What is a residual or partial disability rider? This question was posed to Mark Webb, Executive Vice President, Governmental Relations, of Employers Direct Insurance Company. Webb begins by saying, "Not...
This question was posed to Mark Webb, Executive Vice President, Governmental Relations, of Employers Direct Insurance Company. Webb begins by saying, "Not every accident, whether occurring on or off the job, results in total disability. In many cases, you will be able to return to light duty or to a modified work program prior to your medical condition reaching its maximum improvement. The reality, however, is that light duty or modified work responsibilities may not compensate you fully based upon your pre-injury wage. Under such circumstances, you may wish to consider a residual or partial disability rider to your disability insurance coverage."
"When an injury or illness occurs at work and arises out of and in the course of employment," Webb explains, "then your disability payments are made through your state's workers' compensation system. In cases where you are still recovering from the injury or illness but are still capable of working, you may be obtaining temporary partial disability benefits. Temporary partial disability payments augment your wages that you are receiving from the light duty or modified work you are performing so that your pre-injury wages are replaced to the greatest extent that is allowable under the law. This applies to those states that operate state disability programs as well if the injury or illness does not occur at work. Social Security, however, does not offer benefits for those who are partially disabled."
"If you have private or employer sponsored group disability insurance," Webb continues, "it's possible that you may have a residual or partial disability rider that provides benefits similar to that of state workers' compensation or disability programs. As is always the case with private insurance," Webb advises, "you should 'read the fine print' before deciding whether or not to add this to your coverage. There may be limitations based upon the amount of lost wages, the duration of the disability, and whether or not your light duty or modified work is full time or part time. For example, a policy of long term disability insurance may encourage an early return to work by providing residual benefits for the first twelve months so that between your light duty or modified work and the insurance proceeds you will receive 100% of your pre-injury wages."
"In addition," Webb adds, "residual disability riders may be either for loss of income or 'loss of time and duties'. The former is important for approximating your pre-injury loss of income while you are recovering and are engaged in limited work duties. The latter compensates you while you are not working full time. If you are in a sales position, for example, the loss of time and duties of a residual or partial disability rider could cause you and your family a substantial hardship given the time that it may take to reestablish yourself in your profession even after returning to your work full time."
"Not all policies include residual or partial disability benefits," Webb points out. "If, for instance, you work for a medium to large employer who is subject to the requirements of the Americans with Disabilities Act, that employer is obligated to make a reasonable accommodation for your disabilities at the workplace. In addition, the objective of all disability systems is to return workers to the workforce. Residual or partial disability benefits are one way to meet that goal."
