Get to Know Your Disability Benefits Plan
If you are like most people, you probably work for a company. And your employer may provide a benefits package that includes long-term disability insurance. That employer-sponsored plan is governed by the Employee Retirement Income Security Act of 1974 (ERISA), a federal statute.
In general, most of these plans pay you a monthly disability benefit of between 50% and 66% of your income, MINUS other disability benefits you may be entitled to such as Social Security Disability, Workers’ Compensation, and No-Fault, etc. At first glance, while an employer-sponsored long-term disability plan seems to cover you in the event of a disabling injury or illness, often they have specific restrictions and/or limitations. You should be aware of them.
For example, the monthly benefit you will receive through an ERISA plan is based solely on your base salary/income. Therefore, if you are a salesperson and you rely on commissions to make a living, you need to understand that your disability benefits ARE NOT based upon your total pay that includes these commissions. Rather, your disability benefit is a percentage of only your base pay. The same applies for other occupations such as hairstylists and restaurant employees who may rely on tips. Tips are NOT considered your base pay.
Bottom line: Get to know your employer-sponsored long-term disability plan (ERISA) so you know what to expect in the event of a disability. For added protection, contact DeHaanBusse LLP for a free consultation.
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