Insurance and Work

Introduction

For disabled people, fear of losing health insurance if they work often prevents them from entering the job market. Medicare, private health insurance and long-term disability insurance are all affected differently by earned income.

Medicare

Medicare comes through SSDI. If you return to work under SSDI’s nine-month Trial Work Period, you could eventually lose your SSDI dollars depending on how much you earn. In general, if you work on SSDI and earn under $980 gross (2009 figures) a month, (during your Extended Period of Eligibility), nothing happens to your benefits or your Medicare. If you earn more than $980, then after you have used up your nine free trial work months, and three months extension of benefits, your SSDI dollar benefit should be suspended. Your Medicare will remain in place for a minimum of eight and a half years after your initial return to work, even if you are earning more than $980 or work full-time.

Medicare includes Part A, hospital insurance, which is free. Part B, doctors’ insurance, costs $96.40 per month (2009). The premiums are deducted from your SSDI checks. If you work and lose your SSDI dollars, you must work out a payment plan with Social Security for the Part B premiums. If you have Medi-Cal along with Medicare, Medi-Cal should pay your premiums as long as you remain Medi-Cal eligible (see separate Medi-Cal Fact Sheet). Premium payment will continue even if you return to work and incur a higher monthly share of cost, or until you lose Medi-Cal because of wages.

If you collected SSDI, worked for eight and a half years, and still needed your Medicare, you could purchase both Part A and Part B to use as your health insurance at the end of the eight and a half year extension. Premiums currently run about $423 per month for Part A (2009). People on SSDI who are working would be wise to look for full-time work where they can qualify for employer-based group health insurance.

Private Health Insurance

If you are disabled and have private health insurance, or extended health coverage from a former employer, you will not lose your coverage if you return to work. If you return to full-time work with an employer offering group health insurance, you cannot be denied coverage due to a pre-existing condition. Where wait periods for pre-existing conditions are involved, your employer must give you credit for the amount of time you were covered under your prior health plan (including Medi-Cal and Medicare) provided there is not a gap of more than 63 days between the end of your prior coverage and the start of your new group plan. So, if your new plan has a wait period for pre-existing conditions, this wait period must be reduced by the number of days you were covered under your prior health plan. In many cases, the length of prior coverage credited will exceed the length of the wait period (12 months maximum for initial enrollment) and the wait period will be eliminated altogether. If your new employer has a Health Maintenance Organization (HMO) plan, and most do, there are no pre-existing clauses. Again, consult with a benefits or insurance counselor before going to work.

Long-Term Disability Insurance

Some disabled people have income from long-term disability insurance policies. Working could affect your monthly income immediately. If you have a private policy, you may be able to continue the policy on your own, just as you did before you left work. If you have long-term disability coverage through a previous employer’s group plan, your coverage could end if you return to work. Each company plan is different. Some allow for returning to work; some do not. Consult with an insurance counselor before returning to work.

Life Insurance

If you have life insurance coverage from a previous employer and your premiums are waived because of your disability, going back to work will end your coverage. You will have 31 days to convert the coverage to an individual policy, but you will have to pay the premiums. Disabled people who sell group life coverage to a viatical settlement company should coordinate returning to work with the company so that the policy, and the company’s investment, is not lost.

Summary

Insurance is complicated for disabled people who return to work. But the situation is not as frightening as most people think. Each situation is different, depending on your benefits and your coverage. Always consult with a benefits or insurance counselor before going to work, so that you know what you are entitled to and how work will affect your coverage.