As of 2020, a handful of states have passed laws that make it mandatory for employers to provide short-term disability insurance. However, Kentucky is one of the vast majority of states that does not require employers to offer a short-term disability insurance program to employees.
While employers in Kentucky have the option to offer disability insurance, many choose not to do so. Employers who don't offer disability insurance are missing out on a great way to enhance their employee benefit package and help protect employees from potential financial burdens. Providing disability insurance to employees is an affordable benefit, similar to how level funded health plans can be the most affordable group health insurance option for employees. If your employer does not offer disability insurance, then it could be worth it for you to ask them about setting one up for employees. Otherwise, it may be beneficial for you to purchase an individual disability policy yourself.
There are two types of disability insurance policies that employers can offer employees:
Short-Term Disability Insurance
Long-Term Disability Insurance
What Is Short-Term Disability Insurance?
Short-Term Disability Insurance is an employee benefit that pays employees a fixed weekly benefit for a non-work related, covered illness or injury. For example, a typical Short-Term Disability policies pays employees about 60% of their weekly income up to a $2,000 weekly maximum benefit. If you are enrolled in a Short Term Disability policy and suffer an injury or come down with an illness because of a non-employment-related incident or series of events, you might qualify for a claim. The illness or injury has to keep you away from your job for a period of time as defined by your policy (typically 7 days).
The key term here is “Non-employment-related,” as Kentucky runs a workers’ compensation program that takes care of the financial issues resulting from an on the job accident or illness that leads to missed time from work.
Example of a Short-Term Disability Claim
For example, if you fall off a ladder at home and break your right arm, Kentucky short term disability insurance can cover some of the cost associated with missing work. On the other hand, falling off a ladder and breaking your right arm at work can qualify you to receive Kentucky workers’ compensation benefits.
Short term disability insurance comes in two forms:
1. Short-Term Disability through an Insurance Company
Employers that need a little financial assistance to bring a short term disability plan together can work with brokers and insurance companies to offer this benefit to employees.
What happens if you discover your employer does not offer short term disability insurance? You can buy an individual disability policy in the private marketplace. That's where Wilson Insurance comes into play to help you. You can expect to pay between one and three percent of your gross annual income for an individual disability policy. If you earn $60,000 per year, this means the annual cost for a short term disability insurance policy runs from $600 to $1,800 each year.
2. Self-funded Short-Term Disability Insurance
Employers can choose to "self-fund" short-term disability insurance and assume the risks and expenses themselves.
Why Is This Important to Have?
When you consider the financial implications of treating and rehabilitating a non-job-related illness or injury, the value of a safety net called short term disability Kentucky makes fiscal sense. Many workers in the Bluegrass State barely have enough money to pay for monthly living expenses like their mortgage and car payments.
Short term disability insurance can turn a potential financial train wreck that can lead to bankruptcy into a relatively easy to manage financial problem.
What Is Long Term Disability Insurance?
Long Term Disability Insurance is a type of insurance product that pays employees a fixed monthly benefit for a non-work related covered illness or injury. For example, a typical Long Term Disability policies pays employees about 60% of their monthly income up to a $10,000 monthly maximum benefit. If you are enrolled in a Long Term Disability policy and suffer an injury or come down with an illness because of a non-employment-related incident or series of events, you might qualify for a claim. The illness or injury has to keep you away from your job for a period of time as defined by your policy (typically 90 days).
As a reminder, Kentucky workers’ compensation program should take care of the financial issues resulting from an on the job accident or illness that leads to missed time from work.
Example of a Long-Term Disability Claim
If you suffer a stroke or heart attack, a long term disability insurance plan can cover some of the cost associated with missing work. If something unfortunate like this happens to you, it could be critical that you are enrolled in a long term disability policy to help with your financial burden.
Long Term disability insurance comes in two forms:
1. Long Term Disability through an Insurance Company
Employers can work with brokers and insurance companies to offer this benefit to employees.
What happens if you discover your employer does not offer long term disability insurance? You can buy an individual disability policy in the private marketplace. That's where Wilson Insurance comes into play to help you. You can expect to pay between one and three percent of your gross annual income for an individual disability policy. If you earn $60,000 per year, this means the annual cost for a long term disability insurance policy runs from $600 to $1,800 each year.
2. Self-funded Long Term Disability Insurance
Employers can choose to "self-fund" long term disability insurance and assume the risks and expenses themselves.
If you live in Kentucky, here are some other reasons you might want to obtain an individual disability insurance policy:
Your Employer Does Not Offer It
Five states require employers to fund short term liability insurance policies for their workers.
Kentucky workers have to determine whether the companies and the organizations they work for offer short term and/or long term disability insurance policies. If your employer does not offer coverage, you should try to purchase an affordable policy on your own.
Self-employed professionals do not have the luxury of having an employer provide the benefits that company-employed workers enjoy. In addition to having to fund their own retirement plans and health insurance policies, self-employed professionals also have to purchase individual disability insurance policies.
The Need for Gap Coverage
Workers that receive long term disability insurance benefits take advantage of a wonderful financial life line. However, most long term plans take 90 days before benefits kick in, which means you have to find a way to have income available during the gap period. A short term policy represents an excellent way to fill in the insurance gap.
If you decide to gamble on financing the costs associated with a short term illness or personal injury yourself, you better make sure you have thousands of dollars in savings to pay for the cost of medical care and daily living expenses. Ninety days does not seem like a long time, but the time that goes by includes three car payments, three mortgage payments, and 13 weekly grocery bills.
Short Term Disability insurance helps reduce the risk of tapping into your savings account or taking a loan from a retirement plan.
Your Family Needs Financial Support
A disability that lasts a few months can significantly damage the financial standing of your family. Covering your family prevents the loss of income and rapidly rising medical bills from placing your family on the brink of filing for bankruptcy. Obtaining a disability insurance policy gives you and everyone in your family peace of mind.
What Professions Benefit Most?
Workers in Kentucky who enroll in a Short Term Disability insurance plan can collect a financial benefit if they incur an injury or contract an illness outside of work. So, why does it matter to define the professions that benefit from the safety net?
The answer is that although short term disability insurance does not cover work-related illnesses and injuries, the fact is some professionals work jobs cause stress and fatigue on the body.
Stress and fatigue combine to lower the body’s immune systems, as well as lead to poor decision making outside of work.
Here are some professions, for example, where stress and fatigue contribute to outside of work illnesses and accidents:
Of course, there are thousands of other jobs not listed where short term disability insurance can add a bigger safety net around someone and their family.
How Do I Sign Up for Disability Insurance in Kentucky?
This is where it's helpful to have an insurance broker like Wilson Insurance assist you along the way. We'll be able to obtain multiple quotes from a number of carriers and help answer your questions along the way. After you have a plan in place, be sure to reach out to us if you believe you have a claim. We will help you start the claim process as soon as possible if you have a covered disability because of a non-work related illness or an injury.
Be sure to click this link if you're looking for Ohio disability insurance.
Other Details to Consider
Disability Determination Services (DDS) operating out of the Department for Income Support
represents the Kentucky agency that determines eligibility for disability insurance benefits. Using federal guidelines, the Kentucky DDS thoroughly reviews claims to determine whether a worker qualifies for disability insurance that is funded by three programs managed by the Social Security Administration (SSA).
Social Security Disability Insurance
Social Security Disability Insurance (SSDI) provides financial support for disabled American workers to cover the costs associated with living expenses, as well as mounting medical bills. The SSA refers to its Blue Book to determine whether an applicant meets the symptom guidelines established by the federal agency.
Supplemental Security Income
Supplemental Security Income (SSI) delivers financial assistance to adults and children that suffer from a qualifying disability and have met the non-monetary standards set by the SSA.
Medicaid does not cover the costs of living expenses, such as mortgage payments and money to buy essentials. The program covers the costs of healthcare for Americans that meet the financial requirements written into the safety net law.
Here is how the application process unfolds for all three federal financial assistance programs:
DDS acquired medical evidence filed by your physician, as well at the clinics and hospital where you spent time receiving treatment.
You might need to file employment information
DDS has the legal power to require you to undergo a no expense medical examination to confirm the medical evidence you submitted
Medical experts and disability litigators carefully review the evidence to determine your eligibility as defined by the rules set by the SSA
Lack of medical evidence leads to a denial of your claim, which you can appeal by working with a Kentucky licensed Social Security attorney
If you suffer from a serious injury or contracted a debilitating illness outside the workplace, you understand how rapidly mounting medical bills can trigger financial distress. Throw into the mix the inability to care of basic living expenses, and you have a financial avalanche that is about to cover your family in red ink. Fortunately, you can speak to a licensed insurance agent at Wilson Insurance Group to help you get covered with a disability plan to protect your finances.
Fill out our contact form or give us a call at (513) 984-5991.
P.S. Wilson Insurance Group can also help you with Medicare benefits.