Question

Explain the concept of disability in the worker’s compensation system, short or long term disability insurance, and social security disability. What are the similarities among the three and what are the important differences among them. Illustrate your answers with examples

Answer 1

Workers’ compensation delivers benefits such as recovery of lost wages, medical treatment, and compensation for permanent disability. Numerous states workers’ compensation programs also provide other welfares to injured workers, with vocational retraining and return-to-work programs. Dependents of workers who are killed on the work or die due to an occupational disease generally receive monetary benefits, conditional on the state laws involved.

In exchange for the guarantee of insurance coverage and benefits for workers who have a legal workers’ compensation claim, workers cannot charge the employer in court for negligence. An injured worker can file a lawsuit against the employer only if the employer purposely caused the worker's injuries. As a result, punitive damages, pain and suffering damages, and other tort damages are not obtainable through a workers’ compensation claim.

• Short-Term Disability Insurance Short-term policies pay benefits for short periods of time—typically 3 months, 6 months, or 1 year, after a brief waiting (elimination) period. Short-term disability insurance can be very affluent to purchase as an individual, but group plans are typically less exclusive than long-term group plans. Many companies offer a short-term group plan as a company-paid benefit to all workers.
• Long-Term Disability Insurance. Long-term disability insurance has an abolition period of at least 90 days. After that, benefits are compensated for a longer term, typically, 2 years, 5 years, 10 years, to 65 age, or for life, based on the policy. The lengthier the benefit period, the higher the premium.
• Social Security disability benefits are compensated to you and certain members of your family if you are “insured,” meaning that you worked long sufficient and paid Social Security taxes. Managed by the SSA, SSDI makes monthly payments to eligible disabled individuals and is an important benefit for individuals with early-onset (younger-onset) Alzheimer's disease.

WHAT IS THE DIFFERENCE BETWEEN SHORT-TERM AND LONG-TERM DISABILITY?

1.Short-term disability (STD)

STD insurance is insurance that pays you a part of your income for a short period of time after you run out of sick leave (STD typically lasts less than 1 year). Based on your plan, STD will naturally pay you after a waiting period (also referred to as the elimination period in contracts). This period of time is typically 1-7 calendar days from the date of illness or injury. STD benefits are paid weekly and the duration is naturally between 13-26 weeks. STD coverage doesn’t naturally cover work-related injuries.

Some common life events that are typically covered by STD:

• A disabling injury
• Prolonged sickness
• The birth of a child

2.Long-term disability (LTD)

LTD insurance is insurance that starts once your STD benefits and employer-granted sick leave has been used up. There is typically a 90 or 180 day waiting period, which can be covered by STD if you have a policy in place. The period of the benefit varies, but it typically provides coverage until the employee returns to work, is no lengthier disabled, or reaches the Social Security retirement age.

Some common life events that are typically covered by LTD:

• Musculoskeletal/connective tissue disorders (back pain, osteoarthritis)
• Cancer
• Accidental Injuries
• Cardiovascular/circulatory disorders (heart attack, coronary artery disease)
• Mental disorder

3.Social Security Disability Insurance

SSDI covers more than 150 million workers, with any number of them gathering insurance at any given time. To receive SSDI you must show that:

• You can no longer work in your earlier occupation
• You cannot adjust to new work
• Your disability will prevent you from returning to work for at least a year

SSDI requires what is known as “total disability.” This means that if your disability is partial (meaning you can still do some work) or temporary (less than a year), then you cannot take SSDI benefits.

In adding, the elimination period— the amount of time the claimant must wait for payable disability benefits for SSDI benefits is at least 5 months.