One of the most critical issues for people with disabilities is making sure they have healthcare coverage after they've had to quit working
Belleville, Ill. (Vocus) January 20, 2009
Each year, millions of Americans are diagnosed with permanent or long-term medical or psychological conditions that make it impossible for them to work. Too often, however, people simply quit their jobs without knowing their rights, according to Allsup, a leading provider of Social Security disability, financial and healthcare-related services to people with disabilities.
"One of the most critical issues for people with disabilities is making sure they have healthcare coverage after they've had to quit working," said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center.
Gada added that often employees are scared and feel they've personally failed their employers when the reality of their long-term disability hits. As a result, they quit without understanding their rights and leave themselves and their families extremely vulnerable to diminished healthcare and greater financial hardship.
Once people leave their jobs because of disability, their two primary options for continued health insurance are COBRA coverage through their former employer or private health coverage until they become eligible for Medicare coverage. A person with SSDI is eligible for Medicare 24 months after their date of entitlement to cash benefits, as determined by the Social Security Administration.
Two Options for Health Insurance
COBRA coverage provides the same coverage that they had while employed, however, at a higher cost because they are responsible for the entire cost of their health insurance premium plus an added administrative fee.
Private health insurance at the same level of coverage they had while employed generally is even more expensive. Less expensive private insurance may be available but likely covers considerably less with higher out-of-pocket expenses.
"It's important people take control and realize they have rights to the benefits they've earned as employees," said Gada. "Employees are reluctant to speak with their employer about a disability because they're afraid they will be fired if their employer learns they have a disability."
Gada is quick to point out that, first, it's illegal to fire someone for having a disability. Second, if the person's disability forces them to stop working, their employer's benefits package can be a critical resource as they adapt to living with a long-term disability.
Among the questions Gada recommends employees facing severe disabilities ask their employers:
1. Do I have short-term or long-term disability insurance benefits?
Generally, you will know this because you will have paid for at least part of the premiums while you were employed. Your employer's benefits administrators can tell you any wage-related disability benefits you have available to you through your employer. Typically there is a two-week waiting period before short-term disability kicks in during which no money is paid. The length of short-term disability varies based on the plan and is usually coordinated with the waiting period for long-term disability, if this also is available. Long-term disability plans can have waiting periods from 60 to 720 days, with 90 days being common. If you also have long-term disability, it can replace a portion of your wages for up to five years or age 65, depending upon the plan's coverage.
Even if you have private short- or long-term disability coverage, it does not cover the cost of health insurance premiums. Some employers provide some type of health insurance coverage for employees on disability. So make sure to identify your options.
While having employer-provided disability coverage is ideal, the Social Security Administration estimates that 69 percent of employees do not have long-term disability coverage.
2. How many sick days, vacation or personal days have I accumulated?
It's important to know how many paid-time-off days you have accumulated. If you have healthcare insurance through your employer, you may be better off depleting these days before resigning. Any part of the premium you are required to pay will continue to be deducted from your paycheck. This will allow you to continue to keep healthcare insurance coverage at the most affordable rate for the longest period of time.
3. Am I eligible for leave under the federal Family Medical Leave Act?
The Family and Medical Leave Act (FMLA) allows workers to take up to 12 weeks of unpaid leave each year without losing their job for specific reasons, including a serious health condition of their own or to care for an immediate family member who has a serious health condition. While a worker is on FMLA leave, their health insurance benefits must continue. To be eligible for FMLA, the worker has to work for a private company that has 50 or more employees working within 75 miles of the employee's worksite, and the employee has to have worked for the employer for at least a year and have worked at least 1,250 hours during the 12 months immediately prior to the leave. Employees working for a public agency, or public or private elementary or secondary school, regardless of the number of employees, also are eligible for FMLA.
4. Does my state have additional family leave provisions?
In addition to the federal FMLA, some states have enacted their own family leave regulations.
Coverage, eligibility and leave restrictions as well as other requirements differ from the federal regulations and other states. For example, employers in Vermont with 15 or more employees are required to allow individuals to take leave for their own healthcare conditions, compared to 50 employees under federal FMLA. Employees in New Jersey are eligible for leave if they worked 1,000 hours in the past 12 months, compared to 1,250 for the federal FMLA. Employees in Connecticut may take 16 weeks of leave in a 24-month period, compared to 12 weeks in 12 months under FMLA.
5. Will I be eligible for health coverage under COBRA once I leave?
Once you have no option but to resign, you should consider COBRA as a way to continue health insurance coverage. This option depends on whether you are eligible and can afford to do so, and your employer provides it.
Employers with 20 or more employees are required to provide COBRA. To be eligible, you must have been enrolled in the employer health plan while you worked and the health plan must continue to be in effect for active employees. COBRA generally allows former employees and their dependents to keep the group health plan coverage for 18 months after their employment ends. There is an additional 11-month extension available when a qualified beneficiary is determined to be disabled by the Social Security Administration (SSA).
6. When can I apply for Social Security Disability Insurance (SSDI) benefits?
To be eligible for SSDI benefits, you must be able to show you cannot do work that you did previously; cannot adjust to other work because of your medical condition(s); and your disability has lasted or is expected to last for at least one year or result in death. In addition, you must be under full retirement age and insured, which means you have paid into the program (payroll taxes).
However, that does not mean that you must wait a year before you apply. In fact, many people wait too long to apply for SSDI benefits, which adds to their financial hardship.
"If there's no doubt that your disability will exceed 12 months and you will be unable to work, you want to start the process as soon as reasonable," said Gada, adding that it can take several months, if not years, to receive benefits.
"Talk to your employer about your benefits, use your accumulated time off and any leave that's available, and do what you can to ensure you have health coverage," said Gada. "Also start the SSDI application process so that you can ensure you have access to SSDI benefits as soon as possible. With little or no other income coming in, this is absolutely critical."
Allsup, Belleville, Ill., is a leading nationwide provider of financial and healthcare-related services to people with disabilities. Celebrating its 25th anniversary in 2009, Allsup has helped more than 110,000 people receive their entitled Social Security Disability Insurance and Medicare benefits. Allsup employs more than 550 professionals who deliver services directly to consumers and their families, or through their employers and long-term disability insurance carriers.
For more information, visit Allsup.com.
The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.
Dan Allsup, (800) 854-1418 ext 5760
Mary Jung, (773) 429-0940