With an increasing number of highly effective therapies available, many people with MS will maintain normal or near normal function for their entire lives. However, the sobering fact is that for all 20-year-olds—whether or not they have been diagnosed with a chronic disease—more than one in four will lose the ability to work prior to retirement age. Thus, it is a good idea for everyone to know how to protect themselves should they loose the ability to work and to take whatever steps make sense to increase that protection.
There are two main sources of protection: private disability benefits and Social Security Disability benefits.
Private Disability Insurance Benefits
- Obtain private disability benefits through your employer if you can. People with a potentially disabling disease like MS are not generally able to buy private disability insurance. However, many employers offer disability insurance as part of a broad compensation package. This kind of protection is so valuable that it should be weighted heavily when making employment decisions. This may be your only opportunity to have access to private disability benefits. When compared with disability programs administered by the government (Social Security), private benefits may provide a larger income stream, a shorter exclusion period, and may be easier to access. Such private policies can replace 50 or 60 percent of a worker’s salary.
- Purchase additional coverage where possible. Sometimes an employer will provide an opportunity to increase coverage for employees who are willing to pay for it. If you can afford the additional coverage, purchasing it is an excellent idea.
- Learn about the exclusion for pre-existing conditions. Most policies provide an exclusion for pre-existing conditions. However, pre-existing conditions will generally not prevent claims
for disability benefits after the first year of work. But be careful, because time off from work may not be included in this calculation. Thus, if you have been employed for 12 months, but were out of work (e.g., through the Family Medical Leave Act) for one of those months, you may find that you have not been working long enough to qualify for disability benefits. Check with your specific disability insurance policy for additional details.
- Understand the difference between “Own Occupation” and “Any Occupation” Policies. Many private disability policies—the best ones—will provide benefits if you become unable to perform the essential functions of your current work. For example, a neurosurgeon may be rendered entirely unfit for his job because of a slight tremor. Although the neurosurgeon could probably perform other work, for those with an “own occupation” policy, it doesn’t matter. Other policies are referred to as “any occupation” policies and will only provide a benefit if the Claimant can prove that they are unable to do other work as well. Most policies are hybrid policies. Hybrid policies typically provide coverage for those who cannot perform their own occupation for a period of time (e.g., 24 months) and then convert to an “any occupation” policy. Often this is further defined as an inability to earn 60% of your previous earnings. Understanding these issues will help you choose the best disability coverage and will help you plan if you lose the ability to perform your current work.
- Applying for Social Security while receiving private long-term disability benefits. Most long-term private disability policies require–as a condition of continuing benefits—that you apply for Social Security Disability Insurance (SSDI) benefits. In general, the standard for proving disability for SSDI is higher than it is for private long-term disability policies, so it’s possible that you may be found disabled for private disability but not for purposes of Social Security. However, if you do qualify for both, the monthly benefit you receive from Social Security will generally reduce the amount that you receive from the long-term disability insurer. For most people who receive private disability benefits, an award of Social Security will not increase their monthly income.
Even so, it is important to get Social Security benefits if you qualify for two reasons. First, SSDI beneficiaries are entitled to Medicare 30 months after their disability onset. For most people, this is a critical benefit. Second, a finding of disability will result in a “disability freeze.” This protects your retirement benefits, which are calculated based on your average earnings. Without such a freeze, disabled people would be at risk for receiving diminished income at retirement age, when disability benefits cease.
Many long-term disability policies encourage beneficiaries to apply for SSDI benefits using a particular company and indicate this is a free service. Be wary of this. Most of the time, these referrals are to non-attorney advocates. You are generally better off hiring an experienced attorney. Because of the way Social Security attorneys are paid, hiring an experienced Social Security lawyer is also free to you. You have a right to choose your own counsel, despite the language used by private disability insurance companies.
Social Security Disability Insurance (SSDI)
The most important disability program, by far, is Social Security Disability Insurance because most people who become disabled do not have private disability policies.
- Understand whether you are eligible for SSDI. You are eligible for Social Security Disability benefits if you have worked long enough, paid Social Security taxes, and importantly, have worked recently enough. Most people who have worked full (or even part-time) and paid taxes (“FICA taxes”) most of their adult lives will be covered through Social Security.
- Understand the consequences to withdrawing from the workforce for personal or family reasons. People who have not worked in the five years prior to becoming disabled may not be covered. This is a potential trap for stay-at-home (work in the home) spouses. Consider a woman who plans to stay at home with her children for a period of time and then return to work. If she becomes disabled after five years and prior o returning to work, she will have lost the ability to file for Social Security Disability benefits. It is possible to maintain eligibility by working part-time. Earning just $6300 per year will maintain eligibility. If you have MS and can work, consider at least part-time work or limit your hiatus from work to less than five years.
- Understand the risk of transitioning from a private employer to become a public employer. Those who work for government agencies and public entities typically pay into Public Employees Retirement Association (PERA) instead of Social Security. In general, this is fine; PERA also pays disability benefits when someone becomes disabled. Rarely, however, a significant problem arises where somebody who has paid into Social Security takes a break and returns to work as a public employee, such as a teacher. If someone makes this change and becomes disabled shortly thereafter, he or she may not be insured through either program. PERA generally requires an employee to work five years before becoming eligible for disability benefits. An employee moving from Social Security to PERA may wind up unprotected in certain situations.
- Be prepared for at least a five-month income gap—or longer—if you become disabled and depend on Social Security. Social Security has a five-month exclusion period. If your claim is favorably determined, your best-case scenario is to receive an income after this five-month exclusion. You may need to prepare for this gap, especially if you do not have other support or private short-term or long-term disability benefits. Social Security’s standards are very demanding and many claims (65%!) are initially denied. In that case, you may need to request a hearing before an administrative law judge. Unfortunately, getting a hearing scheduled generally takes at least a year. If this becomes necessary, you may have to struggle for approximately 18 months without an income.
- Make sure you have a clinical team that will support your disability application. In addition to clinical expertise, you will occasionally need advocacy from your clinical team. A successful disability claim will depend on a strong medical record and support from your clinical team. The clinical team at the Rocky Mountain MS Center understands the importance of advocating for their patients. Many other community neurologists in the Denver metropolitan area and Fort Collins are similarly supportive. However, some clinicians “don’t do disability” paperwork, and apparently don’t view such paperwork as their responsibility. While it is understandable that some clinicians prefer to avoid involvement, a refusal to help in this area is unacceptable and may result in financially ruinous consequences for you. Make sure that your clinical team will support you if necessary.
If you are considering applying for disability benefits (Social Security or private benefits), the stakes can be enormous. You should consult a lawyer with expertise in these matters.
Mr. Stewart directs the RMMSC’s Disability Law Program. For a free consultation, please contact RMMSC’s Disability Law Clinic at (720) 301-9708.