Perspectives on Disability Insurance
By Diane Winiarski, MEd
Mavis Bryant, is a woman living with heart disease, kidney disease, and type 2 diabetes. In March 2018, Bryant’s medical conditions started to interfere with her ability to work. Eventually, her health began to deteriorate so much, she had to spend several months in the hospital.
This extended hospital stay meant Bryant could no longer work, and that’s when the worry started to set in. Like most people, Bryant wasn’t born with an automatic understanding of the ins and outs of disability insurance, nor what she should do if she were to find herself suddenly unable to work.
“I kept going in and out of the hospital for two weeks at a time. Things were so bleak that I didn’t think I would ever work again. It was a rough road,” Bryant says.
Rough Road to Financial Stability
Unfortunately, many people have already or will someday face this reality. The Social Security Administration finds that 1 in 4 20-something Americans will experience a disability by the time they reach retirement age.
Even more unfortunate is the fact that the majority of individuals who experience a disability are unprepared. According to the Council for Disability Awareness, 51 million Americans lack private disability insurance, leaving them in a vulnerable and risky situation with the potential to be without an income or health insurance.
Bryant was one of the lucky few. Her employer, the Children’s Home Society, a nationwide organization, was one of the approximately 34% of private industry employers that offer long-term disability (LTD) insurance.
Employees may find themselves automatically enrolled in employer-sponsored LTD, and the policy usually kicks in after the employer’s short-term disability policy runs out. Sometimes LTD is a voluntary benefit and employees are required to pay out of pocket for coverage, with nothing provided by their employer. A private LTD plan often is the best option for individuals with high-paying salaries because payments are calculated at a fixed percentage of your most recent salary (usually around 60%). Bryant was able to take advantage of her employer’s LTD plan, but not all are so lucky.
Many workers, including those who are self-employed, often forego private disability insurance because of the costs, deciding to assume the risk that they won’t experience a disability during their working careers. It’s important to note, however, that the average age of former workers receiving Social Security Disability Insurance (SSDI) benefits is 54, and they have an average 22 years of work experience.
Leaving Work With Hopes of Returning
Bryant’s health continued to decline as the year went on, forcing her to ultimately realize that she would not be able to return to work as soon as she had hoped. It was an important realization, that this was becoming a long-term situation and she wouldn’t be able to return to work for some time to come.
Without her full income, Bryant avoided bankruptcy by receiving help from her generous family members, but she knew this was only a short-term solution. In addition, her LTD policy included the provision to also apply for SSDI benefits. So, she began filing for SSDI through the Social Security Administration (SSA), but was quickly overwhelmed by how complicated the SSA’s process was. As a case manager, she was familiar with thoroughly reading paperwork, but she was not prepared for the volume of documents and requirements that come with filing for disability assistance programs and found a national SSA-authorized Employment Network.
Unlike LTD, SSDI is a federally funded program. In order to qualify, individuals must have worked at least five of the last 10 years, paid Federal Insurance Contribution Act taxes, be under their full retirement age (65–67 years old), and have a disability that prevents them from working for at least one year.
Two-thirds of individuals who apply for SSDI on their own are denied, but the 8.5 million people currently on SSDI would tell you that applying is still worthwhile. The average SSDI monthly payment in 2020 is $1,258, but benefits can range to over $2,000 depending on your recent salary. (After receiving benefits, SSDI eligibility is reviewed incrementally during Continuing Disability Reviews.)
The Path to Return to Work
Bryant was unable to work for just under one year, during which time she focused on improving her health. Then, once her health issues stabilized, she used the SSA’s free Ticket to Work (TTW) program and the employment network to find open positions in the social services sector.
The TTW program is available to anyone who qualifies for Social Security disability and it protects SSDI participants’ benefits while they search for and try out new or related careers once they are medically able to do so. In turn, the TTW program works to combat the high disability unemployment rate, which is double (7%) the national average (3.2%).
Using the TTW program, in only a matter of months Bryant was able to return to her previous position as case manager at the Children’s Home Society. “It was a hard road, but I always wanted to come back. I had parents calling me and checking up on me, asking me how I was doing, when I was coming back, and that they needed my help,” Bryant says.
Today, she’s helping those families once again, though in a part-time capacity until she fully recovers. Her goal for the new year, though, is to increase work hours, ease into full-time work, and get back to dedicating more of her time to helping families in need.
— Diane Winiarski, MEd, is director of vocational rehabilitation services for Allsup Employment Services, a national Social Security Administration–authorized Employment Network. She oversees experts providing specialized help to people with disabilities who are returning to work through the Social Security Administration’s Ticket to Work program.