By Molly Friedman, Esq., 301.563.6685
If you are no longer able to work due to illness or injury, you may be eligible to receive benefits so that you can focus on your health. Two common forms of benefits are Long Term Disability (LTD) and Social Security Disability Insurance (SSDI). Participation in a Long Term Disability Insurance plan does not preclude you from also being eligible to apply for Social Security Disability benefits.
Most individuals are familiar with Social Security Disability Insurance, referred to frequently as SSDI or SSD. SSDI is a federal program, administered by the Social Security Administration (SSA). As a Federally administered program, the application process and eligibility are standardized. In broad terms, in order to qualify for SSDI benefits, you must 1) have a sufficient work history and 2) experience a medical condition that prevents you from working, and is expected to last at least year.
Group Long Term Disability Insurance is a private insurance benefit offered by many employers. You may also purchase individual LTD insurance that only covers you. LTD is typically administered through a private insurance carrier. According to the Bureau of Labor Statistics, in 2018 approximately 35% of workers had access to long term disability insurance.[1] Eligibility, the application process, and the definition of disability are established by each individual insurance carrier and specific individual plans, and are laid out in detail in a plan document and policy. The decision process is also generally faster, as approval rates on initial applications are much higher than for Social Security Applications, which are notoriously low.
Eligibility to Apply
Before even getting to the complex medical issues for both sets of benefits, you must be eligible to apply. In order to potentially be eligible for SSD benefits, you must have a worked a sufficient amount in eligible positions within recent years. This is measured by how many work credits you receive. You can earn up to 4 work credits per year. For individuals 31 and older, you must have earned at least 40 work credits, 20 of which were earned within the last 10 years.
For LTD benefits, there is no requirement for a work history, with a caveat. Frequently, you may be barred from receiving LTD benefits if the claim is based on medical condition that you received treatment for within the first several months of plan participation, known as a pre-existing condition clause.
Definition of “Disability”
One crucial area of difference is in how disability is defined in terms of eligibility to receive benefits. Determinations for SSD are a step by step process. First, you must prove that you suffer from a medically determinable impairment that will last at least 12 months. There are certain types of illnesses and medical conditions, specifically defined by the Social Security Administration, where, if you are able to provide the medical evidence to show you meet the qualifications, you may qualify for SSDI benefits. If you don’t meet a listed impairment, that doesn’t mean you don’t qualify for benefits, which can be a common misconception. Instead, you must move on to the next step, proving that, due to the severity of you impairment(s), you cannot perform any work in the national economy. If you are 55 years or older, SSA will make the presumption that, if you are unable to perform past relevant work, you cannot adjust to other positions. The definition of eligibility does not change based on how long you have been receiving benefits.
However, a change in definition for eligibility is common for LTD plans. How each plan defines disability can varies, and you should always check the exact language in your policy. Generally, for the first 24 months, you must prove that, based on illness or injury, you are unable to perform the duties of your own occupation. Put plainly, you cannot do your own job. After the first 24 months, or outlined in your policy, the definition of disability may change, and require you to be unable to do any occupation for which you are eligible based on your skills and training. Policies frequently include additional language requiring that the earning potential of an eligible position be above a certain threshold. This is much narrower than Social Security Disability.
Amount of Benefits
For SSD, the amount of your benefit is calculated based on how many work credits you earned and your earnings from your employment. Benefits are capped at a certain amount, regardless if you have a longer work history or higher salary. As of June 2021, the average monthly SSDI benefit award is $1,461.75.[2] Benefits are adjusted annually based on the cost of living, set by the Consumer Price Index for Wage Earners and Clerical Works, this is referred to as the COLA adjustment. There is a five month elimination period after the onset date determined by SSA before payments begin.
For LTD benefits, there is also an elimination period from the date of disability to when payments begin. This vary from plan to plan, but is typically 90 to 180 days. Calculation of benefit amount also varies from plan to plan. How benefits are calculated is outlined in each individual plan, but generally an LTD plan will pay about half to 75% of your working salary. There is no COLA adjustment. You LTD carrier will generally require you to apply for SSD benefits. Generally, private LTD insurance policies include an offset prevision, where your LTD benefit is reduced by the SSD benefit you receive.
While there is some overlap, the type of evidence you provide and approach for both of these processes varies. A professional disability attorney, like at Andalman and Flynn, can help you navigate the nuances in the application process, and figure out the best way to ensure you obtain the benefits you deserve.
[1] https://www.bls.gov/opub/ted/2020/short-term-and-long-term-disability-insurance-for-civilian-workers-in-2020.htm
[2] https://www.ssa.gov/oact/STATS/dib-g3.html
About Andalman & Flynn, P.C.: Founded in 1998 in downtown Silver Spring, Maryland, Andalman & Flynn has forged a distinguished reputation for legal excellence. The firm represents individuals seeking disability benefits throughout the country and practices family law throughout Maryland and the District of Columbia. The firm focuses on cases that impact the rights of everyone, and are there for clients when responsive legal help is most critical. The firm has provided legal analysis on national and local television and radio, and their attorneys often testify before legislative bodies and are routinely invited to contribute to prominent legal publications. For more information about Andalman & Flynn, please visit the website at andalmanflynn.com or call 301.563.6685.