Disability insurance is that which can supplement part of your income if illness or injury hinders you from working for an extended period of time. Employer disability insurance requirements ensure that you receive the right amount of money for your disability, and protect you in other ways, such as not getting fired because of your disability. Below are some of the most important requirements, and some of those that are not requirements.
Required
- If a company offers disability insurance to its employees, the company cannot restrict the benefits from any employee, regardless of the medical condition the employee may have or acquire. This protection is guaranteed by the Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA).
- Government laws provide that a company’s insurance plan or policy may operate to expand or increase coverage and/or benefits available, but the plan may not decrease or limit benefits or coverage available below that which is provided in the insurance policy and plan agreement.
- In order to be eligible for your company’s disability insurance benefits, you usually need to work a certain number of hours per week and fulfill other active work requirements.
- Short Term Disability (STD) is typically defined as the inability to perform your usual work as a result of illness or injury, and usually does not take much scrutiny to be approved.
- Long Term Disability (LTD) is more narrowly identified as the inability to do any work for which one is suited by training or experience. Thus, in order to be approved for LTD, insurance companies need more evidence and analysis of the illness or injury because the expense is much greater than that of STD.
- STD coverage costs are paid for by your company, though if the costs exceed the premium, you may be responsible for additional costs.
Not Required
- Companies have the option of offering disability insurance as a benefit for their employees; it is not obligatory. You can, however, develop your own personal disability insurance to protect yourself.
- Every disability insurance plan is different, so you should review your company’s plan or policy to determine what your benefits and coverage are. Be sure to compare the language of both your company handbook (which does not completely outline your insurance policy) and the actual company insurance plan or policy so you are completely aware of what is available to you.
- Companies are not required to insure you if you do not meet all conditions stated by the company, though these conditions are limited by insurance laws as well.
Employer disability insurance requirements are meant to protect you financially in times of illness and injury. You should carefully review your company’s coverage policy to fully understand your benefits, as well as any other employer disability insurance requirements, such as how long short term disability coverage lasts, how long you must work in order to be eligible for disability insurance, and any other conditions you need to fulfill on your part as the employee.
By Monica Drusch