability benefit payments include:
There are several prerequisites an enrolled employee must satisfy to qualify for long-term disability payments.
First, the employee needs to have current coverage in force, be classified as a full-time employee prior to the injury or illness, be unable to perform the duties of the occupation, be off the employer’s payroll, verify no pre-existing conditions and fulfill the LTD elimination or waiting period in the policy documents.
Assuming these prerequisites are satisfied, the employee should be eligible for long-term disability benefit payments.
While LTD benefits are typically only available to people who are unable to work at all, some long-term disability policies allow for partial disability. Though most LTD policies exclude people still on their employer payroll, these policies may allow employees to receive partial disability benefits after they’re forced to work part-time due to a qualifying condition.
Some conditions that can be eligible for short-term disability claims include:
Pre-existing conditions are usually not eligible for a claim if the condition causes the disability during the pre-existing conditions exclusion period. Even if an employee has one of or more of the conditions on this list, certain other stipulations must be met to qualify for LTD benefits.
Almost every insurance carrier requires long-term disability beneficiaries to file for Social Security benefits to supplement monthly LTD payments. Due in part to this shared interest between the carrier and the insured, some carriers are willing to hire a disability attorney on an employee’s behalf to help with the Social Security case.
In states requiring workers’ compensation by law, an insurance carrier may require injured LTD claimants to file for those benefits. Like Social Security payments, any workers’ compensation benefits awarded are used to offset long-term disability payments.
While long-term disability can be complicated, the employee benefits specialists at Higginbotham are here to help.
Give us a call today to learn more about what a disability insurance plan from Higginbotham can do for your business.