Long-Term Disability in Virginia
June 30, 2022
The Council for Disability Awareness (CDA), which represents 75 percent of all long-term disability (LTD) insurers, reports that every seven seconds, a working-age American will experience the onset of a long-term disability. In fact, the average 40-year-old faces a 20 percent chance of incurring a disability before reaching age 65 that would be considered long-term (lasting more than 90 days).
Fewer than half of all U.S. employers offer long-term disability insurance policies, and among those, some will pay partially or fully for the coverage—but most will shift the payment burden to the employee. Employees who are not offered employment-based policies can purchase them on the open market.
Many of the most prominent disability insurers who provide both types of policies include Hartford, Unum, MetLife, Cigna, and Lincoln National. There are differences, however, between employer-sponsored and private policies when it comes to the claims and appeals process, as well as tax implications.
If you need help with filing a disability insurance claim in Virginia, contact me at Victor Peña Law PLLC. My firm handles cases in any city in the U.S.
The Basics of Long-Term Disability Insurance
LTD policies can be offered by employers or employees can purchase them on their own. In Virginia, if you’re a state employee, the Commonwealth offers what it calls the Virginia Sickness and Disability Plan (VSDP).
Employer-sponsored plans are covered by a federal law known as the Employee Retirement Incomes Security Act (ERISA), which established standards for those policies in terms of the claim-filing process and the appeals process. Private LTD insurance plans are not covered by ERISA.
Either type of LTD policy, however, is designed to offer you compensation should you develop a disability that keeps you from working. Usually, there is what is called an “elimination period,” which is a period of time during which you must be out on disability before you can receive benefits (compensation) to replace—at least partially—the wages you are no longer earning at work.
The elimination period can be anywhere from 3 to 26 weeks. When the benefits do begin, the amount of compensation you will receive varies, but it’s usually in the range of 60 to 70 percent of your former average weekly earnings. The Summary Plan Description (SPD) you receive when you enroll in your LTD plan should describe both the elimination period and the compensation percentage available.
Another clause in your LTD policy may deal with two definitions of work. One is called “own occupation,” and the other “any occupation.” Depending on the terms of your policy, your insurer may pay you benefits for your disability for a set period of time—say 24 months—when you are unable to work in your “own occupation.” After that period runs out, the policy may require you to work in “any occupation” for which you are capable, and then reduce or eliminate your benefits.
Virginia Law Covering Disability Insurance & Qualifying Disabilities
Virginia does not mandate that private employers provide disability insurance. Therefore, to understand what you’re signing up for, you need to review any documents provided to you, including the Summary Plan Document (SPD), or even the full policy itself.
Generally speaking, a wide range of disabilities can qualify you for LTD benefits, including:
Cancer: breast cancer, lung cancer, Lymphoma, Leukemia, Melanoma
Autoimmune Disorders: Lupus, Multiple Sclerosis, Rheumatoid arthritis, Type 1 Diabetes
Neurological Disorders: Stroke, Epilepsy, Migraines, Peripheral neuropathy, Bell’s Palsy
Mental Illness: Depression, anxiety, Bipolar disorder, Post-Traumatic Stress Disorder (PTSD), personality disorders
Chronic Illness: Fibromyalgia, asthma, chronic lung disease, kidney disease, heart disease
Degenerative Diseases: ALS, Parkinson’s, Osteoarthritis, Huntington’s disease
Other Conditions: Deafness or hearing loss, blindness or vision loss, chronic pain, chronic fatigue
If one of these diseases or conditions is such that you can no longer perform the duties of your job on a long-term basis, you may qualify.
Filing an LTD Claim in Virginia
Each insurance company will have a form you file to begin the process of claiming LTD benefits. If you just fill out the form and send in it, however, you’re likely to be bombarded with requests for verifying doctors’ statements and medical evidence, which might include everything from X-Rays and MRIs to test results and records of consultations with medical and even vocational specialists. You should begin assembling all these records and medical/vocational evidence as soon as possible, with the help of a long-term disability attorney.
Your insurance company will no doubt have many questions to ask even after you’ve submitted all the evidence you can gather. They may even order you to undergo an independent medical examination (IME) with a physical or medical group of their choice. The IME will be used to determine if your claim is justified.
How Benefits From Other Sources Can Affect Your Claim
Many disability insurers will require you to apply for government benefits from the Social Security Administration (SSA), with two alternate programs known as Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) available. Typically, the insurers will then deduct this amount from the benefits they are providing.
Will My Benefits be Taxable?
If you paid all the premiums on your LTD policy in Virginia, your benefits will not be taxable because you used “after-tax” funds to pay for the policy. If your employer, however, paid any part of the premiums, that part will be taxable because they paid with pre-tax dollars. Thus, if your employer paid 30 percent of your premium, you will be taxed on 30 percent of the benefits you receive.
If you need to file an LTD insurance claim anywhere in Virginia, contact me at Victor Peña Law PLLC. I serve clients nationwide from my office in Fort Lauderdale, Florida.