Workers Comp & Long-Term Disability: Entitled to Both?
One question that we often hear is whether someone who has been hurt on-the-job is entitled to long-term disability benefits in addition to workers' compensation benefits. Workers' compensation benefits only cover injuries occurring in the workplace, and many times, people think that because they were hurt at work they cannot obtain long-term disability benefits. That may or may not be true, and in most instances, it is not true.
Check the long-term disability (LTD) plan document, policy, or certificate to see whether there is a workers comp exclusion. Some long-term disability policies can have a workers compensation exclusion. In that case, you may not be entitled to long-term disability benefits. However, most of the policies that we've seen, and we've been doing this since 1992, do not have an exclusion for workers' compensation benefits. As a result, many people miss out on an opportunity to obtain long-term disability benefits.
Think of long-term disability as the financial life preserver that keeps you afloat until your workers' comp case is resolved.
Your workers compensation claim may be disputed, and even though you’re hurt and your employer wants you to obtain the benefit, an insurance company will be driving the matter. And they may not want to pay. If you end up in state court regarding that dispute, it can take years until that workers compensation claim comes through.
What do you do in the meantime?
Long-term disability will generally have much shorter time requirements associated with it, and as a result, you can obtain that benefit more quickly.
And it may be your lifeline until you find out whether workers' compensation will pay.
Once workers' compensation does pay, will there be an offset?
Most of the policies that we have seen do include an offset for workers' compensation benefits. And in many states' workers' compensation statutes, there is also an offset for workers for the long-term disability benefits, so there's competing offsets. The long-term disability benefit wants to reduce the amount it pays by the amount of workers' comp and vice versa. They are constantly reducing the amount of the other benefit, and what happens is there is a pro rata adjustment where each benefit actually pays a certain amount.
However, that is all down the road.
What is most important is that you have a benefit in place when you are hurt, so you can obtain some sort of relief.
We see the same thing happen with Social Security disability claims. People think if they apply for Social Security benefits, they don't need long-term disability. When actually, you might need long-term disability to serve as a valuable resource to help you through difficult times. It can sometimes take the Social Security Administration 1-3 years before the SSD benefit is actually awarded to you.