Sources of Disability Benefits That May Be Planned For Prior To a Claim
Article by: Caryn E. Montague, RHU, LUTCF; Diplomate- American Board of Disability Advocates
The best thing you can do ahead of any leave of absence is plan. In the event you can no longer work due to a disability, having considered your future ahead of an event is the best insulation you may have.
The best places to look for disability-related benefits are:
· State Disability Benefits– CA, RI, NY, NJ, HI and PR have mandated benefits to replace some income for a short period of time at the beginning of your leave due to accident or sickness.
· Workers’ Comp– For those injured on the job or who have a job-related illness, the vast majority of employers have some benefits that replace income, provide medical coverage, make some retraining available, and provide some coverage for extreme or permanent losses.
· COBRA– Group health benefits, and sometimes other plans, can be continued after you leave an employer. If you are disabled and applying for Social Security, and if you get approved, your COBRA benefits can be extended. These benefits are mandated by the US Government. See Health Plans & Benefits: Continuation of Health Coverage – COBRA
· Social Security Disability (SSDI) and Medicare – SSDI has a 5 month elimination period, Medicare has a 2 year elimination. The eliminations are from the onset of disability, not the filing of an application. An award of SSDI also provides dependent benefits for qualified children, spouses, parents. Receipt of these benefits lock in your earnings records, protecting your retirement benefits. SSDI is often offset against your other disability benefits.
· Short and Long Term Disability Insurance (STD/LTD) – Many employers provide these coverages for their employees. Very often the employee pays for the coverage or pays to increase benefits. Short term benefits protect you from 3 months to 2 years; long term can provide benefits to full retirement, approximately to age 67.
· Life Insurance Waiver of Premium (LWOP) – Some other benefits may also waive premiums. Some coverages do not require continued premiums while the insured is totally disabled. This is usually a very high bar. Sadly, many employees drop this coverage inadvertently without realizing that it could convert and continue to be there for them and their beneficiaries.
· Retirement, Savings, IRAs, 401Ks, 403b’s, pensions, etc. – Many people tap into their savings and retirement funds when they become disabled. Not only does this deplete the funds but there are often tax penalties for early withdrawal. If you have to use funds from these monies, inquire about loans and ensure the funds are aware that you are qualified as “totally disabled”; any 1099 should reflect this. Check with your CPA to make sure you do not violate the rules as penalties can be very costly.
· Dental, hospital, dread diseases (cancer), etc. – These types of plans can often transition with you so long as you continue to pay premiums. Some require your having “owned” the coverage personally. Ask your employer, insurer or HR rep for information as to what you can convert or otherwise continue.
· Long Term Care (LTC)- Your LTC plan or policy may have daily benefits or may allow days in the hospital to count against deductible days. Some Life Insurance policies have LTC components that may be accessed in the event of a claim.
· If you were injured in a car accident or due to someone’s negligence, you may recover some lost wages or other losses but you may need to sue and win the recovery.
· You may have benefits available through a professional, fraternal or union relation. Sometimes benefits come with the membership, sometimes you can purchase benefits either as a group member or at a discount for an individual certificate.
The above is far from complete but is a good start. If nothing else, it should serve to show anyone reading this how important it is to have copies of current benefits’ plans and policies.
It is important to make sure your beneficiary designations, address, phone/contact info, dependent info, name, etc. are all current. If you do not have current wills, powers of attorney, ‘do not resuscitate’ (DNR) orders, etc., set a date (e.g. 3 months from today) to get them updated.
Finally, one of the best things you can do is connect with competent professionals to assist you with your situation. Don’t be afraid to ask questions.
Copyright © 2018 Caryn E. Montague All Rights Reserved