Industry Terms:
Activities of Daily Living
Typical activities of daily living include: toileting, bathing,
ability to prepare food, transferring (from bed to walking
etc.), and dressing oneself. Commonly referred to as "ADL's",
these activities are often reported by your physician and
represent the degree to which one can take care of their basic
needs."Disability Insurance
Disability insurance is intended to replace wages, salary or
income during periods of medical impairment which prevent you
from performing the important duties of your occupation or job.
It should not be regarded as retirement income, unemployment
insurance, or worker’s compensation.Effective Date of
Coverage
If your date of disability occurs before the date you are
covered under your group LTD plan, you are not insured, and
therefore would not be eligible for benefits. The effective date
of coverage is generally the first of the year following an
annual enrollment period for which you are covered by your
employers group plan. You are covered by the LTD plan when you
have met the conditions of the "waiting period" as outlined in
the policy.Elimination Period
This is a period of time for which benefits are NOT paid
beginning with your Date of Disability and ending the day after
the last day of the elimination period. All group Long-Term LTD
policies have Elimination Periods in an attempt to eliminate
relatively short term illness from collecting long-term
benefits. Some group STD plans have “no EP” which means you can
begin collecting right away.Many people get confused in
differentiating between a WAITING PERIOD and an ELIMINATION
PERIOD. Remember, a WAITING PERIOD is how long you have to wait
to sign up with your employer for LTD insurance, and an
ELIMINATION PERIOD is how long you have to wait in order to
receive benefits once you file a claim. This is the easiest way
to understand the difference. Group Long-Term Disability
(LTD) Insurance
Most group LTD policies are provided to employees by the
employer who may pay all, part, or most of the premium. The
employer is considered to be the “policyholder” and the employee
is the “certificate holder.” Each employee receives a
“certificate booklet” describing the provisions of their LTD
policy. Group polices are regulated by the Employment Retirement
Income Security Act of 1974. There are some group policies not
regulated by ERISA, but these are in the minority. These types
of polices are not individually underwritten and the risk is
spread out among all members of the insured employer group.
Individual Disability Income Policies
These are individual disability policies, purchased from an
agent, which are individually underwritten by the disability
insurer. The insurance company assumes all of the risk of any
future claims. These polices are not regulated by ERISA.
Member of an Eligible Group
In order to be covered by your employer’s group LTD plan you
must be IN an eligible group. For example, your policy may say
the following: “All full-time employees and salespeople in
active employment.” If you are working part-time, you would not
be covered. Or, it may say, “All full-time employees with annual
basic earning of more than $50,000.” Obviously, if you are a
secretary earning $20,000 per year, likewise, you are not
covered.Minimum Hours Requirement
The numbers of hours an employee must be working in order to be
eligible to receive benefits. Example: “Employees must be
working at least 30 hours per week.” If you go out on claim, and
never return to work, you are not eligible to receive benefits
on a second claim since you were not working the required number
of hours.Non-Integrated Policy
A policy which does not allow benefits to be reduced by other
income such as SSDI, pensions or worker’s comp.Pre-existing
Condition
This wording refers to a condition for “which you received
medical treatment, medical advice, care or services including
diagnostic measures, or taken prescribed drugs for medicines for
your condition during the given period of time as stated in the
plan.” The most common of these is the 3/12 pre-existing period
condition.Let’s see how this works. First you find out what
the effective date of your policy is. Let’s say it is Jan 1,
2003. One year from this date is Jan 1, 2004. If your date of
disability occurs within the time period 1/1/2003 – 1/1/2004,
then the insurance company will “go back” three months from the
effective date (1/1/2003) to 10/1/2002 and ask you to provide
records of treatment from 10/1/2002 to 1/1/2003. This becomes
what is called your “pre-ex period”. If you received treatment
during this period for the same impairment you are now seeking
disability benefits, your claim will be denied. Recurrent
Provision
If you attempt to return to work full time and you are unable to
continue within 6 months of doing so, you may go back out on
claim without having to meet another elimination period. This
information is not often communicated, but it is important if
you just can’t work after you thought you couldSelf-Reported
Symptoms
These are 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. Example of self –reported symptoms include, but are
not limited to headaches, pain, fatigue, stiffness, soreness,
ringing in ears, dizziness, numbness and loss of energy. The
following impairments are often claimed to be self-reported:
Fibromyalgia, Chronic Fatigue, Lupus, Multiple Sclerosis, RSD,
Lyme disease, Migraine Headaches, Tinnitus, Cognitive
Dysfunction, and Depression.Waiting Period
A waiting period is that period of time an employee must wait in
order to be eligible to participate in an employer’s group LTD
plan. Some policy provisions say: “None”. This means you are
eligible to participate in the group plan as of your date of
hire. Others require you to wait 30, 60, 90 days, sometimes up
to a year before you may sign up to participate in the plan.
Generally, you have 31 days to sign up for group LTD insurance
once you become eligible. If you miss this deadline, you have to
file what is called “Evidence of Insurability” which means your
coverage must be underwritten outside of the covered group. |
