Ten Things Employees Should Know About ERISA Disability Insurance Benefits
If you currently own a long-term disability (LTD) insurance policy and you are not yet able to return to work, consider contacting an Augusta disability attorney to determine whether you are entitled to receive LTD benefits to replace a portion of your lost wages. The Employee Retirement Income Security Act (ERISA) governs most group LTD policies, and so the terms may be used interchangeably. If you are considering working with an Augusta disability attorney to file a claim, here are 10 important things to know:
- If you are able to receive LTD benefits, you’ll likely be asked to file for Social Security Disability Insurance (SSDI), too. If you are approved for Social Security disability insurance, your LTD provider is legally allowed to offset your SSDI payment against your LTD benefits. In other words, the company can reduce your LTD benefits based on the amount you receive from SSDI. Since your LTD insurance provider has a significant incentive to see you approved for Social Security benefits, it will usually require you to file for SSDI. In fact, some LTD providers will arrange for your own attorney to represent you when you apply for your Social Security benefits.
- Investigators are often hired by insurance companies to covertly look into individuals who are applying for LTD benefits. These investigators want to find any and all reasons to deny your claim, so be careful how you interact with others since they could be covert investigators. Above all, make sure you are following your doctor’s orders in terms of the physical activities you can perform and any restrictions you may have.
- The type of policy you have will determine whether your LTD benefits are taxable. Group policies, including those provided by employers, are paid for with pre-tax dollars. As a result, these policies are taxable to you, so expect local, state and federal taxes to be withheld from your monthly benefit payments. On the other hand, however, if you own an individual plan that was purchased with after-tax dollars, you will not be required to pay taxes on your benefits.
- You must wait to file for disability benefits. Not many people are aware that there is a waiting period between the time you are disabled and when you are legally entitled to receive LTD benefits. In most cases, this “elimination period” is 90 or 180 days, and during this timeframe, you will not be eligible to receive any benefits, even though you are living with a disability. Unfortunately, applicants typically use up their short-term disability benefits and sick time before they are allowed to file for LTD benefits.
- Your case is ultimately decided by your LTD policy’s definition of “disability.” Depending on the policy, you might find that your LTD policy defines the term “disability” so specifically that you will be determined to be “disabled” when you cannot perform any job’s duties in any industry or occupation. In other cases, policies may define a disability as the inability to substantially perform your own job duties in your own industry or occupation. In addition, your policy’s definition may switch from the “own occupation” level to the more strict “any occupation level,” and this typically occurs after you have received benefits for 24 months. As a result, many policyholders experience a termination in their LTD benefits after two years.
- Your medical records and your healthcareprovider’s opinion are important in an LTD claim. Make sure to inform your healthcareprovider if you believe a LTD claim may be in your future. Your insurance company will send a packet of forms to your physician for completion, and the company will need to be able to access your medical records. However, be sure that your file contains each piece of relevant medical evidence since it is almost impossible to add new proof to the administrative record should you need to appeal your claim to a federal judge.
- If your disability is based on a nervous or mental condition, your LTD policy might limit your payment. If you are applying for long-term disability benefits based on a nervous or mental condition such as chronic fatigue syndrome, generalized anxiety order or depression, understand that you will likely only be eligible for LTD benefits for a specific length of time, generally up to 24 months.
- Some LTD policies provide benefits for five or 10 years; others pay for benefits until the age of retirement. To determine whether your LTD policy provides benefits for a fixed number of years, consult your policy’s summary plan. There, you will find specific information related to your policy, and you will be able to determine exactly how long your LTD benefits will come to you.
- If you are eligible to receive LTD benefits, you will receive a percentage of your former income, not the whole amount of your previous salary. While the specifics of your plan will indicate how much you will receive in monthly LTD benefits, the general consensus is that claimants are paid approximately 60 percent of their former salaries, and short-term disability benefits can hover around 80 percent or more of the employee’s earnings.
- Your LTD plan administrator or insurance company will decide whether you are denied or approved for benefits. Not surprisingly, this set-up frequently leads to denied claims that are actually valid. However, if your valid LTD claim was denied, your case is not closed. With every denial comes a method, and deadline, for you to file an appeal. Only when you have exhausted your provider’s internal appeal process can you pursue a claim in federal court, where a judge will base his or her decision only on the record he or she has. In other words, you will typically not be allowed to introduce new proof of your disability.
Contact an Augusta Disability Attorney to Learn More
If you are considering filing for LTD benefits and have questions about your options and whether you are eligible for disability benefits, consider seeking legal counsel from an Augusta disability attorney at Wilkinson & Magruder, LLP by calling (706) 737-0771.