Thought Leadership

Options when disability forces work changes

Know Your Options

  • Short-term or long-term disability coverage?
  • Employer’s employment policies regarding disability leave
  • Disability retirement?
  • What happens with other benefits – health, 401 (k), life insurance
  • Family Medical Leave Act coverage


What Support Do You Have?

  • Review medical records for accuracy and detail
  • Discuss disability with physician
  • Need specific restrictions and limitations
  • Employer notice/job deficiencies


Know Your Disability Benefit Plan Definitions

  • Own/regular occupation
  • Any occupation
  • Residual disability
  • Partial disability


Own Occupation

  • Own occupation is typically 24 months but can vary
  • A typical clause reads: You are limited from performing the material and substantial duties of your regular occupation due to your sickness or injury; and you have a 20% or more loss in your indexed monthly earnings due to the same sickness or injury.


A Typical “Any Occupation” Provision

  • After 24 months, you are disabled when it is determined that due to the same sickness or injury, you are unable to perform the material and substantial duties of any gainful occupation for which you are reasonably fitted by education, training or experience.


Residual Partial Disability

  • You, while unable to perform all of the material duties of your regular occupation on a full-time basis are:
    1. Performing at least one of the material duties of your regular occupation or another occupation on a part-time or full-time basis; and
    2. Earning currently at least 20% less per month than your indexed pre-disability earnings due to the same sickness or injury.


Policy Limitations

  • Pre-existing condition limitation
  • A typical clause:
    1. You received medical treatment, consultation, care or services including diagnostic measures, or took prescribed drugs or medicine in the 3 months just prior to your effective date of coverage; or
    2. You had symptoms for which an ordinarily prudent person would have consulted a healthcare provider in the 3 months just prior to your effective date of coverage; and
    3. The disability begins in the first 12 months after your effective date of coverage.


Self-Reported Symptoms Limitation

  • Claims involving disability symptoms which cannot be measured objectively, and may be limited to a one-year period
  • Example of a self-reported limitations clause:
    1. Self-reported symptoms is defined as “the manifestations of your condition which you tell your doctor, that are not verifiable using tests, procedures or clinical examinations standardly accepted in the practice of medicine.


Mental Illness Limitation

  • Mental illnesses are typically limited to 24 months, unless you are confined to a hospital or institution
  • Example of mental illness definition:
    1. A psychiatric or psychological condition regardless of cause such as schizophrenia, depression, manic depressive or bipolar illness, anxiety, personality disorders and/or adjustment disorders or other conditions.
    2. These conditions are usually treated by a mental health provider or other qualified provider using psychotherapy, psychotropic drugs, or other similar methods of treatment.


What Is Your Policy Worth?

  • Benefit Offsets
    1. Social Security Disability
    2. Workers’ Compensation Benefits
    3. Retirement Benefits
    4. Work Loss Provision in “no-fault” auto insurance
    5. Government Disability


Are Your Benefits Taxable?

  • Disability benefits are fully taxable if the employer paid the full premium
  • Any portion paid by the employee with post-tax dollars is nontaxable


KC Ahrens
Phone: 952-746-2157