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Steps I should take BEFORE disability
Apr 7, 1997

I was recently diagnosed HIV+ and have not told my employer for fear of the consequences. I don't plan on going on disablitiy but reality being as it is I want to have all my business in order if & when I do. Who pays my monthly medical premiums while I'm on disability? me or my employer (I work in NY state). I have LTD coverage also - is there any way my employer can get me off there medical plan or LTD while I'm disabled? My employer had an employee on LTD once and from what I gather they were able to get her off their medical plan by changing the medical insurance company. And my LTD plan says something about reducing my monthly benfits (60% of prior months earnings)by what I receive from Soc Sec and other sources, so soes that me the most I can benefit is 60% of what my salary was? Thank you for providing this resource - it's been very difficult trying to get information without raising some eyebrows

Response from Ms. Franzoi

Who pays for your medical coverage? The answer to this depends on the terms of your medical plan and your company's sick leave policy. It could be handled one of several ways, such as:

the coverage continues for a period of time as stated in the company policy at the same cost that you pay as an active employee; the coverage stops and you have to elect COBRA coverage which costs 102% of the employer's cost for the first 18 mos. and 150% for the next 11 mos. (the last 11 mos. are available only if you are disabled at the time of or within the first 60 days of COBRA coverage becoming effective); coverage continues at no cost to you for a period of time as stated in the policy but only for the illness you had at the time you became disabled, etc.

What you need to do is look at your summary plan description for your health care coverage and the company policy for sick leave to determine what would happen in your specific case. It is also helpful to know whether your medical coverage is provided through an insured arrangement or through self-insurance. If it is insured, the plan will have to abide by the state insurance laws. If it is self-insured, ERISA exempts them from state insurance laws.

With LTD coverage, once your benefits payments begin or even if you are in the qualifying period, you will remain entiled to the benefit with the LTD carrier with which the coverage was at the time you went out on sick leave. This would apply even if your employer changed insurance carriers. However, during the qualifying period the responsibility for paying the premium will remain in-force. Therefore, you need to ensure that whoever is responsible for the premium pays it. I would advise you to look at the summary plan description for your LTD coverage to determine your rights.

The Social Security offset as well as offsets for workers' comp. benefits, benefits from other Company-sponsored plans, etc. is standard in most LTD policies. The goal of an LTD plan is usually to take the person to 60% of his income prior to disability. To the extent that the LTD premium was paid for by you, the benefit is not subject to taxes. However, if the employer paid the premium, the benefit is taxable to you. Whether the Social Security benefit is taxable or not depends on other income you might receive. There is a threshold test that must be done to determine whether or not any, all or none of an individual's Social Security is taxable.

With respect to the employer getting you off the medical plan, this would have to be handled in the same fashion as all other medical illnesses, i.e., to the same extent that coverage is carried for other disabled individuals. In addition there is a new law, the Health Insurance Portability and Accountability Act of 1996 (HIPPA). HIPPA will prohibit discrimination against employees in enrollment and premium due to health status. HIPPA is not effective until the first plan year after 6/30/97 which is 1/1/98 for calendar year plans. The effective date is different for plans maintained pursuant to a collective bargaining agreement. HIPPA will not allow an employer to drop an individual from coverage due to their health status. HIPPA also guarantees access to individual policies for individuals who have had group coverage for at least 18 mos., did not have their coverage terminated due to fraud or nonpayment of premiums, are not eligible for COBRA or have exhausted their COBRA benefits, and are not eligible for any goup coverage. I recommend that you find out what the plan year is for your health plan in order to determine when HIPPA will apply.

I do not know whether you are in an insured or self-insured plan. If the plan is insured, there might be some state insurance laws in NY which would prohibit the employer from dropping you while you are in the eligible class. I am researching this. - Lynn Franzoi



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