Many people have long term disability benefits through their workplace, but it is only helpful if it actually insures what you think it insures. Over the next few weeks, we'll be discussing long term disability traps. A trap is a device that catches you unaware. These traps deal with time limits, the definition and location of the occupations which you are able or unable to perform, earnings qualifiers, and others.
The first series of traps is on the definition of disability.
Trap #1: How long are you protected if you become too sick to perform your own occupation?
For how long? Most LTD plans will only insure you from being disabled from “your occupation” for 1-2 years. Then, the definition of disability switches on you to being disabled from “any occupation.”
Trap #2: Are you insured as to any occupation in the national economy or in the area where you live?
When that definition switches from your own occupation to any occupation, it may be any occupation in the United States. If there is some job you can do in Maine, and you live in Alabama, a lot of good that does.
Trap #3: Are you insured as to any occupation you are already fitted to perform, or is it any occupation you could possibly be fitted to perform?
For example, if you are a carpenter and are disabled, the insurance company could say that you could be retrained to do pipefitting. How will you pay to be trained to do this? Are they going to continue to pay your benefit while you do that? Where can you get a job doing pipefitting?
Trap #4: Is there an earnings qualifier?
When the definition switches and you're now looking at any occupation you might be fit to perform, even though you can't do your own occupation, does any occupation include even minimum wage occupations, or does it include only those occupations that would pay a comparable amount as to what you're currently making?
If you are currently making $33/hour, and there is an earnings qualifier of 66%, then the occupations you are fitted to perform would only have to be at least $22/hour. Those percentages can change. Are you insuring your current wage and current circumstance or just getting some sort of benefit that doesn't matter that much?
Trap #5: Are you insured as to any occupation at all?
It may be that you are insured as to whether you can perform your daily activities of living. Maybe you are disabled from performing any occupation at all, and the government agrees. However, the policy will not pay unless you are unable to do three (3) activities of daily living. That doesn't provide much insurance for you. Activities of daily living include things like being able to take a shower/bath, being able to get on and off the toilet, being able to put your clothes on, etc. Many people who are disabled are able to take care of most of those things, but that doesn't mean they're fit to work a job.
Trap #6: Some notable plans only insure if you're disabled and you can't work a part-time job (20-25 hours/week).
You may think that you're insured as to some full-time occupation, but you find out that you have to show that you can't work a job full-time OR part-time.
How to Avoid This Series of Traps on the Definition of Disability
Go to your HR department, and find out what your LTD benefit plan includes. If it doesn't provide the coverage you want, then ask your HR department if they can shop for a better plan. Make your employer aware of these traps, and put some pressure on them to provide a better compensation package.
If you or a client have been caught in this trap, you need the help of an experienced ERISA attorney.
Whether you or your client needs advice before applying or appealing for ERISA benefits such as long term disability, short term disability, life insurance, pension, or retirement, contact an experienced ERISA disability attorney at The Martin Law Group at 800-284-9309.
The information presented in this video should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Therefore, no information of any kind that you provide us before such a relationship is created is confidential or privileged.