If you have a chronic or progressive medical condition that is beginning to impact your ability to work, you might be wondering if you can file for benefits under your Short- or Long-Term Disability Insurance policy before you stop working. Even if your medical providers are recommending that you cease working or if you know that you can’t continue to perform your job duties for much longer, you might be concerned about a gap in income before your disability claim gets approved. In most cases you will need to stop work or at least substantially decrease your work before initiating a Short- or Long-Term Disability claim. However, you should take a close look at the full terms of your policy to know when you are eligible for benefits and what to watch out for if you continue to work part-time while receiving benefits.  

The Terms of Your Disability Policy Will Explain When You are Eligible for Benefits  

Your Short- or Long-Term Disability Insurance policy will have a detailed document that outlines the terms of your policy, including when you are eligible to receive benefits. If your disability policy is through your employer, you should ask your HR or benefits department to review the “plan documents” for your disability insurance coverage. If you purchased disability insurance privately, contact your insurance agent for more information on your coverage and the terms of your policy or policies. The plan documents will lay out the requirements to be eligible for disability benefits. For example, the policy may indicate that you need to be “unable to perform the material duties of your own occupation” and earning less than 80% of your pre-disability earnings. Under this hypothetical policy language, you could initiate a claim for benefits if you are under that 80% earnings threshold. However, as a practical matter it is often more difficult to show that you meet the definition of disability under your policy if you are continuing to work a substantial amount. For example, the insurance company may conclude that if can work 6 hours per day, there is no reason that you cannot work 8 hours per day. If you are going to continue working part-time while filing a disability claim, it will be essential for your doctor to be able to explain to the insurance company why you can tolerate part-time work, but not full-time work.  

If You Continue to Work Part-Time, Ensure You Know Any Earnings Limits in Your Policy  

Many policies will allow you to continue working part-time while being on an approved disability insurance claim. You should consult your plan to know how working part-time will impact the amount of your disability benefit. For example, most policies will not offset your disability benefit for a period of time while you’re working part-time (often known as a “return to work incentive”) but after a while will then offset your disability benefit by the wages you are earning (either dollar for dollar or based on a particular formula.)  

If you file a disability claim while still working part-time with your employer and you continue to work part-time after your claim is approved, you should also ensure that you are aware of how much you are earning and that you don’t exceed the threshold that will cause your benefits to end. For example, your policy may indicate that your eligibility for further benefits will cease if you earn 80% or more of your pre-disability earnings in a given month. It’s especially important to keep this issue in mind when it comes to bonuses, which the insurance company may count as income for the month when it is paid, causing you to exceed that earnings threshold.  

If you are also receiving or filing for Social Security Disability benefits (which is separate from Short- or Long-Term Disability benefits), you should also be aware of income limitations set by the Social Security Administration.  

An Attorney Can Review Your Policy and Help You Understand When You Can File Your Claim  

Reviewing the plan documents for your disability policy can be daunting if you aren’t used to reading insurance policies. If you find yourself wondering when you can initiate a disability claim and how to go about doing so, reaching out to an attorney who has read and analyzed hundreds or thousands of disability insurance policies is the best way to help get understanding of what your policy says. Our firm’s disability insurance attorneys are able to offer in-depth consultations to review your policy documents and discuss your options, as well as ongoing representation to help you file a claim or appeal a denied claim if needed.  

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