Tips for Transitioning from the Workplace to Disability Insurance
Introduction
The transition from the workplace to disability insurance can create uncertainty and stress for persons with chronic debilitating illnesses. That uncertainty and stress can be reduced by preparation and planning. This article suggests the following steps you can take to make this transition easier:
1. Understand your sick leave and disability benefit plans.
2. Consult with your doctor before you leave the workplace.
3. Move from the workplace to disability insurance.
4. Know your sick leave and obligations while receiving disability benefits.
At Mansfield, Tanick & Cohen, we can assist you at every stage of the disability process, from helping you understand your benefits to assisting you to appeal a denial or cutoff of benefits.
1. Understand Your Sick Leave and Disability Benefit Plans.
In order to make a smooth transition to living on disability insurance, you need to understand the terms of your disability policies. Disability policies are contracts between you and the insurance company, and are not uniform. Because each policy differs, you need to obtain a copy of the long version of the policy (not the shorter summary plan description) from your employer's human resources office, and read it carefully so you will know what is covered under the policy and what is not. The policies can be complex, and you may wish to seek legal advice to understand your rights and obligations.
In general, disability benefits take three forms: a) sick pay; b) short-term disability; c) long-term disability.
a) Sick Pay
While sick pay technically is not a disability policy, it is often the first benefit available to the employee when going out on disability. You should get a copy of your employer's sick leave policy and follow the requirement to the letter. Some employers require a medical note to verify your illness after you have been out a certain number of days. Others require that you call in to the company every day to report your continuing need for sick leave, even if your doctor's note clearly indicates the need for a lengthy leave. As petty as it may seem, courts have enforced company policies conditioning receipt of sick leave on daily call-ins. Depending on the nature and extent of your illness, you may need to delegate call-in responsibilities to a family member or friend so you do not lose your sick leave benefits and are not discharged from your employment for failure to abide by the policy.
b) Short-term Disability
Some employers provide short-term disability for their employees, while others do not. Most short-term disability policies do not kick in immediately upon illness, but have a waiting period of one week to several weeks before benefits are available. If you have sick pay available, it might fill in all or part of the gap. Short-term disability policies pay benefits for a limited period of time generally ranging from three to six months. Some short-term disability policies replace 100 percent of your income, while others provide a smaller benefit, most typically 66 percent. Short-term disability policies may require you to be totally out of work to obtain benefits, while some may provide a partial benefit if you work part-time. The long-term disability section below discusses this and other clauses that sometimes are present in short-term disability policies.
c) Long-term Disability
There are number of provisions under long-term disability policies that are of particular significance. In reviewing a long-term disability policy, you should look for the following provisions:
i) Pre-existing Condition Clause
Some policies will not provide benefits for disability caused by a pre-existing condition unless you have been covered under the policy for a set period of time and have not become disabled from that condition during that time, or meet some other criteria. For example, a policy holder who has multiple sclerosis might start a new job and be covered under her employer's long-term disability policy that excludes pre-existing conditions for one year. If that employee became disabled from a heart attack eleven months after being covered under the policy, she would be eligible for benefits. But, if that same employee became disabled from multiple sclerosis in the eleventh month, she would not. If, however, the employee whose multiple sclerosis is making it increasingly difficult for her to work could continue to work another month - until she had been covered under the policy for more than a year - she would be entitled to benefits.
This example illustrates why it is important for you to understand the pre-existing condition clause in your policy. If the pre-existing condition clause applies to your situation, you may wish to try to tough it out on the job through the end of the pre-existing condition time limit. To help you tough it out on the job, you could seek reasonable accommodations from your employer under the Americans with Disabilities Act, perhaps to modify your job duties to assist you to stay on the job longer in spite of your medical challenges. Click here for more information on the Americans with Disabilities Act.
ii) Waiting Period
Long-term disability policies generally require that you be disabled for a period of time before receiving benefits. The waiting period varies, typically from between thirty (30) days to one hundred eighty (180) days. Knowing your waiting period ahead of time will allow you to plan for this gap in income, particularly when you do not have any sick days or short-term disability to fill it.
iii) Definition of Disability
Whether you are disabled within the meaning of your disability policy may depend upon the definition of disability under the policy. Although disability can be defined in any fashion, there are two common definitions used in the insurance industry: the "own occupation" definition and the "any occupation" definition.
Under the "own occupation" definition, an individual is generally considered disabled if he or she is unable to perform the substantial duties of his or her own job. In other words, if you are an airline pilot, and you become physically unable to pilot an aircraft because of a disability, you are disabled under an own occupation policy, even thought you might be able to do other kinds of work. Under some policies, the own occupation definition continues throughout the term of the policy, but under most policies it is limited in time, typically two years, and then the policy converts to an "any occupation" definition.
Under the "any occupation" definition, a person typically is considered disabled if he or she is unable to do any kind of work for which he or she is qualified by education, training and experience. While the any occupation definition likely would not result in the cutoff of benefits for a college-educated individual with professional experience who might be able to perform an entry-level, minimum-wage position, it certainly could result in a cutoff of benefits if that same individual could easily transition to another professional occupation. An example would be a registered nurse who is unable to do bedside nursing because of a leg injury, who might be able to take a job as a claims adjuster in an insurance company.
iv) Limit of Time of Benefits
While most long-term disability benefits are payable to age 65, or to one's social security retirement age, some are more limited in time. It is very important to check the time limitation of your policy so you can engage in appropriate financial planning.
In many policies, benefits for individuals disabled because of mental health conditions or chemical dependence are limited to two years. Some policies also limit benefits for certain types of physical conditions.
v) Part-time Work
Some policies allow individuals to continue receiving a reduced level of benefits while working part-time, while others do not. Other policies allow for receipt of reduced benefits while working part-time only when the policy holder first has been totally out of the workplace for a stated period of time. You should, therefore, review your policy very carefully before considering part-time employment.
Social Security Disability
Most long-term disability policies require the employee to apply for Social Security disability benefits. Any Social Security disability benefits received are then offset against the benefits paid under the policy. If the policy holder does not apply for Social Security disability benefits, the insurance company will treat the policy holder as if he or she is receiving those benefits. It is, therefore, advantageous to apply for Social Security disability benefits, even though the amount received will likely be offset. (Some policies do not offset Social Security disability payments.)
vi) Pension Benefits
Some disability insurance policies offset pension benefits you receive from your disability benefits. You should read these clauses very carefully before deciding whether to begin receiving your pension benefits, or wait until disability benefits cease before drawing down pension benefits.
vii) Other Income Offset
In addition to Social Security disability and pension benefit offsets, some insurance policies offset for other income. Again, you should check your policy carefully to determine how these other sources of revenue will impact your long-term disability benefits.
viii) Other Clauses
While the clauses noted above are the most prevalent in long-term disability policies, there are other clauses which you may want to consider. Again, you should review the policy very carefully before you make a decision to transition to long-term disability so you can make an informed choice.
2. Consult with Your Medical Provider Before You Leave the Workplace.
Your medical provider will play a key role in determining whether you are eligible to receive sick pay, short-term disability or long-term disability. If your medical provider does not believe you are disabled under the terms of the policies, it is extremely unlikely that you will receive benefits under those policies.
In order for your doctor to provide you with an opinion, you will need to supply your doctor with the information he or she will need to make that determination. That information includes:
- Your medical symptoms;
- Your job title and description; and
- The policy definition of disability.
Obviously, you will need to relay your medical symptoms to your doctor. You should be honest with your doctor about your symptoms, and you should not hold back symptoms just because you have relayed them to the doctor in the past, or because they seem embarrassing. Making a list of your symptoms before visiting the doctor will help you remember them during your appointment.
If your policy is an own occupation policy, your doctor will need to know your job title and job duties. If your employer has a job description for your position, providing a copy of that job description to your doctor will be helpful.
You should also provide your doctor with the definition of disability under the insurance policy. This will help your doctor form his or her opinion and complete the necessary insurance paperwork.
If you have made a decision to go out on disability, you should tell your doctor that you will need to have paperwork filled out. Ask your doctor, or the doctor's nursing staff, about the best way to process the paperwork through the clinic. Oftentimes, nursing personnel play a key role in processing insurance paperwork by making sure your form gets to the doctor with your file, and making sure it is mailed out once the doctor completes it.
Sometimes the insurance forms get lost in the system, either in the clinic or at the insurance company. If you ask the clinic to send you a copy of the form, you will be able to send another copy to the insurance company if they claim they did not receive it from your doctor. If you do not receive it from your doctor in a reasonable period of time, you should call the clinic to check on whether the form has been completed.
3. Move from the Workplace to Disability Insurance.
Once you've studied your employment and disability policies and received an opinion from your doctor that you are medically disabled, you can begin the delicate step of removing yourself from the workplace. When doing so, do not quit your job. Instead, you should call in sick, provide a note from your medical provider indicating you will be unable to work for a set period of time, perhaps 15-30 days, and your doctor will reevaluate your condition at that time. Ask for medical leave under your employer's medical leave policies, and under the Family Medical Leave Act if you qualify (click here for more information on the Family Medical Leave Act).
There are several reasons for not immediately quitting your job when you decide to go out on disability. In most situations, you cannot collect the sick days you have built up if you quit your job. Some short-term disability policies require you to be employed to collect short-term disability benefits. You might be turned down for short-term or long-term disability, and you may decide you prefer to try to work again rather than to fight the denial. Lastly, with rest, your condition might improve, allowing you to return to work. Remaining on medical leave as long as possible allows you to keep your options open.
Use caution before deciding to reduce your hours as a reasonable accommodation for your disability. Reducing your hours may, at worst, render you ineligible to receive long-term disability benefits. Or, it could decrease the amount of disability benefits you receive once you need to leave the workplace altogether. This is because your disability benefits are often based on a percentage of your income. When you reduce your hours, you also reduce your income.
As noted above, there may be a way of working part-time while collecting disability benefits. But this must be done within the limitations of your particular policy after careful study of the terms of the policy.
4. Know Your Obligations While Receiving Disability Benefits.
Once you receive long-term disability benefits, your obligations under the policy are not completed. Most long-term disability policies require that you visit a doctor regularly and provide paperwork on a regular basis. Each time you return to your medical provider, you should remind the medical provider that you are on disability, and ask him or her to carefully record your symptoms and your continued inability to work.
a) Communicate with Your Medical Provider and Disability Carrier
Many people with chronic conditions learn they are better off by remaining optimistic and, as a result, often refrain from discussing their aliments. While that may be a good approach to take in life, you should honestly and thoroughly relate your symptoms when visiting your doctor or talking with your disability insurance representative to avoid having your benefits unfairly cut off. Your disability carrier will periodically review your medical documentation, and may go so far as to have a private investigator follow you from time to time. While this does not mean you should hide in your home or be inactive, which is not required, it does mean that a periodic medical appointment, with an honest and complete reporting of your symptoms, is very helpful in avoiding a challenge to your continued receipt of benefits.
b) Contesting a Denial or Cutoff of Benefits
If your benefits are denied or cut off, we strongly recommend you consult an attorney to assist you in appealing the denial or cutoff of benefits. Although the first stage of the appeal process consists of providing additional information and documentation to the insurance company, the information provided at that stage likely will be the only information that can be utilized in court if the insurance company turns you down again. Therefore, it is very important to obtain legal advice or representation for an internal appeal to be sure that the record is full and complete, should you need to go to court to obtain your insurance benefits.
Conclusion
The transition from the workplace to disability insurance benefits can be confusing, uncertain and stressful. Preparation, planning, and advice can decrease the uncertainty and stress during this difficult process. At Mansfield Tanick & Cohen we help people navigate through all stages of the disability insurance labyrinth, including interpreting policies, assisting with disability insurance paperwork, communicating with employers, doctors and insurance companies, and appealing the denial or cutoff of benefits.
