Long-term disability insurance (LTD) is intended to replace a percentage of the policyholder’s regular income, calculated from the amount he or she is earning at the time when it becomes necessary to leave work due to the disability. Often the hope is that the individual will return to the workforce after a full recovery, or perhaps re-train for a career that better accommodates their disability. Chronic illness and LTD insurance can therefore make uneasy bedfellows. Getting long-term disability coverage for chronic illnesses that take a turn for the worse can present additional problems if the specific illness is flagged for exclusion as a pre-existing condition. The internet does offer a number of LTD coverage for chronic illnesses guides, many of which offer helpful tips. At the same time, the specific challenges that apply to long-term disability for ongoing conditions will depend on the circumstances of each individual’s situation. For this reason, you may find it helpful to talk with a disability rights advocate or an attorney practicing in disability law to discuss the complexities of your case.
What Is Considered a Pre-Existing Condition for Long-Term Disability?
Long-term disability insurance policies typically employ something they call a “look-back” period to identify potential pre-existing conditions. The look-back period for any given policy is a range of time calculated backward from the date the policyholder enrolled, i.e., from the start date of the policy.
There are a number of “periods” whose position relative to the others has significance for chronic illness and LTD insurance. Briefly, their organization is as follows:
- Look-back period: Applies to a time range before the policy start date, reviewed by the insurance company for evidence of pre-existing conditions that might invalidate a claim. Time ranges from 90 days to one year are common, but check your policy terms to be sure.
- Exclusionary period/exclusion period: Begins with the policy start date; limited period after policy enrollment during which the individual is not eligible to file a claim. Ranges from three months up to a year are common for exclusion periods as well, but will be identified in the policy documents.
- Elimination period: Starts with the insured person becomes disabled and constitutes a “waiting” period between the onset of disability and the eligibility to file a claim. Ranges vary but two of the most common are 90 days and 180 days. Some individuals will be eligible to use short-term disability insurance (STD) during the elimination period.
- Benefit period: Starts with approval of claim, shortly followed by disbursement of initial benefit payment. Benefit periods are highly variable from policy to policy, and some policies even specify different benefit periods for distinct disabling conditions.
While theoretically any condition an individual had prior to enrolling in a particular LTD policy could be considered a pre-existing condition, in practice the look-back period window defined in the terms of the policy frames the range of time the insurance company will examine in reviewing medical records for evidence with which to deny a claim for LTD benefits.
Chronic Illness and LTD Insurance: Treatment During the Look-Back Period
One factor that may influence long-term disability coverage for chronic illnesses is whether a particular illness was diagnosed or received treatment during the look-back period. Because chronic illnesses may develop at any point or be lifelong, it is quite common for an individual’s initial diagnosis to take place before the start date of the look-back period, especially if the individual is well along in his or her career. When this is indeed the case, whether the condition even appears in a look-back period review may depend on whether the condition required treatment during the timeframe in question.
Those timeframes are established in the terms of each policy, but there are a number of conditions that are often managed with little to no medical intervention for months to years at a time. Fibromyalgia and irritable bowel syndrome (IBS) are just two examples of chronic conditions that range widely in severity and for which medical treatments are so limited that at-home management is a common strategy for mild to moderate cases. Some mental health conditions follow a similar pattern. Long-term disability coverage for chronic illnesses that have been well-managed for an extended period can often be more realistic than for illnesses with a chronic prognosis that require constant medical management throughout the look-back period.
Long-Term Disability Coverage for Chronic Illnesses: Well-Managed Conditions
Always review the terms of your specific long-term disability policy carefully before giving up on your chances of filing a successful claim. While exclusions for pre-existing conditions are indeed common, the language used in the exclusion clause can sometimes make an enormous difference in whether your particular chronic illness meets the policy’s definition of a pre-existing condition. Precision is key, so discussing the details of your situation and the terms of your policy with a disability attorney may prove useful if you believe there is potential uncertainty in how the terms may be interpreted.
Do You Keep Health Insurance on Long-Term Disability?
Of course, many chronic illnesses do require significant, regular care and treatment by healthcare professionals. Individuals who leave work on long-term disability for ongoing conditions in this category understandably tend to have some concerns about how they will maintain health insurance while they are out of work. Even the prescription drugs required as maintenance medication for some conditions may be prohibitively expensive without health insurance to help defray the costs. If a chronic illness is severe enough to prevent a sufferer from holding a job, then it almost goes without saying that it is too severe to safely go untreated. LTD coverage for chronic illnesses guides that never address the question of health insurance are, in a sense, incomplete.
Job-Related Insurance and Chronic Illness Disability: What To Know
Employment is one of the most common ways Americans get access to healthcare. Since medical expenses are among the leading causes of bankruptcy nationwide, often placing a strain even in households covered by robust insurance policies, it is clear that the vast majority of working-age people in the United States are in no position to go uninsured if they can’t find any alternative. The stakes are, of course, especially high for individuals whose health conditions necessitate frequent medical assessments and treatments. Unfortunately for many people balancing chronic illness and LTD insurance protocols, the rules around changing health insurance on LTD can present a number of complications.
From COBRA to Your Next Step: LTD Coverage for Chronic Illnesses Guide to Health Insurance Options
In the short term, many people leaving their jobs to take disability benefits may be able to purchase a temporary extension of their coverage. The Consolidated Omnibus Budget Reconciliation Act (COBRA) implemented rules requiring most employee health insurance plans to offer individuals who would otherwise be losing their healthcare access the option to temporarily extend the coverage under the existing policies. This option will require you to purchase a continuation or “continuity” of coverage policy separately, and you will need to assume the full cost of the premiums that were previously paid by your employer. Usually there is also an added administrative fee of up to 2% of the total premium cost. This can make COBRA coverage quite expensive, so there are strong economic incentives for seeking an alternative as expeditiously as possible.
Keeping Healthcare Coverage While Managing Chronic Illness and LTD Insurance: ACA and Private Market Options
For the many individuals who do not qualify for public health insurance through Medicaid, some financial assistance with health insurance costs may still be available through the tax credits provided for under the Affordable Care Act (ACA). One point you may want to discuss with an accounting professional is the tax status of your LTD benefits. The ACA tax credits provided to help individuals cover the costs of their health insurance premiums each year are based partly on the amount the individual applying for tax credits is projected to pay in taxes for the same tax year in which the credits are applied, so changes to your taxable income can have a substantial impact on whether tax credits are available in your case, as well as the amounts for which you may qualify.
The final option is fully private health insurance, purchased directly through an insurance company. The active companies as well as the industry regulations vary by state, so here again it may be useful to talk with a professional who has experience in the area. If you are working with an attorney who is serving as your LTD coverage for chronic illnesses guide, you may want to ask him or her for suggestions regarding local resources specific to your state that might help you to make an informed decision.
Long-Term Disability Coverage for Chronic Illnesses: Thoughts To Consider
Long-term disability coverage for chronic illnesses can present a number of complex questions compared to the consequences of a sudden, disabling injury. LTD coverage for chronic illnesses guides need to pay particular attention to the frameworks under which insurance companies consider long-term disability for ongoing conditions. Often chronic illness and LTD insurance claims lead to prolonged review processes, as insurance adjusters look for evidence of pre-existing conditions that would enable them to deny the claims. The process can be especially stressful because it often overlaps with a period of transition in health insurance, which many people seeking long-term disability for ongoing conditions need to access regularly. Take a methodical approach to the process, reviewing the terms of your policy and exploring your options for healthcare, and never hesitate to reach out to a professional in the field when you have doubts or questions.
