Alongside the love and support of your family and friends, your health and your ability to work are among your most important personal assets. When unexpected injuries, illnesses, or chronic health conditions interfere with how you make your living, it can dramatically reduce your overall quality of life while impacting your family for years to come. Disability benefits provided through your employer provide an important safety net in these situations, but how can you be sure you have enough coverage? The first step is determining exactly what you are entitled to through your employer-sponsored plan.
Employers are not required to provide benefits to employees who suffer from disabilities that prevent them from working, but companies of all sizes often elect to include it as part of their employee compensation package. Generally, these are benefits that are provided at no cost to you. According to the Insurance Information Institute (III), most offer some type of short term sick leave which can help offset lost wages for a period of time ranging from a few days to several months. Roughly half provide benefits that will cover you if you develop a long term disability.
You should be made aware of the terms surrounding these benefits when you are hired for a job. While it is common to give these documents only a cursory glance, it is important to review the details of your policy before the need to submit a claim actually arises. Under the Employment Retirement Security Act (ERISA), employers are required to provide clear disclosures about the type of insurance they provide, the terms of coverage, and the date it goes into effect.
While most people think it will not happen to them, the Social Security Administration (SSA) reports that one out of every four 20-year-olds will become disabled before they reach retirement age. The III reports that a typical employer-provided long term disability policy will likely cover between 40 and 60% of your lost pay and may be supplemented by any Social Security disability benefits to which you may be entitled. To determine whether you need additional coverage, consider these questions:
Remember, employers are required to provide this information. Failing to do so could put them in violation of ERISA regulations.