Long-Term Disability (LTD) Insurance

Private LTD Insurance

You may have long term disability coverage, or “LTD” through your employer or you may have purchased a personal LTD policy. LTD through your employer is almost always administered through an insurance company. You are required to complete the insurance company paperwork (your employer’s human resources office may help), including documenting your disability, and the checks come from the insurance company. LTD usually begins when short term disability ends, or at a set time period such as three or six months after your injury. LTD usually only pays a percentage of your salary and the percentage it pays may vary over time. Also, some LTD policies are time limited (e.g., for two years). Some LTD policies have “vocational rehabilitation” benefits and “work incentive clauses” that may help you make a transition back into work. You should ask your claims manager.

Social Security Disability Income (SSDI)

One form of LTD is Social Security Disability Income, or SSDI.  SSDI  is funded through payroll taxes and is essentially an LTD program run by the Social Security Administration. To be eligible, you must have worked enough “qualifying quarters” where you paid the payroll tax, and  you must document that you are totally and permanently disabled (which means for at least one year) with respect to your ability to perform “substantial and gainful activity (SGA).”  In 2013, SGA is defined as not being able to earn over $1040 a year (more if you are blind) by working at any job in the U.S. economy. So eligibility is not determined based on whether you can work at your job, but rather whether there is any job in the US economy where you could earn over SGA. If your SSDI application is denied, you have the right to appeal. Your benefits are paid retroactively to the date of application or the date SSA determines that your disability began. You are eligible for Medicare when you have qualified for SSDI. Currently there is a 24 month waiting period, but that may be revised.

Maintaining Your Benefits While Returning to Work

Once you begin receiving SSDI, there are work incentive programs that allow you to earn some income without losing your eligibility for SSDI and Medicare, and there is an option to try out a job and see if you can do it.  If it turns out you cannot, you have not lost your SSDI. If you are about to work, there are options for extended work trials.  If you are working with a vocational rehabilitation counselor from a state agency, they may be able to help you with the SSDI work incentive programs. Many LTD policies require you to apply for SSDI and then reduce your LTD benefits by the amount of your SSDI award.To learn about SSDI and how to apply, go to www.socialsecurity.gov/pgm/disability.htm