About Disability Claims in Organizations
Disability insurance claims pay a portion of an employee's income when the person is ill or injured and cannot return to work. Disability insurance does not cover individuals who are ill or injured due to events that occur on the job. This protection falls under the auspices of the Workmen's Compensation Fund.The Employment Retirement Income Security Act of 1974 (ERISA) protects workers' rights and guides how employers must process disability claims.
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Disability Benefits
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As part of the benefits package to attract and retain good employees, many companies offer health insurance, dental and vision coverage and life insurance benefits. Most health insurance packages include short-term and long-term disability insurance. The employer must make information about the plan to the employees in writing, including eligibility criteria for coverage.
Short-term Disability
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Numerous employers provide short-term disability (STD) to their workers. STD pays a portion of an employee's salary from the time the individual exhausts the allowable sick leave to the time long-term disability starts -- typically 90 to180 days. Either the employer funds the benefits and has an outside vendor administer the program or an insurance company handles the entire process. Employers usually take a hands-on approach with STD. Usually, STD equates to 50 to 75 percent of the person's gross weekly salary at the time the time of the disability.
Benefits do not include overtime, commissions or bonuses. Larger firms pay as much as 100 percent of the salary in accordance with the length of employment and decrease to the lower amounts. Employers usually time the beginning of long-term disability periods with the expiration of the STD before the waiting period for shot term disability
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Long-Term Disability
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Some large firms self-insure and manage their own long-term disability (LTD) plans, but usually they have an insurance company administer the process. LTD claims receives much more scrutiny. LTD provides individual with benefits after 180 days of disability. Some states allow the payment of LTD simultaneously with STD. The purpose of LTD is to provide income for an individual who cannot work for six consecutive months or longer because of an injury or illness. The claimant has to make objective medical evidence available to the plan's administrator or insurance company to qualify for LTD.
The administrator determines the type of documentation and the frequency of the documentation update. These plans pay 60 to 80 percent of the pre-disability wages for a defined number of years or until age 65. Typically, the plan's administrator uses factors such as job description, job duties, pertinent medical information from a physician, information from the employer and employee and the definition of total disability to make a decision. The claimant must provide medical information throughout the claim period to continue to qualify for benefits.
Disability Claim Appeals
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The plan summary must contain information instructing the participant on how to file an appeal for denial of claim. File within the designated time as stated in the plan. Write a letter stating why the decision is incorrect and include a copy of the denial letter. In addition, provide the medical evidence that supports the disability diagnosis, treatments received and the nature of the disability.
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References
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