Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 0
Chapter 16
Disability Income
Insurance and
Disability Benefit
Programs
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 1
Learning Objectives
Define terminology and abbreviations
pertinent to disability insurance and
disability benefit programs.
Describe benefits and exclusions
contained in individual and group
disability income insurance.
Define the words temporary disability
and permanent disability, as related to
each type of disability program.
Name federal disability benefit
programs.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 2
Learning Objectives (cont’d.)
 Differentiate between SSDI and SSI.
 State eligibility requirements, benefits,
and limitations of SSDI and SSI.
 Explain disability benefit programs for
disabled active military personnel,
veterans, and their dependents.
 Name states that have state disability
insurance plans.
 State eligibility requirements, benefits,
and limitations of state disability plans.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 3
Learning Objectives (cont’d.)
Explain voluntary disability
insurance plans.
Recognize forms used for
processing state disability plans.
Describe topics and contents of a
medical history report.
List guidelines for federal, state,
individual, and group disability claim
procedures.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 4
Chapter 16
Lesson 16.1
Disability Claims
Disability income insurance
Provides benefits under certain
conditions when the insured is
unable to work due to illness,
disease, or injury.
Does not provide benefits if the
insured is unable to work as a result
of a work-related event.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 6
History of Disability
Insurance
 1880s – emergence of disability income
policies for accident and illness
 early 1900s – first noncancelable policy
 1956 – Congress extended Social Security
program to disabled adults over 50 years
old
 1965 – Social Security program expanded
to cover workers regardless of age
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 7
Disability Income
Insurance
Individual
 Provides specific income if disabled.
 Insured pays premiums.
 Medical expenses not covered.
 Disability must not be work-related.
 Insured must meet specific policy
criteria.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 8
Disability Income
Insurance (cont’d.)
Waiting period
 time from beginning of disability to
beginning of first benefit payment
 Benefit period
 maximum span of time that benefit will
be paid to the disabled party
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 9
Disability Insurance Benefits
Residual benefits
 Benefits are paid if disability is partial or limits the
capacity to work full-time.
Supplemental benefits
 Specific provisions may increase payments.
Accidental death and dismemberment
benefit
 Special clause addresses accidents that result in
death or permanent disability.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 10
Types of Disability
Total disability
 Person cannot perform most normal
work duties.
Partial disability
 Person cannot perform all normal work
duties.
Temporary disability
 Person cannot perform all normal work
duties for a limited period of time.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 11
Disability Income Insurance
Clauses
 Policies can be guaranteed renewable or
noncancelable, with a waiver of premium
Exclusions
 Examples are preexisting conditions,
mental conditions, or other disabilities
AIDS/HIV
 Consent and notice form is needed for
testing
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 12
Disability Income
Insurance (cont’d.)
Group
 Some employers offer as an optional
benefit.
 Contracts are between the insurer and
the employer.
 Employer pays premiums, with or
without employee contributions.
 Policy terminates when employee leaves
the company.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 13
Federal Disability Programs
Social Security Disability Insurance
(SSDI)
Supplemental Security Income (SSI)
Civil Service Retirement System
(CSRS)
Federal Employees Retirement System
(FERS)
Armed Services Disability
Veterans Affairs (VA) Disability
Program
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 14
Federal Disability Programs
(cont’d.)
Social Security Disability
Insurance
 Long-term plan provides benefits to
workers and self-employed who meet
eligibility criteria.
 Insured also may be eligible for
Medicare after 24 months.
 Converts to retirement benefits at age
65.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 15
Federal Disability Programs
(cont’d.)
Supplemental Security Income
 Long-term disability program provides
benefits to adults and children
regardless of employment history.
 Many persons also qualify for Medicaid.
 Benefits are intended for those with
limited income and few other resources.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 16
Federal Disability Programs
(cont’d.)
Civil Service and Federal Employees
Retirement System Disability
 Benefits are payable for life to individuals
who qualify.
Armed Services Disability
 Benefits are payable for life if disability
occurs or is aggravated while person is on
active duty.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 17
Federal Disability Programs
(cont’d.)
Veterans Affairs Disability
 Service-connected disability is eligible
for outpatient treatment if filed within one
year of injury.
 Non-service-connected disability may be
eligible for same benefits if criteria are
met.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 18
Chapter 16
Lesson 16.2
State Disability Insurance
Non-industrial disability insurance
programs exist in only five states
and Puerto Rico.
To fund the programs, a percentage
of wages is deducted from
paychecks, or the employer pays
the plan costs.
Eligibility ceases upon retirement.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 20
State Disability
Information Summary
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 21
State Disability Insurance
(cont’d.)
Restrictions
 time limit for filing exceeded.
 condition covered under workers’
compensation insurance.
 unemployment benefits beyond a
specified amount.
 employer has a voluntary disability plan
and does not participate in state plan.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 22
Voluntary Disability
Insurance
Designed for persons who reside
and work in states without state
disability insurance programs.
Local private insurance carrier
arranges coverage.
If disabled, the person receives
fixed weekly or monthly income,
usually for six months.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 23
Claims Submission
Disability Income Claims
 Person must provide completed proof of
loss to establish disability.
 Attending physician usually must
complete portions of this form.
 Medical report may be attached to the
form for additional explanation of
disability and treatment.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 24
Claims Submission (cont’d.)
Federal Disability Claims
 SSA has teledictation service for
physician to dictate medical report
directly over the phone.
 Only data less than one year old is
allowed.
 Prognosis should be based on medical
findings.
 Claim should include functional
assessment of work-related activities.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 25
Claims Submission (cont’d.)
VA Disability Outpatient Clinic
Claims
 Processing of claims is usually long and
complicated.
 Consider billing VA monthly to avoid
payment delays.
 Follow instructions on patient’s ID card
closely.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 26
Claims Submission (cont’d.)
State Disability Claims
 Residents of states with disability
benefits must obtain claim forms from
nearest state filing office.
 Physician must substantiate disability for
claim to be processed.
 Additional forms/filings may be required
if disability is prolonged.
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 27
Form DE
2501
Claim
Statement
of
Employee
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 28
Form DE
2501
Claim
Statement
of
Employee
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 29
Form DE
2501
Doctor’s
Certificate
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 30
Notice
of Final
Payment/
Physician’s
Supplementary
Certificate
Form
DE2525XX
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 31
Form DE
2547
Request for
Additional
Medical
Information
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 32
Form
2547A
Medical
Inquiry
Form
Copyright © 2008, 2006, 2004 by Saunders an imprint of Elsevier Inc. All rights reserved.
Slide 33