Long-Term Disability Insurance compared to Social Security Disability Insurance
How does long term disability differ from Social Security Disability?
Author: Attorney Lonnie Roach
Long-Term Disability Insurance helps provide financial support for an employee when they are unable to work due to illness or injury. It is similar to Social Security Disability Insurance, but different in a number of important ways.
Long-Term Disability Insurance is private and there are a variety of providers.
Your ability to collect benefits may depend on which provider you have as they have their own definitions of disability.
The Social Security Administration has a relatively straight-forward standard for disability:
“The law defines disability as the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.”
Social Security Disability Insurance
- Public disability benefit tied to your Social Security benefits.
- Administered and governed by the Social Security Administration, a Federal entity.
- Available to any resident with a social security number who has at least 20 work credits with the Social Security system in the 10 years preceding the qualifying event.
- Benefit amount is based on previous contributions.
- You can receive benefits if you have a disability which has lasted, or is expected to last, 12 months or more.
- Once awarded SSDI, you are paid retroactively for the time period since your sixth month of disability. However, back pay is retroactive for no more than 12 months prior to your filing date, so don’t wait to file.
- Benefit amount is unaffected by private disability benefits, but is affected by any other public disability payouts, such as Workers’ Compensation. You cannot receive an amount equal to more than 80% of your salary at the time of qualifying incident.
- You may be able to work and earn limited amounts and still receive SSDI.
Long Term Disability
- Private disability insurance provided through an individual or group policy, oftentimes as an employer-provided benefit.
- Administered by a private insurance company or administrator and governed by ERISA laws issued by the Federal Government.
- Benefit amount is typically 50% to 70% of your salary when you were last able to work.
- Most policies contain an elimination period that must be met before benefits are payable. These elimination periods typically vary from 30 to 180 days.
- Benefit amount is often reduced by other disability benefits, including SSDI. If you have been receiving LTD benefits and are awarded SSDI (including retroactive back-pay), your LTD provider will likely decrease your monthly benefit by the amount of your SSDI benefit. It will also likely request overpayment reimbursement for the retroactive time period (effectively capping your total disability benefit amount to the maximum provided by your policy).
- Some policies provide benefits for partial disability allowing limited work.
Many people believe that if they meet the standard for Social Security, they will automatically be eligible for Long-Term Disability Insurance.
While eligibility for Social Security benefits offers a strong case for Long Term Disability Insurance benefits, private insurers have some degree of freedom in setting their own standards for disability. Unum is the largest and best-known Long-Term Disability Insurance provider. Under one particular Unum plan, they will qualify you as disabled if:
“You cannot perform each of the material duties of your regular occupation, and after benefits have been paid for 36 months, you cannot perform each of the material duties of any gainful occupation for which you are reasonably fitted by education, training or experience.”
It should be noted that this is very different than Social Security’s definition.
Social Security’s definition is far more binary- either someone can work or they cannot. Unum’s definition requires that the applicant not be able to do their regular occupation, for a time, while Social Security will not provide benefits unless the applicant cannot do any occupation. However, there is a built-in re-evaluation at 36 months in the Unum plan. This Unum plan essentially gives the beneficiary 36 months before it becomes much more difficult to continue to qualify for benefits.
The Hartford is another major Long-Term Disability insurance provider.
In one, particular Hartford policy, they define disability as the applicant’s inability to perform their current occupation, and re-evaluate at 2 years to see if the applicant can work at any occupation. Most private insurers make a distinction between the applicant not being able to do their previous job and not being able to do any job. This change in the definition of disability typically occurs at 24 months and is a common time for claim denials.
If you have an LTD policy and cannot work you may qualify for disability benefits. Contact the experienced Long Term Disability lawyers at 512-454-4000
Private insurers do not generally have a “listing” or “blue book” like the Social Security Administration has.
Their standards for what constitutes a disabling condition may be far more arbitrary. Furthermore, private insures typically have a built-in conflict of interest. They must decide whether a claimant qualifies for benefits, but if so, they must then pay those same benefits. Many valid claims are denied by these conflicted plan administrators.
One major advantage of having both a long term disability practice and a Social Security Disability practice is the synergy created between the two practices.
Many clients come to me, Lonnie Roach, to hire me for their Long Term Disability claims when they have been denied and I note they probably qualify for Social Security Disability as well. Similarly, some clients hire us to represent them for their Social Security Disability claim when they have been denied, then find they need help with a long term disability claim under their private or ERISA LTD plan. We have found that in many instances, representing a client for both claims helps achieve a better result than separate representations would have been likely to do.
Recently, one of our cases provided an example.
Our client came to us for help with a Long Term Disability claim that had been denied. I noticed that the client likely qualified for Social Security Disability (SSDI) and put her in contact with my partner Greg Reed to help with that claim. The Social Security claim ultimately went to an administrative hearing in which we prevailed. In the meantime, my client’s Long Term Disability appeal had been denied and we were preparing to file a lawsuit. After winning the SSDI claim, however, we changed course and filed another appeal of the Long Term Disability denial including our newly won, fully favorable decision from Social Security. Even though the Long Term Disability appeal period had ended, the carrier reviewed the appeal again and granted it. Our client now receives both the Social Security and Long Term Disability benefits she is entitled to and we did not have to file a lawsuit. Here at Bemis, Roach & Reed, we are always looking out for our clients best interest.
The attorneys at Bemis, Roach and Reed have experience appealing Long-Term Disability claim denials and fighting big insurance companies. Insurance companies have a reputation for denying even legitimate claims, requiring applicants to jump through unnecessary hoops and making seemingly arbitrary judgments. If you are dealing with a difficult insurance company, get help. Contact the long term disability lawyers at Bemis, Roach and Reed today for a free consultation. Call 512-454-4000 and get help NOW.
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Author: Attorney Lonnie Roach has been practicing law for over 29 years. He is Superlawyers rated by Thomson Reuters and is Top AV Preeminent® and Client Champion rated by Martindale Hubbell. Through his extensive litigation Mr. Roach obtained board certifications from the Texas Board of Legal Specialization. Lonnie is admitted to practice in the United States District Court - all Texas Districts and the U.S. Court of Appeals, Fifth Circuit. Highly experienced in Long Term Disability denials and appeals governed by the “ERISA” Mr. Roach is a member of the Texas Trial Lawyers Association, Austin Bar Association, and is a past the director of the Capital Area Trial Lawyers Association (Director 1999-2005) Mr. Roach and all the members of Bemis, Roach & Reed have been active participants in the Travis County Lawyer referral service.
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