How long term disability works

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Many Ways to Gain Health Insurance. This article briefly describes several sources of health insurance that a person might look to when obtaining coverage. He is taken immediately to the hospital, where his initial injuries are assessed — broken arm, concussion, and whiplash. Over the next few days, it becomes apparent that he has lost the use of his entire right side due to his stroke, and is unable to continue working until he regains his mobility and speech.

He is set to begin physiotherapy in an attempt to restore his motor skills, but his doctors warn him and his family that the process could take several weeks, months or even years, and he will be unable to continue working during recovery.

After his crash, John is taken to the hospital immediately. Since his STD Insurance includes 1st-day hospital coverage1, his coverage period begins on day one. John recovers from his initial injuries in the hospital and remains for further testing over the next few days, which reveals the cause of the crash: a stroke. John completes the required forms to process an STD claim, including a statement from his attending physician, employer, and his own. Because of his 1st-day hospital coverage, John receives back pay for the period between day one and the time his claim is approved.

After 15 weeks, his recovery has been progressing well, but his STD coverage through his employer ends at 17 weeks. Note: John will not begin receiving reimbursement until he has filed a claim that is approved by the Insurer.

His LTD claim is approved and his coverage continues3 for the duration of his recovery. Slowly, John regains his speech and minor mobility, but even as his physical health increases, his mental health decreases, and he becomes more and more depressed as time goes on with limited mobility. After 12 more weeks, John has regained his speech and most of his mobility on his right side. He arranges to return to work on an accommodated work schedule5 after gaining approval from his employer and the Insurer starting with two days a week.

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Grow Your Legal Practice. Meet the Editors. The amount of your long-term disability benefits depends on the terms of your LTD policy, but it will be a percentage of your wages, minus other benefits. Pre-Disability Earnings Usually your pre-disability earnings consist solely of the monthly wages you were earning right before you became disabled, but some policies factor in other forms of compensation such as bonuses, commissions, and overtime.

Offsets for Other Income Variables that can lower your LTD amount include other benefits or earned income and whether your benefits are taxable. Earned Income Returning to work while on long-term disability could put your benefits in jeopardy or reduce the amount you receive each month.

Taxation of Long-Term Disability Benefits In general, if the premiums for your LTD policy were paid for with before-tax dollars as is almost always the case with an employer-provided group plan , your LTD benefits are taxed as ordinary income to you.

Maximizing Your Monthly LTD Payments There are two common mistakes people make when filing for LTD benefits that reduce their monthly payments unnecessarily or even void their coverage entirely.

Talk to a Lawyer Need a lawyer? Start here. Practice Area Please select Zip Code. How it Works Briefly tell us about your case Provide your contact information Choose attorneys to contact you. Related Products More. Nolo's Guide to Social Security Disability.