SHORT TERM DISABILITY, LONG TERM DISABILITY, AND SOCIAL SECURITY

I bet you don't think much about disability.  Yet, 1 out of 4 persons will become disabled before they retire.  So, there's a good chance you and your family will find yourselves out of work, out of income, and with all the regular expenses still pressing down on you.

No problem, there's always Social Security, right?

Well, not exactly.  

Social Security disability (SSDI) doesn't pay the first 5 months of disability due to the waiting period.

On top of that, Social Security is very difficult to get--and takes a long time to get approved.  It's a bureaucratic nightmare.  Some people wait 2 years or longer to get a check and some never get one.  The rules to qualify for Social Security disability are the hardest of any disability program in the world.

So, let's talk about other types of private disability insurance that could tide you over, at least until you get Social Security.

SHORT TERM DISABILITY (STD)

Short Term Disability (STD) insurance is usually provided by your employer.  Not all employers offer it, but many do.  If your employer pays all the cost of STD premiums, you may not even be aware that you have it.  Depending on the policy your employer has purchased, STD may pay up to two-thirds of your salary if you become disabled.  These payments may continue for 3 to 6 months, depending on the terms of the policy.  

Some things to be aware of with Short Term Disability at work:

• You usually must apply for benefits and get your doctor to submit forms
• STD is often easier (and faster) to get started than Social Security.
• STD is sold by private insurance companies, usually to businesses, to cover their employees.  Many insurance companies sell it.
• Receiving STD will not hinder Social Security claims and will not make you ineligible for SSDI.

LONG TERM DISABILITY (LTD)

Long-Term disability is also sold by private insurance companies to employers who want to protect their employees.  LTD kicks in when Short Term Disability has maxed out (usually after 3 to 6 months).  Long term disability may be a bit harder to qualify for than STD was.  However, most LTD benefits are easier to get than Social Security disability (SSDI).  Some employers may only offer STD and not LTD.  Others may have both STD and LTD.  

Some points to consider about Long Term Disability (LTD) at work:    (These are general statements and may not apply to everyone.  See Disclaimer below).

• Coverage may be offered free by your employer or you may have to request enrollment and contribute to the cost to be covered.
• You generally cannot enroll in LTD after a disability strikes.  (You must get it before you need it, like all insurance).
• Each employer has a policy from the insurance company which spells out coverage terms and conditions.
• Most LTD policies require the worker to file for Social Security Disability (SSDI) benefits as soon as LTD benefits start to pay.
• You, the disabled employee, are responsible for filing for SSDI and your LTD company will generally require you to appeal a denial by Social Security in order to keep STD payments.
• You may hire your own advocate or attorney to represent you with Social Security; you don't have to us the insurance company's lawyer.
• If you eventually get Social Security benefits (SSDI), your LTD company will usually reduce its payments by the amount of the SSDI award.
• Getting LTD payments will NOT interfere with your ability to receive SSDI benefits.
• Be careful about voluntarily giving up any LTD benefits, even after you start getting an SSDI benefit.  
• Obligations of the LTD company may not completely end when you get approved for Social Security disability.  They may still owe you payments, depending on your policy's terms.

SOCIAL SECURITY DISABILITY (SSDI)

Social Security Disability Insurance (SSDI) is a government program provided by the 1935 Social Security Act. (The disability provision wasn't added until 1956).  It is paid for by a payroll withholding tax called FICA.  Individuals become covered under SSDI by working and contributing FICA taxes from their paychecks.  You must work a certain amount of time to earn enough work credits to be covered.  Generally, a person must have worked at least 5 years out of the most recent 10 -year period.  Young workers may need fewer work credits. Individuals who have not worked recently may not be covered by Social Security disability. Find out by calling your local Social Security office.  By the way, Social Security calls their disability plan "Title 2" because it's covered under Title 2 of the Social Security Act.

General Requirements to Get SSDI:  (1) You have earned enough work credits to be covered by Title 2.  (2) You have not yet reached full retirement age.  (3)  You have a medically determinable impairment which has lasted at least 12 consecutive months, is medically expected to last at least 12 straight months, OR will end in death.  (4) You are not currently working at substantial gainful activity.

Even though you may feel that you are disabled and qualify for SSDI, Social Security will often dispute your claim.  Approximately 70 percent of all SSDI claims will be denied on the initial application.  The proper response is to file an appeal right away.  Also, there is a 5-month waiting period for SSDI, meaning that Social Security will not pay the first 5 full months of an SSDI claim, starting with the date of disability onset.  For example:  If Social Security agrees that you became disabled on March 12th, your waiting period will run from April through August.  You would not be eligible for a payment until September.  Since payments are one month in the arrears, the September payment would arrive in October.  So, if everything goes well with Social Security, you're on your own for almost 7 months!  That's if you get approved as quickly as the law allows and no appeal is required.

If your SSDI claim requires an appeal, it can take an additional 12 months or more.  So, you can see why Short Term Disability and/or Long Term Disability from another source could be very, very helpful while you wait on the painfully slow Social Security process.

DISCLAIMERS

The Forsythe Firm does not give legal advice concerning insurance policies, companies or insurance matters.

We are not licensed insurance agents.

Statements herein are general in nature and are not to be taken as legal advice in any situation.

We have obviously not read your STD or LTD policy and our general statements may or may not apply to all policies or plans of insurance, including yours.

Your or your employer's  insurance policy/contract governs all benefits, terms, payments, qualifications and stipulations. Get a copy and read it carefully.