The Edge Series: What Does "Elimination Period" Mean?
The lawyers in our firm are focused on helping people with disability policies and ERISA claims. We want to give you the edge in understanding your policy. Today, we want to help you understand what the term "elimination period" means in your disability policy.
The elimination period is the number of days that must pass or be eliminated before the benefit will start paying.
For example, if there is an elimination period of 180days, you must be disabled that long before your disability benefit will start paying. In fact, you must be disabled each day during that entire timeframe. Any days you return to work on a full-time basis, performing the major duties of your occupation, will not count toward the elimination period. That is different from the waiting period we previously discussed.
The elimination period is typically listed in the Schedule of Benefits. It can be 30, 90, or 180 days, or whatever is listed. The purpose of the elimination period is to make you self-insure your disability or at least have a different policy, such as a short-term disability policy to cover your lack of wages during the elimination period. Thus, you have a stake in the matter.
Far fewer people are going to claim disability if they have to self-insure for 90 or 180 days before the long-term disability benefits policy pays. What is best for you is a shorter elimination period, but typically the shorter the elimination period, the higher the premium for the policy. Some policies have a provision that lets you make a return to work attempt. If you go back to work for a short while and fail, the elimination period timer does not start at the beginning again. You just pick up where you left off.
The danger arises when your return to work attempt lasts too long.
For example, a policy may permit you to make a return to work attempt, but if that effort continues past a time frame of six months, then the elimination clock is reset to 0. Let's say that someone is disabed for 150 days and only has 30 days to go to start receiving disability benefits. If she makes a return to work attempt for six months and one day, many policies provide that the elimination period starts all over again. On the other hand, if your return to work attempt fails after five months, the clock would not start over, and after the remaining 30 days, benefits would be paid.