What Is Disability Insurance?
Disability insurance represents a form of insurance that provides financial relief for Americans that can no longer work because of a disability. A wide variety of organizations offer different types of disability insurance, including workers employed by the State of Ohio. However, private businesses are responsible for taking care of disability insurance for their employees in Ohio.
Each organization that offers disability insurance for workers implement specific rules that define eligibility and the extent of financial coverage. Like other forms of insurance, disability insurance is considered a safety net for residents living in the Buckeye State. Workers in Ohio receive coverage for both short term and long term care.
Three principles define disability insurance in Ohio:
Applicants must wait a certain amount of time before a policy can begin to provide coverage
Workers can enroll in policies offered by private entities, as well as participate in the Social Security Disability Insurance (SSDI) program run by the Social Security Administration (SSA)
Costlier policies typically offer more generous benefits that include providing special compassionate care for individuals that are extremely sick or have received a terminal diagnosis for a disease or an illness
Short-Term Disability
Short-term disability insurance covers workers that require temporary financial assistance to replace the income lost because of a non work-related illness or accident that prevents an employee from working full-time. Non work-related is the key term, because any accident that happens while you are on the clock is covered by the Ohio workers’ compensation program.
Short-term disability insurance in Ohio replaces income to help workers pay for monthly bills, as well as the cost of medical care. Your employer might offer a policy as a direct benefit, but most states do not require companies to offer short-term disability plans for their workers. In fact, only five states mandate employer insurance coverage for short term disabilities.
These five states are California, Hawaii, New Jersey, New York and Rhode Island. Many employers choose to offer short-term plans to take advantage of a federal tax deduction.
Employers can structure short-term policies in one of two ways:
Self-funded
Insurance company funded
Employers pay for self-funded plans, while an employer collaborates with an insurance company to fund an insurance company plan.
Long-Term Disability
Employers mitigate the cost of providing health insurance by participating in Multiple Employer Welfare Arrangements (MEWA). Several employers combine to use economies of scale to bargain for lower health insurance costs. The same thing cannot be said for either short-term or long-term disability insurance. Long-term disability insurance can be especially expensive to provide. (Speaking of expensive, save money with a level-funded health plan.)
If one of your employees suffers from a prolonged illness or an extended recovery from an injury, long-term disability insurance replaces lost income to pay for daily living expenses, as well as the cost of treating and rehabilitating an illness or an injury.
Many workers believe SSDI takes care of all the costs associated with a long-term illness or personal injury. The SSA denies a majority of SSDI claims the first time around, and in some cases, claims never get approved. A worker’s best opportunity to receive disability insurance in Ohio is through his or her employer.
Group long-term disability insurance include the following benefits:
Extended coverage - Pays for costs incurred at an extended care facility
Dependent care - Provides coverage for a dependent of a disabled worker
Dependent education - Covers a dependent’s education costs
Personal care assistance - Monthly benefit to pay a health care professional for helping a disabled worker complete two or more daily activities
Residual disability - Pays a portion of the costs associated with a partial disability
Full family integration - Combines SSDI benefits with employer sponsored long-term disability benefits
Vocational rehabilitation - Assists workers with the acquisition of new job skills
Workplace modification - Finances any workplace changes that need to accommodate a disabled worker
Why You Need It
As with other forms of insurance, disability in insurance in Ohio gives workers the peace of mind they need when it comes time to addressing the financial consequences of suffering from a debilitating illness or injury. There are a few other reasons that answer the question “Why you need it.”
Replaces Income for Seriously Hurt and Sick Employees
Some of the most common claims filed for disabling illnesses are for cancer, depression, and heart disease. The long-term out of pocket expenses for diagnosing and treating seriously ill patients run into the tens of thousands of dollars.
Disability insurance in Ohio also helps workers that suffered from a severe injury to take the time necessary to recover for a return to work. Auto accidents, slips and falls, and home improvement-related accidents lead the list for the causes of personal injuries outside the workplace.
Covers the cost of Medical Bills and Monthly Expenses
Most long-term disability insurance policies take care of around 60 percent of a worker’s lost income. Special cases like terminally ill patients and emergency care patients often receive more money to pay for rapidly rising health care costs. According to the SSA, nearly 25 percent of American workers will suffer from some form of disability before they reach the age of 67.
Takes Care of Family Members
Many disability insurance policies include clauses that activate whenever a covered worker dies because of an illness or a personal injury. The clause compensates dependents for the permanent loss of income, as well as takes care of the financial needs of the living spouse. Taking care of your family is perhaps the ultimate “peace of mind.”
Scenarios Best Suited for Disability Insurance
The insurance industry does not define which industries and occupational scenarios make a good fit for companies to offer disability insurance. However, prominent disability insurance companies customize different policies to match the insurance needs of specific occupations. For disability insurance in Ohio, that means workers in labor intensive jobs should request long-term coverage to account for the risks they face while on the job.
High Risk Occupations
Workers in high-risk occupations are more likely to have three components of a disability insurance policy that a professional in a white collar job does not get in his or her policy.
Guaranteed renewable
Social offset riders
Limited benefits
A non-cancelable policy means the insurance company cannot increase premium costs, as well as cancel the policy for any reason. On the other hand, a guaranteed renewable policy allows insurance companies to increase premiums to account for changing risk calculations for certain occupations. Although your disability insurance company can increase premiums, it must make the premium increases consistent across demographic and occupational categories.
Social offset riders factor in any type of social assistant benefits a disabled worker receives. Referred to as social insurance supplement riders (SIS), the disability insurance feature helps businesses reduce the cost of worker policies. Professionals that work in high risk industries such as construction often see a social offset rider tucked into their disability insurance policy.
Many policies covering workers in high risk jobs limit the length of the insurance coverage. More generous disability insurance in Ohio policies covers workers until they reach a specific age. High risk employees receive disability insurance coverage that lasts anywhere from two to five years. Five years of coverage is a valuable benefit for a professional working in a position that requires a considerable amount of physical labor.
What It Does Not Insure Against
As a common element of health insurance coverage, a pre-existing medical condition cannot prevent a policyholder from receiving health care. The same cannot be said for disability insurance. Insurers write what is called an exclusion into a policy, which does not allow policyholders with pre-existing medical conditions to receive benefits for the conditions.
What Defines a Pre-Existing Medical Condition?
Until the passage of the Affordable Care Act (ACA), health insurance companies denied policy applications that included information about a pre-existing medical condition. Disability insurance companies continue to exclude American workers that have one or more underlying health care issues when they sign up for coverage. Some companies outright deny applications, while other companies charge incredibly high premiums to account for the risk of insuring applicants that have pre-existing medical conditions.
Insurers that offer disability policies typically assess pre-existing medical conditions by the treatments received by an applicant. Conditions like sleep apnea and chronic asthma usually are defined as conditions not covered under disability insurance policies. Companies that offer disability insurance conduct thorough reviews of medical records to determine whether a pre-existing medical condition should not be covered by a policy.
Disability Insurance Ohio - Conclusion
When you perform research into disability insurance in Ohio coverage, you can expect to discover two primary types of policies.
A disability insurance policy for individuals is provided by an independent insurance agent or an insurance company. It is up to you to negotiate the terms of the policy, which includes agreeing on issues such as policy term length and coverage for pre-existing medical conditions. The amount you pay for premiums does not change, unless you choose to change the coverage listed in the policy.
Group disability insurance policies are offered by employers and trade associations. The organization providing disability insurance coverage pays for a percentage of the monthly premiums. Group disability insurance policies come with two disadvantages.
Employees lose coverage when they no longer work for an employer
Companies do not have to approve renewal of policies
Because of the possibility of losing group disability insurance coverage, you should consider taking out an individual policy. Even if your employer covers you with disability insurance, an individual policy ensures you receive financial benefits in case you suffer from a short-term or long-term disability.
A state licensed attorney who specializes in worker disability law can help you fight back against your employer if the company denies a claim for benefits. A benefits consultant will also be knowledgeable in these matters.
P.S. Looking for dental insurance in Ohio?
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