Long Term Disability Benefit Basics

Long Term Disability Benefit BasicsLong Term Disability Benefit BasicsThe Council for Disability Awareness reports that the average long-term disability absence is 34.6 months. The majority of injuries and illnesses are caused by musculoskeletal injuries and cancer.? Some employers offer a long-term disability insurance plan for their employees, to protect employees and ensure they can returnto work in a reasonable amount of time. What is Long-Term Disability Insurance? Long-term disability insurance covers a portion of an employees income (around 50-70 percent) when the employee has become injured or seriously ill. Its important to note that ifan employee is hurt off the job, workers compensation will not cover them. When an employee cannot work for an extended period of time, a long-term disability plan can help cover a portion of the employees salary. Long-term disability usually kicks in after a short-term disability policy has run out. This happens around 10 to 53 weeks afte r an eligible event, with the average being 26 weeks. The US Department of Labor reports that Most long-term plans (88 percent) have a maximum amount payable and the median maximum payout in 2014 was $8,000 per month. Who Pays for the Coverage? There are a few choices on who can pay for a long-term disability plan. Years ago, many companies paid the full amount for long-term disability. Now the trend has costs shifting away from this method. Depending on which option is chosen, there may be different costs and tax implications Employer fully paid planEmployee fully paid planShared cost plan Coverage Terms and Responsibilities Disability insurance is a benefit that is generally one of the most important parts of a benefits package. While some companies opt to fund ashort-term disabilityor dont even offer one at all, many more employers do offer along-term disability programfunded through a third party administrator such asa disability insurer. Employers can choose how much co verage to elect for their employees. Most plans cover 50-70 percent of monthly salary. The duration of plan benefits can also extend for a while. Some plans only pay out 5-10 years worth of disability to anyone qualified, while others will pay out until age 65, based on a rate schedule. Certain occupations dictate the coverage amounts and the ultimate responsibility of employers to provide adequate benefits for their workforce. The DOL advises that the lower paying occupations in the tafelgeschirr sector tend to be less likely to elect coverage, and they are the most prone to injuries. They are also the occupational group that is most likely to apply forSocial Security disability insurance. Under plan rules, employees filing for disability can only qualify for coverage under certain terms. The main terms are listed below Employees need to work for the employer for a certain amount of time before coverage kicks in.Employees need to work full-time, usually 30 hours or more a week. The following are part of what a long-term disability plan benefits package may include Percentage of monthly salary paid out up to a pre-determined monthly amount (typically between 50 percent to 70 percent of monthly salary).Starts (typically between 90 and 180 days). Depending on plan terms, a person with a disability may be limited to how much coverage they receive and will have to choose another career for which they are suited, in education or training. Another option, usually reserved for highly skilled workers or upper management, is a long-term disability contract that allows a person with a disability to receive benefits for the lifetime of the coverage, without switching professions.