Disability insurance and public benefits

People in Colorado are lucky in that they can access public disability benefits if they’re injured on the job or can’t work any longer. Some of them even have private disability insurance. This may be provided as a benefit by an employer. Some people pay for it themselves. When someone has private coverage, however, it might be affected by access to public benefits.

The basics of disability coverage

Usually, disability insurance pays people about 60% to 80% of their usual salary if they’re no longer able to work. Long-term disability insurance is designed to replace income for people who are out of work for a year or more in most cases. These claims may be investigated by insurance providers.

Understanding offsets

Long-term disability insurance claims are often affected by offsets outlined in the policies. Offsets take any income from public programs into account and change the amount of a payout based on that information. For example, say your long-term disability insurance provides 75% of your former salary but there’s language about offsets in the policy. If you receive $500 in other benefits, the private insurer will reduce your payout by that much.

In effect, your policy is seeking to replace your income. If part of that income is being replaced by another source, they won’t duplicate it. In their minds, that goes beyond the agreement they entered into with you in the policy.

Anyone who has been disabled and can no longer work should contact a lawyer. It may be possible to get help with denied or reduced claims.