Disability Benefits From State Government
From January 2021, the;Department of Paid Family Medical leave offers a cash benefit to Massachusetts employees who need to take paid leave for medical or family reasons. Find out more at;Paid Family and Medical Leave .
Some employers offer short- or long-term disability insurance as a benefit to their employees. You should check with your human resources department to find out whether your employer offers this benefit and if you have previously enrolled in it.;If you have private disability insurance through your employer, or that you’ve;bought individually, typically it will require you to apply for any public benefits available. In conversations about disability insurance, if people are referring to “disability,” they often mean PFML.;
The Department of Transitional Assistance provides cash benefits to people with very low income and assets. If you are unable to work for at least 60 days due to a disabling condition, you may be eligible for one of their programs.;
What To Consider When Buying Disability Insurance
If you’re considering disability insurance, make sure you:
- check with your employer to see if you already have group disability coverage with your employer’s plan
- shop around, especially if you’re considering private disability insurance
Consider group insurance offered through a union, guild, or professional or alumni association. Premiums for this type of coverage usually increase as you get older. You’ll need to renew your insurance every few years.
How Common Is It For Beneficiaries To Return To Work
Both Disability Insurance and Supplemental Security provide incentives for beneficiaries to work. Disability Insurance beneficiaries are encouraged to work up to their full capacity and can earn an unlimited amount for up to 12 months without losing any benefits. Beneficiaries who work for more than 12 months and have earnings above the substantial gainful activity level cease to receive a monthly benefit. If at any point in the next five years their condition worsens and they are not able to continue working above the substantial gainful activity level, however, they are eligible for expedited reinstatement of their benefits. This means they do not need to repeat the entire, and typically lengthy, disability-determination process that they initially went through to qualify for benefits.
Supplemental Security beneficiaries who are able to work are encouraged to do so as well. Their benefits are reduced based on their earningsafter the first $85 of earnings each month, which is not counted against the benefitbut by only $1 for every $2 of earnings. Beneficiaries who are able to do some work will therefore always be better off with both earnings and a reduced benefit than just the benefit alone.
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Is Di Out Of Sync With The Americans With Disabilities Act
The Social Security Advisory Board, which was created by Congress to advise the President, the Congress, and the Commissioner of Social Security, posed the question of whether the DI program and its test of disability is out of sync with the Americans with Disabilities Act . In April 2004, the Academy;drew on findings of its Disability Policy Panel report, Balancing Security and Opportunity, to testify before the Board as follows:
The need for a disability wage-replacement program does not go away because we have the Americans with Disabilities Act . Nor is the need for such a program eliminated by advances in medicine, changes in the demands of jobs, new assistive technology, or other environmental accommodations. These developments may increase employment opportunities for some categories of individuals with disabilities. For example, the ADA expands opportunity for people who have highly valued skills whose main impediments to work had been based on discrimination, architectural barriers, or other impediments that the ADA alleviates. But other individuals may face increasing impediments to work as the work environment and demands of work change. For example, in an increasingly competitive world of work, emphasis on versatility and speed may impede employment prospects for people with mental impairments. Because the phenomenon of work disability will remain with us in a competitive economy, wage replacement programs remain essential.
Health Care Coverage For Disability Beneficiaries
Individuals who are receiving;Social Security disability insurance become eligible for Medicare after receiving DI for two years. Low-income individuals who receive SSI are generally eligible for Medicaid immediately. Health coverage is critically important for those receiving disability benefits, because individual insurance policies are likely to be unaffordable or unavailable to them. According to the Academy;report, Balancing Security and Opportunity: The Challenge of Income Disability Policy, “Many people with chronic health conditions or disabilities are at risk of very high health care costs. They often cannot gain coverage in the private insurance market, and even when they do have private coverage, it often does not cover the range of services and long-term supports that they need. Current gaps in health care coverage for people with disabilities limit their labor market options in several ways.
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The Social Security Act Defines Disability Very Strictly
Eligibility rules for Social Security’s disability program differ from those of private plans or other government agencies. Social Security doesn’t provide temporary or partial disability benefits, like workers’ compensation or veterans’ benefits do.
To receive disability benefits, a person must meet the definition of disability under the Social Security Act . A person is disabled under the Act if they can’t work due to a severe medical condition that has lasted, or is expected to last, at least one year or result in death. The person’s medical condition must prevent them from doing work that they did in the past, and it must prevent them from adjusting to other work.
Because the Act defines disability so strictly, Social Security disability beneficiaries are among the most severely impaired in the country. In fact, Social Security disability beneficiaries are more than three times as likely to die in a year as other people the same age. Among those who start receiving disability benefits at the age of 55, 1-in-6 men and 1-in-8 women die within five years of the onset of their disabilities.
Cash Assistance For Pending Social Security Claims
The Massachusetts Department of Transitional Assistance offers emergency assistance to certain people;who have very low income and assets. ;While DTA does not provide disability benefits, people who are unable to work for a medical reason for at least 60 days may be eligible. DTA also runs;the Supplemental Nutrition Assistance Program , formerly known as the food stamp program.
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The Disability Insurance Underwriting Process
Your risk of becoming disabled plays a large role in determining how much you will pay for coverage. So how exactly do insurance companies calculate your risk of becoming disabled?
Individual disability income insurance requires underwriting. Whereas group plans help insurers spread their risk among a large group of policyholders, issuing an individual policy requires the insurance companies to assess the risk of a single applicant.
Before you get caught up in the cost, it helps to understand the various factors that insurance companies look at when assessing risk.
Why Should Employers Offer Long Term Disability Insurance
Could your employees family maintain their current lifestyle if they were unable to work and bring in an income? Would they be able to pay their mortgage and utilities? Could they afford their car payment or be able to purchase enough groceries and clothing for the family?
These are tough questions, but the answers are important. Accidents happen when we least expect them. In cases where injury or illness prevents an employee from working and bringing in an income, protection is a must.
Here are the three big reasons why LTD should have a place in your employee benefits plan.
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Illnesses Covered By Disability Insurance
According to the Council for Disability Awareness, most disabilities are not accident-related and are caused by illnesses.
The top causes for long-term disability claims are:
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Muscle, back, and joint disorders
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Spine and nervous system-related disorders
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Cardiovascular and circulatory diseases
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Accidents, injuries, and poisonings
Group Disability Insurance Through Your Work Or An Association
Your company may offer STD or LTD insurance as part of your employee benefit package. If youre self-employed you may be able to get disability insurance through a professional association. Either way, group disability insurance can be an excellent choice: Because the company or association is buying for a large group of people, the premium is typically lower than for an individual policy. In addition, your HR department will likely have more expertise and leverage to negotiate favorable terms.
An added benefit to getting a policy through your employer is that they may also subsidize a portion of the premiums, further lowering your cost. On the other hand, because the company or association is effectively buying in bulk, you will probably have less opportunity to tailor the policy to your needs. If the premiums are paid with pre-tax dollars then the income benefit you get down the road will typically be taxed. Finally, if you leave the company or association, in most cases youll also lose your coverage.
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Disability Insurance Coverage For Mental Illness
Certain types of pre-existing conditions may be excluded from coverage. Some insurers include mental illness among these exclusions, including anxiety, depression, and other types of nervous disorders.
Some insurers offer coverage for disabilities caused by alcohol and drug abuse, but coverage may be limited. If you abused alcohol and drugs prior to taking out the policy, they may be excluded from coverage.
If your mental illness is not excluded, or if it developed after taking out the policy, you may be able to receive disability benefits if it causes you to lose your ability to earn an income. However, there may be restrictions on how long you can receive benefits. Some insurers only cover mental illness for a set period of time that may be much less than your benefits period.
If You Become Disabled While You Are Unemployed
- If you have been unemployed for less than four weeks
- your disability benefits are provided by your last employer’s disability benefits insurance carrier, and
- the seven-day waiting period applies.
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Who Needs Disability Insurance
If you rely on your source of income, you need disability insurance â especially if you have loved ones who depend on you.
Disability income insurance is a smart investment for young, healthy individuals who want to secure their financial future. Without disability insurance, a bad accident, loss of vision, chronic condition, or illness could cause financial hardship. Even a temporary disability can cause you to deplete your savings, fall behind on bills, and rack up debt.
For example, consider what would happen if you suffer a heart attack. Because it didnât happen as a result of your job, you wouldnât be able to collect workersâ compensation. You wouldn’t qualify for government disability benefits either. That means without disability insurance, you would have no active source of income while you recover. The same would be true if you were injured in an accident.
Disability insurance is for the mechanic who canât repair cars for a few months with a broken hand. It can provide income to pilots and truck drivers who suffer vision problems. It helps architects, accountants, and attorneys who canât work after suffering from traumatic brain injuries.
Disability insurance is for everyday people like you and me.
Pregnancy And Maternity Leave
If you are disabled due to pregnancy, you may be entitled to up to 26 weeks of disability benefits.
You will need to submit a medical report completed by a doctor or certified nurse midwife stating your disability is due to pregnancy.
- The medical report should describe specific pregnancy complications if your disability
- started more than four weeks before the anticipated birth date; OR
- lasts more than four to six weeks after the actual birth date.
Note: Benefits are not payable for any period you are unable to work due to elective surgery .
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Comparison Of Federal Vs State Vs Private Disability Benefits
The inability to work can create personal financial hardship. There are many different programs that can work as financial safety nets if your diagnosis makes it difficult to maintain employment.
Social Security Disability is a federal program administered by the Social Security Administration that provides benefits to people limited by total disability. Disability has two programs within it- SSI and SSDI. SSI is a program designed to assist low-income individuals who may have never worked, or who havent worked enough to earn sufficient work credits for SSDI. SSDI is funded by taxes, so only adults with a work history are eligible. To receive SSDI, your application must show that you can no longer work in your previous occupation, you cannot adjust to a new work environment, and your disability prevents you from being able to return to work for at least a year.
Figuring How Much Long
Before purchasing long-term disability insurance, determine how much income you need to meet critical financial obligations such as rent/mortgage, food, fuel/transportation, utilities, etc. An easy way to do this is by adding up your monthly expenses and then comparing them with the income from any existing disability coverage, plus any income from other sources, such as personal savings.
A disability can also bring with it increased or additional expenses like health care costs, assistance with daily activities, even home modifications. Keep this in mind while evaluating the amount of coverage you could need.
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Timing Of Base Period
Here’s a chart showing your base period for recent and upcoming quarters.
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Date Claim Filed |
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Because the state uses your highest-paid quarter of your base period to calculate your weekly payment, the date you file your claim can affect your benefits amount. You can use this to your advantage by choosing the date that will give you the base period with the highest wages, but you must file a claim with EDD within seven weeks of becoming unable to work.
What Is Supplemental Security Income
Supplemental Security Income is a federal program that pays monthly benefits to low-income aged, blind and disabled individuals. The Social Security Administration runs the program, which is financed from general tax revenues, not from Social Security taxes. The SSI test of disability for adult applicants is the same as the test in the Social Security disability insurance program. Only people who have low incomes and limited financial assets are eligible for SSI. The federal SSI payment in 2017;for an individual with no other countable income is $735;a month. Payments are reduced as other income rises, and some states supplement the federal payment. Each month on average in 2016,;8.3;million low-income adults received SSI. These beneficiaries included 4.8;million adults under age 65 who were eligible based on disability or blindness and 2.2;million adults aged 65 and older. In addition, 1.3 million children under age 18 receive SSI based on disability or blindness.
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What Is Individual Disability Insurance
You get individual disability insurance when you strike out on your own to secure coverage from an insurance company or broker, outside of what you may already have in place via your employer, or provincial benefits. Many people opt to do this if they are self-employed because there are no employer benefits at all, if they work for a small business that offers some benefits but not comprehensive ones, or if their employer simply doesnt offer the maximum disability insurance coverage possible.
For example:
Freds employer has provided him with a good benefits package, but Fred is concerned because his disability insurance states it will only replace 50 per cent of the income he loses due to a disability. Just to be safe, Fred makes an appointment with an insurance broker to secure additional disability insurance that will top up his existing policy.
What Is Short Term Disability Insurance
LTD isnt the only form of Disability Insurance!
As the name implies,;Short Term Disability ;exists to replace a regular income for a short period, typically a maximum of 13 26 weeks. During this time, an employee can be off work while receiving a portion of their income. A very high percentage of employees will return to their job within the short term disability time frame.
Take a look at this infographic to understand how Short Term and Long Term Disability Insurance work to help protect the health, wealth, and wellbeing of employees.
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What Other Types Of Riders Offer Added Protection
Many other riders are typically available, and some of the most popular choices include:
- Basic or enhanced partial disability benefit rider: These options protect you by paying a partial benefit if you suffer an injury or illness that limits your ability to work but doesnt cause total disability.
- Student loan protection rider: This optional benefit provides extra money to make student loan payments during a specified period. It is particularly useful for early-career professionals such as doctors and lawyers who have invested heavily in their education.
Future purchase option: This lets you increase coverage in the future as your income rises, without having to undergo a medical exam or provide proof of insurability.***