The Wisconsin Department of Employee Trust Funds (ETF) administers retirement and disability benefits Indoor portrait of happy loving mature couplefor Wisconsin state and local government employees, including teachers, university employees, and city workers, among many others. Such employees unable to continue working until normal retirement age due to a physical or mental disability may be eligible for benefits through the State’s Disability Retirement Benefit (§ 40.63) or Long Term Disability Insurance (LTDI) programs. This blog post addresses some of the differences between disability benefits obtained through the Wisconsin Retirement System and private disability insurance benefits.[1]

1. Required Documentation is Critically Important

One of the primary ways ETF disability benefits differ from private disability insurance is benefit eligibility is driven by proper completion of forms. Private disability insurers have broad discretion to review your medical documentation and make an independent assessment about whether they believe you meet the Plan’s definition of disability. Not so with ETF. Rather, the Department (or Aetna, ETF’s third party administrator) will require submission of certain forms and medical evidence. If the documentation received is consistent with the statutory requirements, ETF will approve your application. On the other hand, if you do not submit the necessary forms, then no matter how much medical documentation you provide in support of your disability, your claim will be denied.

2. Your Employer and Two Doctors Must Certify Your Disability

The information submitted to ETF must include medical reports from two licensed physicians certifying you are totally and permanently disabled. Your former employer also must certify you are not expected to return to work, and it is not contesting your eligibility for disability benefits. Again, if documentation is missing or if is completed in a way that does not align with the statutory requirements, ETF automatically will deny your claim.

3. You Must Be Totally Disabled From ANY Occupation

Unlike many private insurance policies, which initially allow you to collect disability benefits if you are unable to work in your own job, in order to qualify for Disability Retirement or LTDI benefits, you must be totally disabled. That means you must be “unable to engage in any substantial gainful activity,” not simply unable to perform the duties of your job. “Substantial gainful activity” is defined by an earnings limit, which for 2016 is set at $14,499. In other words, in order to be eligible for disability benefits with the Wisconsin Retirement System, you must be unable to work in any job in which you would earn more than $14,499 per year.

4. There is No Mental Health Limitation

Most private LTDI policies have a mental health limitation, restricting the length of time an individual may receive LTDI benefits for a disability caused by mental illness to two years. Unlike private disability policies, ETF Disability Retirement and LTDI benefits are not limited on account of the nature of your medical condition. You must simply be disabled “by reason of a medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.” Thus, if you cannot engage in substantial gainful activity due to mental illness, you can continue to collect benefits.

5. There Are No Offsets for Social Security Disability Insurance Benefits

Most private LTDI policies reduce your LTDI benefit by the amount you receive in Social Security Disability Insurance (SSDI). That is not the case with Disability Retirement (40.63) or LTDI benefits with ETF. If the Social Security Administration approves your SSDI claim, your disability benefits with the State will remain the same.

6. If Your SSDI Claim is Approved, ETF May Not Require Continued Medical Certification of Disability

One of the advantages of an SSDI approval for disability retirement (40.63) / LTDI purposes is ETF may waive the annual requirement that your doctors recertify your disability. If you are not working and you are receiving SSDI, ETF may simply assume you are disabled without further documentation. In contrast, private disability insurers generally do not defer to decisions made by the Social Security Administration. Instead, insurance companies conduct their own thorough review of your medical documentation and scrutinize it independently of any other entity’s decision.

The above list identifies just some of the ways in which ETF disability retirement (40.63) and LTDI benefits are unique. The list is not exhaustive. If you are a public employee and have questions about your disability or retirement benefits with the Wisconsin Department of Employee Trust Funds, please contact Hawks Quindel to arrange a consultation with an employee benefits attorney.

[1] Please note that if you work in a protective occupation and your disability is work-related, you may be eligible for Duty Disability Benefits (§ 40.65). This post does not address the details of that program, which vary from the information contained herein.

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