Disability insurance is meant to protect employees who suffer an unexpected illness or accidental injury. These policies pay benefits when a physical or mental impairment prevents them from working for an extended period, with benefits being available on a short- or long-term basis.
Short-term disability insurance (STD) typically covers conditions such as recovery from pregnancy, surgery, or a temporary illness or injury. In contrast, long-term disability insurance provides a monthly benefit if you become disabled and cannot work for a longer period of time.
While many claimants only apply for one type of insurance coverage, others start on short-term disability and transition to long-term. In this blog, the disability lawyers at Bross & Frankel, PA explain what you need to know about going from short-term disability to long-term disability and how an LTD lawyer can help.
Short-Term Disability vs. Long-Term Disability
STD and LTD insurances are often included in your employment benefits, but you can also purchase them directly from the insurance company. Although you don’t need to have both types of coverage under the same insurer, this arrangement can make it easier to transition if you have to go from short-term to long-term coverage.
Typically, short-term disability coverage begins after you have been unable to work for a certain amount of time. The exact period will depend upon the terms in the policy, but it is usually one or two weeks, and coverage normally lasts between three and six months. Short-term disability plans can also cover the waiting period before long-term disability benefits are paid out.
Long-term disability insurance, on the other hand, requires you to be disabled for 90 to 180 days before you are eligible for benefits, which can last for a number of years or until you reach retirement age. You may have to transition to long-term disability benefits if you receive the maximum short-term disability benefit period under your policy.
Differences Between STD and LTD Definitions of Disability
Although STD and LTD plans generally provide similar benefits, there can be some differences between them. The primary difference between the two policies is their definition of a qualifying disability.
Most short-term disability policies require you to be unable to perform the duties of your job, which is generally described as the ‘own occupation’ standard. Additionally, STD policies often require you to receive treatment throughout your disability, so that your reliance on benefits can be minimized.
The definition of long-term disability, on the other hand, can be applied to your own occupation or any type of employment at all. In order to continue receiving benefits after a certain period, you must be unable to perform the duties of any job whatsoever. LTD policies typically transition from “own occupation” to “any occupation” after 24 to 48 months.
Limitations With STD to LTD Transition
If you’re going from short-term disability to long-term disability, you should be aware that LTD policies can be more restrictive than their STD counterparts. Here are some points to consider:
- Many LTD policies have restrictions that limit the types of conditions that can qualify for benefits or the length of time you will receive benefits.
- There are certain disabilities that are covered by your STD policy but not by your LTD policy. A long-term disability policy may not cover a condition that existed before you obtained the coverage, for example.
You should not assume that just because you were approved for short-term coverage, you will also be approved for long-term disability. LTD benefits are a bigger financial liability for the disability insurance company because it may have to pay for a longer period of time. For this reason, the claim handlers often become more aggressive when people are going from short-term disability to long-term disability, resulting in many wrongful denials.
A New Jersey disability lawyer at the law firm of Bross & Frankel, PA can help you review and understand the terms of your long-term policy, guide you through the process of transitioning from one policy to another, and protect your interests when you need to appeal a denial.
Transitioning from STD to LTD With the Same Insurance Company
Going from short-term disability to long-term disability may be easier when the same insurance company handles both policies. An insurer that covers your STD benefits will have already determined that you are disabled. In addition, they will likely already have a substantial amount of medical records and/or reports confirming your claim.
In such cases, the insurance company will assess your long-term disability claim before your short-term disability benefits end, so you won’t have to file a new claim. Some paperwork may still be required, however.
To get an idea of what the process may look like, here is an overview of how the Guardian Life Insurance Company of America processes a transition from STD to LTD benefits:
- You must be receiving benefits under a Guardian STD claim AND have a Guardian LTD plan. Your attending doctor must also have certified your disability beyond the STD maximum duration period.
- Once you apply for LTD benefits, your STD case manager will review it and consult with a medical specialist. They will then contact you to discuss the transition.
- Your Case Manager will forward the claim to a Guardian LTD Case Manager after receiving your approval. A transition information letter will also be sent to you.
Regardless of which insurer you use, the information you reported in your STD claim must be consistent with the information you report in your LTD claim. Even if you have long-term and short-term policies with the same insurance carrier, each plan probably has different eligibility standards, so make sure you understand the process, criteria, and other relevant factors.
STD to LTD Transition with Different Insurance Companies
Those with short-term disability coverage provided by a different insurance company than their long-term disability coverage may find it more difficult to make the STD to LTD transition. This is because medical records and reports submitted to support the short-term disability claim will not be immediately available to the LTD insurance company, so you’re essentially starting over.
You will need to submit all of the information you originally provided to support your STD claim as well as any updated information confirming the long-term impact of your injury or illness on your ability to work. This means you may have to send in all of your medical records and reports as well as claim forms. Be sure to demonstrate that you meet the LTD policy’s definition of disability, as this step can mean the difference between approval and denial.
The importance of reviewing your LTD policy cannot be overstated, especially if your LTD coverage is with a different company. This is because their requirements and standards can differ significantly from the prior company that provided your short-term disability coverage.
Although submitting a copy of your short-term disability approval paperwork can help demonstrate that you’ve been found disabled by another insurer, never assume that because one company approved you for STD benefits, another one will automatically approve you for LTD. It is important that you provide this new insurance company with as much evidence as possible to prove that you are entitled to long-term disability benefits.
What is ERISA?
The Employee Retirement Income Security Act (ERISA) regulates most employer-sponsored group welfare plans. If you file a long-term disability claim under an ERISA plan, this law will impact the rules that apply and which courts can hear your case. (For instance, ERISA claims go through federal and not state court.)
A long-term disability lawyer with experience handling ERISA cases can help you file a claim or appeal against this type of plan. The rules and regulations governing your plan will be different if it is not covered by ERISA. In the event that you’re having difficulties receiving your benefits under your non-ERISA insurance policy, you should consult with a qualified ERISA lawyer as soon as possible.
Why is My LTD Carrier Asking Me to Transition to Social Security Disability Benefits?
You may be required to file for Social Security Disability Insurance benefits if you are receiving long-term disability benefits under a group or individual LTD plan. Most LTD policies allow the insurer to reduce your LTD payments based on your Social Security benefits.
For example, if you receive $1,800 in LTD benefits per month and are approved for $900 in Social Security disability, you’ll still be collecting the same amount of disability, but $900 will come from Social Security while your LTD insurer pays the other $900. This reduction in LTD payments is known as an offset.
It is important to note that individual policies (as opposed to group disability plans provided by employers) tend to be more tailored to the needs of the individual purchaser. There are still many individual plans with offsets, but others might not include any offsets at all, not even for Social Security disability. Because long-term disability policies vary widely, it is essential that you read your policy carefully and consult a lawyer if you’re unsure about your rights.
Why Should I Hire a Long-Term Disability Attorney?
A third of U.S. workers in the private sector have long-term disability insurance provided by their employers or pay for it themselves. Nevertheless, if you are unable to work, even if you have long-term disability insurance, your claim may be denied. Those things shouldn’t happen, but they do.
In our experience as disability benefits attorneys, we see this happen all too often. Your insurance company may claim that your injury does not qualify as disabled under the policy’s definition. After going through the administrative appeals process, you can sue the insurance company that denied your long-term disability claim. With the help of an aggressive long-term disability benefits attorney, you can navigate the appeals process and receive the benefits you deserve.
At Bross & Frankel, PA, we can support your claim by:
- Analyzing your policy to confirm the definition of disability you must meet as well as any restrictions or conditions.
- Flagging potential issues or complications that can affect your LTD claim.
- Navigating laws surrounding the claim, such as ERISA.
- Gathering evidence for your claim.
- Holding the insurer accountable to the terms of the policy.
Long-term disability claims can be challenging, especially if you are managing a disabling health condition at the same time. By allowing us to handle your long-term disability case, we can ease your burden so you can focus more on your health.
Questions About Going From Short-Term Disability to Long-Term? Get a Free Consultation From a Disability Lawyer.
At Bross & Frankel, PA, our disability lawyers have extensive experience handling both short-term and long-term disability claims as well as helping clients transition from STD to LTD. If you need to file for LTD payments or your application for disability benefits was denied by the insurer, schedule a free consultation by calling 856-210-3345 or contacting us online. We will review your case, explain your options, and help you fight for the long-term benefits you need and deserve.